THE MANILA TIMES
Business Times p.B1
Thursday, November 04, 2004
LEARNING & INNOVATION
By Moje Ramos-Aquino
Eleven steps to successful Balanced Scorecard
DO you have a vision-mission-values statement/s? Do you have a game plan or strategy? Can you describe your strategy? How have you communicated this strategy down the line? Are your mid-term, short-term and action plans and budgets linked to your strategy? If you can't describe your strategy and, therefore, haven't communicated it and allotted funds for it, then you need a BSC.
How do you build and implement a BSC?
First, get started. Resolve scope of BSC-corporate or critical business unit? Get the top honcho, if not your board, to sponsor your BSC and to provide resources, leadership and example. Enlist the support of key managers and leaders. Be very sure there is a crying need for overhauling your performance management system. Are data for performance measure easily accessible and are people prepared to measure and be measured? Are people willing to invest ample time in preparing, implementing, measuring and evaluating their BSC at regular periods?
Paul Niven identified four barriers to implementing strategy. They are vision, people, management and resource barriers. According to Niven: "Only 5 percent of the workforce understands the strategy. Only 25 percent of managers have incentives linked to strategy. Eighty-five percent of executive teams spend less than one hour a month discussing strategy. Sixty percent of organizations don't link budgets to strategy."
Second, define your corporate vision, your collective dream of what you want to be, the direction where you are going and how you want your organization to be perceived by the world.
Third, define why your organization exists, who you are, what you do, how a functional or business unit fits in the overall organization architecture.
Fourth, establish your value system, what are important to you, your guideline for action and interaction on a day-to-day basis.
Fifth, decide on your strategy or game plan on how to create sustained value for your stakeholders.
Planning guru Michael Porter writes that strategy is about selecting the set of activities in which an organization will excel to create a sustainable difference in the marketplace. This step helps you make your vision-mission-values actionable and meaningful. If you haven't decided on a strategy yet, you may focus on key performance indicators or critical stakeholders.
Sixth, translate your strategy into a strategy map to show cause-and-effect relationships.
Seventh, specify objectives, measures and focus.
Eighth, enumerate targets, initiatives or programs and resources required to help you act on your objectives.
Ninth, prepare individual BSC, i.e. particularize objectives or what each person, from CEO down to every contributing member of the organization, need to do.
Tenth, regularly measure and analyze your performance against scorecard measures and targets and evaluate your outcomes and determine if desired results were produced or determine how they helped your organization achieve its mission and strategic goals using your core values along the path of your vision. Determine how and by how much you are moving toward creating shareholder value, delighting customers, using efficient and effective processes and attracting, developing and retaining productive talents.
Finally, go back to number one for your next cycle.
(Moje, president of Paradigms & Paradoxes Corp., assists organizations in building and implementing the Balanced Scorecard. Her e-mail address is email@example.com)