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How can you ensure your balanced scorecard project succeeds?  This article is based on 25 year’s experience, many successes and a clear understanding of why they fail. This applies to all performance management projects, not simply those using a balanced scorecard.

You can read about the myths of balanced scorecard project failure here.  They are quite wrong.   Here are five real reasons why performance management projects fail.

  • Reality reason 1: Not thinking about the underlying management need or problem that needs to be solved.
  • Reality reason 2: Treating the approach simplistically.
  • Reality reason 3: Not looking for actionable decisions.  Not seeing performance management as a part of a wider decision making process
  • Reality reason 4: Not dealing with the culture of performance.  Assuming a culture of performance or focusing solely on the discipline of performance.
  • Reality reason 5: A failure to treat the performance management project as a change project.  Making no attempt to change thinking, behaviours or culture.

Why balanced scorecard projects really, and how to make sure your balanced scorecard project succeeds

Below we expand on these and what you can do about them to ensure your balanced scorecard project succeeds.  All of them centre around a common, and fundamental mistake.  They treat the approach as a technical problem and fail to manage change. The reality is that good decision making, good strategy, good performance management and good balanced scorecards are not simply technical problems.  They are as much a social as technical tool. The balanced scorecard is a social tool, not simply a technical tool.  As a result, They fail to treat the approach as a part of wider decision making process.

Let us look at the five reasons in detail, so you can address them and ensure your balanced scorecard project succeeds.

Reality reason 1: Not thinking about the underlying management need

The first thing we do on any engagement is ask about the underlying problem that needs solving.  We are trying to diagnose the deeper management problem.  the one that stops their performance management approach working today.  We help our clients understand what is really going on and work with them to understand what problem they are trying to solve.

After all there are a lot of intelligent, experienced and knowledgeable managers out there who are more than capable of implementing a performance management or balanced scorecard project.  However, they are not.  The interesting question is what is really stopping them?

Often it is about quite different needs.  A simple way of looking at this is the types or generations of balanced scorecards.  Each type or generation solves a different class of management problem.   Understand how different types of balanced scorecards solve different management problems and you are going to head down the correct path.

If you want to ensure your balanced scorecards projects succeed, you need to know what the success criteria are. (Clue: It is not simply “Having a balanced scorecard”)  Without knowing what success means, how can you judge success?

Reality reason 2: Treating the approach simplistically

Many balanced scorecard projects fail because they approach the balanced scorecard, or performance management, simplistically.

The most common mistake is to make no attempt to understand the thinking and philosophy behind the approach.  See, Simplistic balanced scorecards: Please do not do it this way!.  Why bother reading past page 9 of the book, or looking at a few simple websites.  It is simple, right!

Quite often, the short cut involves copying someone else’s scorecard or template.   This does not always work, see Best practice balanced scorecard templates (They are asking the wrong question).  If you have a team, or a bunch of consultants, who have gone off into a dark room to choose your measures and design your “Balance Scorecard” this is probably what they are doing.

The route to simplistic is direct and straight forward.  The route to simple is often longer, but ultimately more useful.

Reality reason 3: They are not looking to support actionable decisions

Performance management is part of a decision-making process:  make good decisions, execute them well and learn quickly from them.  You can manage performance, when you have made good decisions about what that performance should entail.  You can improve performance when you make good decisions that can be put into practice (are actionable).

It is designed to improve the quality of conversation, thinking, analysis and decision making.  Simply applying measures does not do that. People have to use them.

Reality reason 4: A failure to deal with the culture of performance

However, many projects fail to appreciate that they are dealing with organisational culture and the culture of performance.  They focus on the discipline of performance (Do we have the right data).    They ignore the cultural implications (how do we behave around this information). There are three parts to this.

  • Recognising that this is about culture and behaviour
  • Explicitly choosing the culture and behaviours you want (rather than assuming the one from the approach)
  • Designing and implementing your approach so that it creates the culture of performance that you want, and the behaviours you want to encourage.

Choosing and designing your culture of performance are fundamental steps in any performance management project.  The problem is that many who are implementing a balanced scorecard fail to even think about the culture of performance they are creating.  In part I think that this is because it is beyond their control and influence.  If you have been told to create some measures, you do not have a remit to influence the decision making culture (even though you are about to with your choice of measures).  Ironic isn’t it.

If you want to ensure your balanced scorecard project succeeds, by changing the culture, as well as the discipline of performance, have a look at our section on the culture and discipline of performance.

Reality reason 5: A failure to treat the project as a change project.

Many projects fail to appreciate that they are dealing with a change project and that change needs managing. They fail to treat the project as a change project: Why do balanced scorecard projects fail  – tackling change.  If you want to have a successful balanced scorecard project, you have to incorporate managing change into the project.

Have a look at our whole zone on culture change: the culture & behavioural change zone.

In conclusion, here are the five ways ensure your balanced scorecard project succeeds.

So, we come down to five key recommendations to ensure your balanced scorecard project succeeds.

  1. Understand what management problem or need you are actually trying to solve.
  2. Make sure you understand the underlying thinking and implications of the approach you are using. Common practice is not necessarily good practice.
  3. Focus on supporting and improving the quality of conversation, thinking and decision making.
  4. Explicitly choose the culture of performance you want. Design the system of performance management to support that culture.
  5. Treat the project as a serious change project. The project is about cultural and behavioural change, so treat it as such.

If you want to learn how to make such projects really stick and create change, then talk to us.