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As you browse the web or read articles you will come across various Balanced Scorecards as steering wheels, jigsaw puzzles or other symbolic pictures.  The Tesco Steering wheel is well known. In this article I want to explore why these balanced scorecards and steering wheel representations are used, why they work, their limitations and what lies behind them.

Symbolic balanced scorecards as Steering wheels

If you want to call these sort of pictures ‘Balanced Scorecards’ then we should class them as ‘Symbolic Balanced Scorecards’.  They are in the same class of useful tools as symbolic strategy maps. They are great for focusing attention and setting principles for overall performance.  They are a tool for getting the message across: a high level communication tool.  What they are not is a complete working balanced scorecard.  Let me explain why, but first put them in context.

The Tesco Steering wheel was originally created around 1998, though many others exist. (If you are looking for visual examples, just search Google for ‘Scorecard steering wheel images’ (google search – new tab)‘).

I do recognise the value and support the use of such symbolic balanced scorecards, but I should make it clear that, personally, I am not a great fan of these type of pictures. They are great at getting across an overall message.  They win on communication.  They fail the important test of any good balanced scorecard, the “What decision should you now take?” test.

Symbolic scorecards: A small part of a much bigger picture

To me they are simply a part, small part, of a much bigger picture: just the tip of a much richer iceberg.   They are the visible, external face.  A face that looks simple and attractive, but that must be attached to a body. A much more detailed structure must sit behind these symbolic pictures to support this overall symbolic balanced scorecard, to make stuff happen inform decisions and help to implement the strategy.

If a such a symbolic scorecard is all a manager wants, then they are missing the point.  If a client wants to do things properly, and while doing so, introduce the overall story with a symbolic picture, then that makes much more sense.  They are a means to an end, not an end in themselves.  The steering wheel has to be connected to the wheels (and an engine is useful as well).

The Tesco steering wheel is well documented as a picture and occasionally as a part of a wider system.  I don’t want to repeat that here: there are plenty of people who have written about it (and Tesco are reported to have dropped it – 2015).  There is a more recent example from Barclays Bank.  In a circle there are just 5 topic areas (they call them five commitments) and a core message “Helping people achieve their ambitions – in the right way”.  These are supported by eight commitments and eight metrics. A very simple picture.  (Barclays Balanced Scorecard 2016 – link to their site).  Alternatives representations include using a simple jigsaw rather than a steering wheel, though this is less flexible.   All demonstrate that the symbolic part is not the useful whole.

The important structure and message

What the “steering wheel” balanced scorecard does do is provide three pieces:

  1. A set of topic areas or focus areas: These show that the organisation is not just focused on money, but has a more balanced perspective.
  2. Key messages, or objectives, within each topic or focus area.  They can be commitments, they might be ambition statements.  They are often a set of two or three lower level objectives for that focus area.  In each case they position and expand on the simple name of the focus area.
  3. An overall vision or mission statement.  These sit in the middle of the steering wheel like a hub.

Separately, you often find a set of measures associated with the objectives in each perspective: the scorecard behind the steering wheel.

The need for a symbolic picture: internally and externally

This need for such a symbolic picture, a totem, is to provide a rallying call.  It helps with the communication and focus on an overall story, ideally one that has balance.   It is very useful, but not alone.

One main reasons for having a such a steering wheel, is that they provide a simple external view.  Often to a Board, or externally in corporate presentations and outward facing material.  Of course they are used internally, but they are also a message to shareholders and partners about where the organisation is positioning itself, what it considers important and how it wants to play.

This reveals something about the messages that go with these steering wheels when seen from the outside.   The classic cause and effect model of a balanced scorecard is deliberately lost (otherwise you would be telling your competitors where your weaknesses are and where your strategic emphasis will be).  For the same reason, they also hide the business model and strategy map part of a strategic balanced scorecard.  Instead they focus on overall strategic messages and focus areas.  The positioning you want to get out there.

Internally, the picture is different – What lies beneath?

So what does lie beneath?  There is a big clue in the way Tesco and others refer to their steering wheel.  They often say things like “It lies at the heart of….”  what they do.  As an example, Tesco’s 2002 CSR report has, on page 27, a diagram that shows how their steering wheel is simply one part of a whole set of pieces, in this case for CSR.  These pieces include various plans, (Finance, Customer, operations & People) and in this case leads to two sets of KPIs, one for Environmental KPIs and one for community KPIs.  And this is just the CSR leg.

I know two people who worked on that original steering wheel at various times.  I can assure you that there is a lot of detail behind the superficial exterior.   Detail that spread down to the retail outlets.

These things only work if there are that connections.  If you have the detail that eventually aggregates up to the simply high level picture.  If there is a clear cause and effect mechanism sitting behind the overall picture.  If there are projects and initiatives designed to bring about change.  In reality, the steering wheel is just that – the thing you hold, that is in your face.  Actually you are operating a much larger system of measurement.  Otherwise how else could you run a £65,000 million turnover business, operating in nearly 7,000 locations with over 470,000 staff?   Seriously?  You need the detail, otherwise you simply don’t have a grip.

Changing of the guard – a new steering wheel (or metaphor)

In researching this article I came across several references to The new CEO of Tesco, Dave lewis, replacing Sir terry O’Leahy’s Steering Wheel with his own ‘Big six’.    I would be surprised if the  whole reporting, planning and management infrastructure has also been changed.  I suspect, with a new CEO, the ship has been repainted, but the working inside are still fundamentally the same.  Reporting is still what it used to be, but the high level messages provide a different focus, emphasis and imperative for change.

Overall conclusions and advice

Yes symbolic balanced scorecards, steering wheels and other high level positioning and focusing tools are valuable and useful.

They are not the whole picture and never can be.   They provide an external frame of reference and message to investors and stakeholders.  They provide an internal rallying point for people within the organisation.  However, to work they have to be linked the more detailed performance management system, the measurement systems and the decision-making systems that sit through the whole business like a nervous system.   They have to be part and be supported by the strategy development and planning processes.  They are just the visible and symbolic tip of a much richer system.  It is the whole piece that works, not just the symbolic steering wheel.

Please, please, please, don’t try to head straight for that symbolic picture.  After all, you may have to live with it for a long while, and if you get it wrong, the focus and emphasis will be in the wrong direction.

Yes, go ahead and develop one, if you want one.  But, please, be very careful to ensure that it is the culmination of a whole set of work that sits in a sound structure beneath it.  And you must have the supporting infrastructure and appropriate management systems to connect the steering wheel to the road.  After all, that is where the strategy actually happens.

Some useful links:

If you are genuinely interested in a performance management system that works (and we can do a steering wheel as well, if you insist) then get in touch.

References: The Grocer: Dave’s Big Six is a far harder sell than Sir Terry Leahy’s Steering Wheel strategy