Using the Balanced Scorecard to Map Your Strategy
An Approach to a Strategy-Focused Organization
Overview of the Balanced Scorecard (the BSC)
- The BSC: Moving beyond managing only the bottom-line
- Why the economic environment demands a better approach
- A look at the Kaplan/Norton strategy-focused approach
- Who uses the scorecard and what are best practices
- Basic requirements of an effective scorecard process
- Benefits and pitfalls in adopting a scorecard
- It doesn’t work without executive buy-in
- Adapting the BSC for the IT unit
Key components of a balanced scorecard
- Securing top-level consensus and commitment
- Criteria for selecting the BSC Champion
- It starts with a mission/vision and strategic platform
- The Big Four: Financial, Internal Processes, Customers, People/Capacity
- Determining enterprise objectives, key metrics, target baselines, and data sources
- Design elements of the Scorecard and dashboard
- Six structural attributes of an IT scorecard
- Avoiding the risk of over-complicating the BSC
The BSC strategy development process
- Strategy as a continual process of everyone’s job
- Creating a Strategy Map – finding cause-effect links for the Big Four (a hands-on exercise)
- Linking the scorecard to strategic goals and measures
- Developing a framework to transform strategy into an operational management tool
- Put the organizational rewards where the strategy is
- Key steps in developing an enterprise implementation plan
- Developing support unit scorecards for Finance, IT, and HR
- Defining the activities, resources, and business processes needed to implement the BSC
- Cascading the strategy map and performance model to the team and individual employee level
Identifying and defining key scorecard measures
- Determining how product/service value is perceived by your customer
- Reviewing your company’s current metrics
- Making the shift from lagging to leading performance indicators
- Seven metrics commonly used in IT scorecards
- Aligning meaningful indicators at each level of the organization
- Assigning ownership and accountability for metrics
- Assuring data quality: GIGO
- Streamlining the reporting process for real-time measures
Technology Enablers
- Determining the role of technology in implementing your balanced scorecard
- Design elements of a business intelligence architecture for scorecard accuracy
- Should you buy scorecard software or develop your own?
- Guidelines for selecting scorecard software
- Streamlining front-line performance data to the scorecard
- Debriefing the use of the BSC to make corrections
It’s all about communicating
- How the BSC simplifies communicating critical business information
- Creating a common BSC vocabulary for all to understand and use
- Using the BSC to explain your strategy as day-to-day performance targets
- Maintaining two-way communications to keep the scorecard current and relevant
Using the Balanced Scorecard to manage change
- Analyzing how implementation of the scorecard affects all employees
- Aligning operating units with the organizational strategy
- How to match compensation and rewards with the scorecard’s strategic metrics
- Best practices in helping employees learn to apply the new scorecard in their work
Monitoring and assessing the scorecard
- Creating a BSC report
- Using the dashboard and reports to examine forward-looking metrics
- Communicating the results of the scorecard
- Reviewing performance and making adjustments to potential problems
- Revising the scorecard in real time to reflect emerging strategic changes
- Keeping the BSC a dynamic process: Best Practices
- Leveraging dashboard data into organizational learning: what have you learned?