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The Balanced Scorecard and Strategic Goals

A recent LinkedIn question was from a strategy manager wanting to use a ‘strategic goal’ but unsure how this fitted into the Norton & Kaplan Balanced Scorecard framework.

One respondent used a good deal of words explaining that the approach does not use the phrase and it was meaningless in the approach.  He should use other language, more suited to the Norton & Kaplan approach.

Of course, that is a silly answer – and quite wrong.

Of course you can use strategic goals in a strategic balanced scorecard.

My clients often have 3 to 4 big strategic goals on their strategy maps. (There is nothing wrong with the phrase).

These strategic goals cross the perspectives of the strategy map. They are in effect ‘strategic themes’ (In balanced scorecard language) with an ambition for change.  So, you will have inside that theme (Goal) a set of linked objectives (financial, customer, process and learning and growth) with associated measures (KPIs).

In the original questioner’s example, (which was about the strategic goal of lowering churn rates in a telecomms company) the story is very easy:  Lowering customer churn requires a change to how you operate (process) and possibly your capabilities & skills and knowledge (L&G).  This will change how customers see you (Customer perspective)  and therefore improve your finances (in this case customer retention and acquisition costs). It’s a simple strategic themes that crosses the perspectives. For each perspective you develop the objectives and later work out the best way to measure it.  Then make sure you have projects to implement any changes and someone owns the problem.  Simple and easy.

This is a perfectly valid aspect of your strategy (easily represented on your strategy map and scorecard).  It is a straight forward strategic goal I have seen in many insurance, telecomms, and other service industries. Just work out what the “strategic goal” means in each perspective of the strategic balanced scorecard.

Obviously you don’t want 12 strategic goals like this or your strategy map will be 12 different strategic themes.  However having a clear view of the few main strategic themes (or strategic goals) in important in any strategy exercise and important when the strategy is captured in your strategy map in a meaningful way.

Getting hung up on the balanced scorecard approach

The original answer a good example of someone getting hung up on the words and method (not methodology), without relating them to how the client thinks and what they want to achieve.  Of course organisations use phrases like Strategic goals, ‘Critical success factors, Ambition or strategic objectives.  A good consultant will help you make the alignment with what the client has in their head and the approach as captured in the strategy and strategy maps.  Frankly you can call them all bananas, as long as people understand the same thing by them.

The original responder suggested the questioner attend a week-long course.  Useful, but not necessary.  Have a read of my book “Strategy Mapping for Learning Organizations‘ Norton wrote the foreword. It might be cheaper than a course. It provides a clear method and explains the underlying thinking and principles. It explains all this in various chapters.

Or give me a call.

 

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