By Brian Ward
The story so far…
Ever since the early nineties when Kaplan and Norton introduced the concept of the Balanced Scorecard, organizations have been quick to adapt the approach. Originally designed with the private sector in mind, where as a result of the work of such powerful leaders as Deming, Crosby, Juran and Senge, cause and effect or systems thinking took hold and paved the way for such thinking at the strategic level, the scorecard promises once and for all to lay the ghost of ‘management by results’, (in favor of ‘management for results’), and abolish ‘command and control’ styles of management.
In many governmental organizations, early pioneers struggled with the adaptation of the concept to their constituencies. As governments are no strangers to performance measurement, and understand the difficulties inherent in measuring the impact of government policy on various stakeholders, it is understandable that any new or innovative approach to measurement will garner cautious attention.
The trick however, learned by many who have attempted to introduce the balanced scorecard approach in government, is to exploit its two main benefits:
ACCOUNTABILITY: It assists your organization to PROVE that it is doing what it said it would do, and achieving what it said it would achieve.
IMPROVEMENT: It assists your organization to IMPROVE, by gaining an ever deeper understanding of the linkages between the outcomes it is achieving, the outcomes it desires and the drivers of those outcomes. Change a driver on your scorecard, and you change the outcomes.
So you balance the demand to PROVE (aka accountability) with the drive to IMPROVE, and in doing so you end up with an accountability framework which supports and enhances continuous improvement. Not bad if you can pull it off.
Basic tips to help you successfully develop and deploy your scorecard
As you examine the experiences of these organizations, keep in mind the senior leadership team need to buy-in fully to the concept of a balanced scorecard. To do that, they need to approach the exercise with their eyes wide open. It’s no walk in the park. If you are such a team, here are some basic tips to help you over the hurdles:
- Don’t expect perfection from day one. Hypothesis testing requires that you face reality. If your initial strategic thinking is flawed, face it squarely and revise it so that your strategy, and your credibility, are enhanced.
- Build your management information systems around the cause-and-effect paradigm of the scorecard. Throw out your tired old performance management systems that attempt to focus attention on the individual performer. We live in an interconnected world, where none of us are so detached that our personal contribution to organizational success can be reliably isolated and measured. Performance appraisal and reward systems that focus on individual performance are notoriously ineffective at improving overall organizational performance.
- Learn from others. See the list of sites below for more information. Understand that strategy is not a spectator sport. Engage your entire organization in developing tactics to support the strategy and feed into the scorecard system.
- Use the correct balanced scorecard framework for your type of business. Not-for-profit models are different than for-profit in the cause-and-effect relationships they seek to explore…don’t get them confused. Check out a text titled Balanced Scorecard Step-by-Step for Government and Nonprofit Agencies, by balanced scorecard expert Paul R. Niven. I highly recommend it.
Why Implement a Balanced Scorecard?
- Increase focus on strategy and results
- Improve organizational performance by measuring what matters
- Align organization strategy with the work people do on a day-to-day basis
- Focus on the drivers of future performance
- Improve communication of the organization’s Vision and Strategy
- Prioritize Projects / Initiatives