An important aspect of balanced scorecard thinking is to understand what drives performance. The objectives in the learning and growth perspective are vital for this.
The problem is many organisations change the name of the learning and growth perspective and rename it the “People perspective”. However this causes problems.
Let us take just a simple example.
One client had changed the name of their lower perspective on their balanced scorecard from “Learning ad growth” to”people”. As a result they were not looking at the drivers of change or the capabilities of their IT services. This affected their whole scorecard. Foe example, they had an objective about improving the quality of their software releases. The problem was this focused on software release quality rather than the underlying causes of the problem.
Instead of merely looking at the result of the activity, we looked at the underlying behaviours that drove the quality of the releases. What was the deeper problem here? What did the IT team have to learn? How did they have to behave differently, to solve this problem?
After a short discussion it became apparent that the issue was that their IT teams dare not say no to their customers. They over-promised delivery of software that caused releases to be rushed, not be tested adequately and therefore often fail. This put them in a catch 22 of having a poor reputation for delivery and also not having the credibility to be able to say no to their customers.
Having an objective on their strategy map, in the learning and growth perspective, that addressed this more fundamental relationship enabled the IT department to have a better dialogue with their users and also solve the fundamental problems.
So, if you change the name of the fourth perspective from “Learning and growth” to People, beware of the consequences. It will create a much more static scorecard that does not look so clearly at the underlying drivers of behaviour. Please avoid this mistake.
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