You can try, but you'll miss great opportunities
to deliver results, it is unlikely to create change and it probably
won't last more than a year or so. Amazingly, we still see people
recommending this approach and others trying and using it. It
has moved on extensively since then.
But this is a very old view dating back to the early
use. The whole Balanced Scorecard approach has moved on considerably
since then. By 1994/5, in Renaissance, the company set up by Norton
& Kaplan, it was clear that this approach did not work well.
Measures were merely surrogates for what was really intended,
the objective. Also, there was often no relationship between the
measures in the perspectives, even though it was implied. That
is why strategy mapping evolved, using objectives rather than
measures, to communicate what needs to be achieved, with the objectives
being measured. In publishing their third book on the subject
it is clear they are still trying to get that message across to
many.
Of course if you want to find out some of what was
not in the books, talk
to us or see below.
Too many (of the wrong type of) measures:
Research by the Hackett Group shows BSC implementations are failing
because they use too many measures, which just
causes confusion and lack of focus. We find typical managers have
over 100 measures (far too many). Also, those measures that they
use are dominated by financial and lagging measures.
These do not help you anticipate problems and drive performance,
they merely tell you that you arrived, after you arrived there.
Refer to paper
Focus on measures: Good scorecard
implications work out what is important to measure and communicate,
before they look at the measures. "Don't manage what
you can measure: Measure what you want to manage". Poor
implementations pile measure upon measure in the vain hope it
will inform more and somehow communicate the strategy better.
It won't. Refer to paper
Destroying the cause and effect relationship
between perspectives: The key relationship in commercial
organisations is between the perspectives. A different one applies
in not-for profit and public sector organisations. All start with
the premise: Our capabilities, drive what we do, which affects
our customers, financial and other outcomes for our stakeholders.
And don't confuse strategic themes with perspectives. This is
the most common reason for people changing the perspectives and
losing the causal relationships. Refer
to paper
Losing the focus: Being clear it
is about what really matters, not everything you do. It is about
focusing on the future, not the here and now. What will make the
biggest difference to the organisation? Poor implementations measure
everything, except what is really important. Refer
to paper
It is a one-off exercise: "We
created these measures and they are still useful 1-2-3 years later".
Perhaps, but in that time has the strategy changed? Has the focus
of the organisation changed? Are they still relevant to what will
drive and change performance today? Perhaps, perhaps not. Refer
to paper
It is about the software: "If
we implement performance measurement software it will solve the
problem." Sorry, it won't, unless the problem is focused
on the collection and display of the information. If you want
to embed the existing performance management culture, with all
its problems, go ahead. If you want to change the way people manage,
the software is only 20% of the issue. You can get the software
wrong, but not as much as you can get the performance management
culture wrong. Refer to paper
You could explore our
range of Balanced Scorecard services, but its far better to
talk to us, isn't it. If you do want more
information before you talk to us, then take a look at:
The dilemma of performance
management
On Balanced Scorecards, have a look at:
Use a Strategy
Map and Balanced Scorecard
10 principles for a
successful Balanced Scorecard
What was not
put in the books.
Choosing and implementing
software.
Having worked with the originators of the Balanced
Scorecard, Norton & Kaplan, we have a unique, and extensive,
experience. How to use the approach
to execute strategy successfully and therefore improve the performance
of your organisation, measurably. Clients are still using our
approach over 5 years after we worked with them. This clearly
demonstrates the effectiveness and persistency of our consultancy
methods.
