6 ways successful leaders reinvent their Balanced Scorecard

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YOUR BSC
Jeroen De Flander is a globally recognized strategy execution expert and a highly regarded keynote speaker. He lectures at several business schools including London Business School and is co-founder of the performance factory. His first book Strategy Execution Heroes reached the Amazon bestseller list in 5 countries and was nominated for Management Book of the Year 2012 in the Netherlands. His second book, The Execution Shortcut, reach the #3 spot in its category on Amazon.

His strategy articles 7 things every leader should know about strategy and 8 strategy questions every CEO should ask, created a solid strategy debate on LinkedIn, with close to 500 Likes and 75 Comments.

Now it’s time for the next step – cascading your strategy.

The most popular strategy cascade framework is the Balanced Scorecard. According to research by Bain in 2010, the Balanced Scorecard is the sixth most used management instrument in today’s organisations, with around 50 percent of all 11,000 survey participants making use of it.

Want to be in the top 1% of Balanced Scorecard users?

Keep improving what you have!

Here are 6 ways to reinvent your current Balanced Scorecard:

1. Re-think your starting point

A well-designed Balanced Scorecard reflects your company’s strategy − so make sure your strategy is clear at the start. If it isn’t, take the necessary time to clarify. The quality of the strategy cascade can only be as good as the quality of the strategy it starts from. Challenge your strategy for inconsistencies and loopholes. Use these 8 questions every CEO should ask to spark your thinking process.

2. Re-think your strategy map approach

‘We have a strategy map’ is not the same as ‘We have a strategy’ Just because you have a strategy map, doesn’t mean that you have a strategy.

It’s a lot of ‘map’ and very little ‘strategy’.

I believe each strategy map should include a written two or three-page Word document with all the hypotheses clearly explained. A document that captures the choices that you have made.

So if you don’t have those three pages that match your strategy map, why not try writing them?

3. Think made-to-measure

The Balanced Scorecard should be adapted to the size of the user group.

You don’t need a cannon to kill a fly.

Smaller units don’t have – or need – the resources to handle a complex Scorecard. If you use Scorecards for large and small units, you need two different approaches – a basic and a more detailed way of working. If you don’t, you will overshoot for the smaller units and create frustration. So adopt according to size – a bare version for the smaller units, a standard version for mid-sized teams and a full-size version for big units.

4. Re-think the finish line

The Balanced Scorecard is not the end station… so don’t stop!

Strategy Execution is a continuous process. The Scorecard is one technique for cascading strategy to the next level. But cascading strategy to the next level down is just the first step in the cascading process. If you stop there, your strategy will never end up in all the hands, hearts and heads of your employees. Make sure you continue to translate the Scorecard output to a solid project and program portfolio, small choices and individual objectives for all employees.

5. Re-think your budget process

What is the most important process in an organization?

Based on the amount of attention it receives, I would say the budgeting process. In many organisations, budget is king.

Many see the budgeting process as the trigger (because they are forced to do so) of a limited reflection process to identify (read justify) how much more money they will need the following year. They get into a battle with those at the top and after some struggle and cutbacks, return to business as usual. Many companies would make a big leap forwards if the strategy cascade process received the same attention as the budgeting process. Ideally, the cascading process should lead and the budget process follow.

A solid strategy cascading process with the BSC is a great counterbalance for an out of control budget approach – a situation prevalent in many organizations. Do you need to shift the ‘budget – strategy’ balance in your organization?

6. Re-think your KPI approach

Be careful with the slogan ‘What gets measured gets done.’ Many companies lose valuable time playing around with performance measures in their organization, debating the bells and whistles of their flashing traffic lights, measuring things because someone repeated the famous quote ‘What gets measured gets done’. I’m not against measuring, but it needs to become part of the overall execution framework and aimed at the strategy. It cannot be a stand-alone process.

Think about this, ‘What’s the value of measuring speed if you are driving in the wrong direction?’

Strategy Execution Ambassador I Best Selling Author I Key-note Speaker on Strategy & Strategy Execution

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