Putting Your Balanced Scorecard into Action
Chapter 4: Putting Your Balanced Scorecard into Action
⻬Be quick to recognize and adopt business practices that use Balanced Scorecards, and encourage others to do the same.Look for ways to standardize as well, and make the practice an integral part of manage- ment policy and practices within the company.
For more on communicating these thoughts and ideals to your coworkers, see the following section.
You must manage expectations on the part of your employees. A Balanced Scorecard program allows for better decision making, more real-time data management, and greater flexibility and decisiveness. However, your employ- ees shouldn’t expect and demand immediate and significant change. Remind- ing everyone that although the Balanced Scorecard is a critical tool in suc- cessful business management, it doesn’t guarantee success in and of itself.
Your company must implement the scorecard in an environment that’s open to self-evaluation and to potential changes necessary for better performance, which may require fundamental changes to the structure and systems cur- rently in place.
Making scorecard the talk of the town
You know the guy who talks and talks about a particular sport, obsessed with this player or that key maneuver, to the point where you want to tell him in no uncertain terms that you’ve had enough? Are you that person? If so, good news: When it comes to sustaining the Balanced Scorecards, your people can never get enough. Of course, you must become the obsessed manager who can talk of nothing else in every form of communication — be it at meetings, during discussions, through memos, on references, and even when conversa- tion is light and unrelated to work.
To sustain the scorecard through communication, you need to take a look at the different ways you communicate — be it through conversation, all-hands gatherings, e-mails, phone discussions, and meetings, and integrate them to create a sustained, regularly re-invigorated, continuous conversation about the scorecard and how we are doing. The following list covers the ways you can make scorecard the talk of the town:
⻬Work some reference to Balanced Scorecard into pretty much every business conversation you have, regardless of whether the topic seems related to the discussion or not. For example, during a conversation about a potential new client, ask how we will measure success. Another example would be if you are reviewing today’s performance with the foreman, ask how he or she is measuring process performance and where improvements are being made, and how does he or she know?
There are hundreds of opportunities to link activities with scorecard elements in a relevant and meaningful way.
⻬Adopt some special phrase to stick at the end of your sign off on all e-mails and correspondences. For instance, many people include quotes, or a famous saying, or a fond wish for a safe future. .
⻬Insert a set of coach questions into key discussions surrounding perfor- mance and relating to measures, scoring, visibility, and flexibility in responding to changing conditions. For instance, when discussing per- formance of a business unit, ask about customer and process metrics, how they know they are doing well, and how that ties to financial mea- sures as well.
Offer ideas on how to measure, track performance, and link processes to knowledge or financial performance (see Part III for more). Ask your employees how they make key decisions and why, and prompt them to think about using scorecards and dashboards to help manage their areas better.
⻬Challenge processes that have stayed the same for a while. Old habits die hard, as they say, but with the world changing as fast as it is, we need to ask why we are doing things today the same way we did them five years ago. This has be done everywhere, especially in the finance, HR and legal departments.
⻬Set up management discussions with your peers to discuss integrating operations and functions. Use these times to talk about balance in your business and ways to better integrate skills development with opera- tional and financial performance. Again, suggest in these discussions how scorecards and dashboards can help.
⻬If your business has a Web site, consider adding content that introduces how you’re balancing your business or department. Include discussions that focus on each leg of the Balanced Scorecard and how scorecard helps performance, and insert some helpful hints on how to implement each leg. Direct your employees to this site to spread the word.
⻬Consider your company’s guiding principles, and look for ways to inte- grate a balanced-scorecard approach to support them in conducting business.
⻬Highlight examples of companies that have planned and executed their scorecards with success, and mention new and innovative dashboards as well.
If possible, you should c solicit ideas and guidance from a company commu- nications or PR specialist for these and other ideas. Also, make sure your scorecard plans integrate well with your organization’s communications plans and activities to reinforce synergy and coalition. The upcoming section
“Mastering the Art of Communicating Your Balanced Scorecards” discusses the topic of communication even more.
65
Chapter 4: Putting Your Balanced Scorecard into Action
Cooking up the best time to launch
Most chili experts say that it takes many hours — even days — to create the perfect pot of chili; they scoff at the idea that a good chili can be prepared in only an hour or two. They believe the chili has to cook slowly so you can let the ingredients blend together at very low temperatures to allow for the best flavor, simmering, and mixing.
Balanced scorecards are launched and sustained well because, just like chili, the ingredients of the mix or blend are founded on your company’s blend of factors such as market and customer changes, product mix, internal politics, and the internal workings of your organization,, all come together in just the right way. The foundation is in place as well, to ensure the measures are con- sistent with the measures used in key decisions.
For you, creating the right environment to launch and sustain means patience as well as perseverance. The pace may seem incredibly slow, but you have to hang in there. Here’s how you can get through and help others get through the waiting — patiently:
⻬Talk to and highlight progress with leaders and managers. The key is to talk about how Balanced Scorecards will provide key advantages to your organization, and consistently use every opportunity to encourage and highlight progress in your company.
⻬Be there for your employees.For your employees, scorecard launch means change. You need to be with them and help them when they have doubts, encourage them when they try, and coach them when they fail.
⻬Support learning from mistakes, rethinking, and adjustment. In other words, taste the chili as you go. For sure, the first set of scorecards will probably be wrong, and the dashboards may be completely unrelated.
However, you will learn, and your people will learn, and they may even surprise you after a while with possibilities in dashboards and scorecard elements you did not think of or consider.
Mastering the Art of Communicating Your Balanced Scorecards
Communicating with your organization about Balanced Scorecards is an art.
Yes, we said art,and we mean it. Communication is a huge factor in planning and executing Balanced Scorecards; whether you do it well can and does determine to a large degree the success you achieve. In business, companies
have to focus energy on delivering customer value and achieving market share while providing good (and even great) return on investment. We like to think of communication as the lubricant that makes your company successful in these areas.
When planning your Balanced Scorecard strategies and actions, you need to consider and design your communications strategies as well. You want com- munication to support your plans and to enable employees at all levels to understand the whys, hows, whens, whos, and whats of your scorecard and dashboard implementation. With this understanding, your managers can design and implement scorecards throughout the company.
In this section, we look at communication at the different levels within your organization and how powerful it is in shaping and defining your balanced- scorecard approach.
The view from the top: Senior executives
If you’re a senior executive, you’ve led a significant change within an organi- zation before. The difference is, with Balanced Scorecards, you must decide what’s necessary to communicate in order to convince and motivate your managers and employees about the benefits. How can you help them manage their areas and support the decisions needed as things change, which they often do?
With Balanced Scorecards and integrated dashboards, your managers can detect and correct deviations from your strategic and operating plans. What you communicate sets the stage for how well this happens and for what direction their decisions will take your company going forward.
The following list presents some key communication considerations for senior executives implementing the scorecard approach
⻬Above all, share your vision and long-term strategy for the company.
Present your vision in a way that includes implementing Balanced Scorecards and dashboards throughout the company. Talk about how employees can use scorecards and dashboards to see how well they’re working toward achieving the goals of the organization. Also, talk about how they can use dashboards to make and support better decisions.
Employees look to you for vision, direction, and consistent leadership, all of which benefit from the successful deployment of Balanced Score- cards throughout your organization. What you say, do, write, and sup- port says volumes about what you believe to be important. Sharing your strategies and expectations about Balanced Scorecards sets everyone
67
Chapter 4: Putting Your Balanced Scorecard into Action
on a common path and ensures that your workforce works hard to sup- port your vision for the long term. (For more on communicating to the company, see the section “Making scorecard the talk of the town”.)
⻬Discuss the importance of knowledge sharing.Knowledge sharing is a key strategy for today’s companies — especially those that want to stay ahead of the competition in terms of new products, services, and capabilities. Communicate that Balanced Scorecards will enable greater sharing of knowledge, skills, and capabilities within your company through integrated measurements and scoring. Also be sure to remind how they can use dashboards to quickly detect and correct potential inconsistencies.
⻬Stress the need for long-term thinking.Help your people understand that Balanced Scorecards don’t resolve short-term performance; they’re an investment in providing for a better working environment. Over time, information will be shared, not controlled, and informed management and workforce teams will make better decisions about process improvements.
⻬Reinforce that Balanced Scorecards are here to stay.You aren’t just running a new activity or program to “save the day.”
Surviving scorecards as a middle manager
Middle managers have the most difficult job as far as communicating score- card knowledge and strategies is concerned. Why? Because of the following responsibilities:
⻬They must communicate in the interest of doing the right things right and motivate their sections, departments, or function to deliver prod- ucts and/or services as required
⻬They must be cautious about what gets communicated in their areas and consider the repercussions to them, their teams, and their manage- ment. Managers need to know what to communicate and what to with- hold as well as how to protect the company’s interests.
⻬They must manage expectations because they’re the front-line leaders who work with the teams responsible for delivery of goods and services.
⻬They have to work within ever-changing environments, deal with
increasing demands from both senior management and their workforces, and constantly face newer tasks with fewer resources.
Alas, the middle manager has the most importantrole in ensuring the suc- cessful implementation of Balanced Scorecards. While the senior managers are busy forming strategy and direction and the workforce members are
executing the critical actions that deliver value to customers, the middle managers have to juggle implementing the strategic actions occurring across the company with managing the hundreds of daily activities that provide products and services to your customers.
When it comes to Balanced Scorecards, middle managers form the backbone of any organization:
⻬Leading their groups through performance challenges on a daily basis
⻬Working to achieve their goals and objectives
⻬Integrating their actions with other departments to form a well-oiled and operating company
⻬Sharing with other managers how well the company is doing
⻬Integrating all four legs of the scorecard so that executives and man- agers can make decisions quickly and effectively
Supervisor involvement will ensure greater communication, skill develop- ment, and practice, and help integrate the different levels of management with the reality of the operating teams environment.
Spreading the word from the front line
The front line — the people manning your workforce — is where the action is.
Employees make, assemble, pack, and ship parts and products/service. They buy, transfer, and consume components. They execute services every day and plan, schedule, conduct, complete, and record countless transactions.
Because supervisors and line leaders can most directly relate production with performance, they must understand the advantages and gains to be had from communicating a balanced-scorecard approach on the front lines.
Some of the key advantages you can gain from the front lines include the following:
⻬Process workers are closest to your business reality (satisfying the cus- tomer), so they can help a lot in the communication department by veri- fying your measures and your performance.
⻬After members of the workforce come to understand the idea behind balancing a business with scorecards, managers can include them in the assessment and improvement of processes toward better performance against the scorecard.
69
Chapter 4: Putting Your Balanced Scorecard into Action
⻬Involving the workforce in scorecard communication can improve the design of dashboards and reinforce the importance of self-development within teams and overall departments.
⻬Supervisor involvement will ensure greater communication skill devel- opment and practice, and help integrate the different levels of manage- ment with the reality of the operating teams environment.
Involvement = commitment, so by bringing your supervisors and their work- forces into the Balanced Scorecard world, your company fosters an environ- ment of commitment toward using scorecards and dashboards for possible performance improvement. Your company also demonstrates that its busi- ness decisions will take all four perspectives (or legs of the scorecard) into account and go beyond the previous short-term, near-sighted financial goals
Avoiding communication pitfalls
All businesspeople have made communication mistakes in the past. When some people think they’re communicating, they may be just confusing, and if they don’t check back occasionally, you can bet they’ll leave the people hear- ing their messages room for interpretation. Interpretations of messages may come close or be very far away from the intended meanings.
The following list presents some communication pitfalls you must avoid when putting your Balanced Scorecard into action:
⻬Touting scorecard as the big, be-all, end-all program:Be careful with this.
Be honest about what Balanced Scorecard will do for your company — how it will help you coordinate and integrate your activities better — but also include the implementation and sustaining challenges as well.
⻬Making up a reason to change:You don’t want to send the message that you’re changing the organization just because you want to install a score- card. You first must have and communicate a need to change — regarding market or customer penetration or performance improvement — and explain how the balanced-scorecard approach will help you achieve this change.
⻬Not being aligned with one message: When senior managers talk about synergy, integration, and collaboration, but lower-level managers talk about internal competition where one shift, line, or department beats another in performance, you don’t have alignment with a common mes- sage. Giving mixed messages will destroy any scorecard progress you make, so guard against sending out conflicting or contradicting statements
or actions. Work to focus all leaders and managers in a collaborative way (see the earlier section “Making scorecard the talk of the town”).
When your company commits to Balanced Scorecard and what you plan to do, stick to the message, even though it may not work well in the beginning. Whenever people try something new and it doesn’t work so well, they want to fall back to what’s familiar, no matter the conse- quence. You need to be consistent and persistent in your message, having patience all the while. Be unwavering in your resolve to say and do the same things toward successfully bringing Balanced Scorecards to your business.
⻬Communicating in a vacuum:You don’t want to rely on one-direction communication, where you send messages but have no way to know if people hear, receive, understand, or comprehend what you’re trying to say. This happens when managers conduct large, all-hands meetings to communicate a message and then expect everyone to know what’s going on. Half the people may not have understood, and the other half think they understood, but most heard only what they wanted to hear.
Large group announcements don’t work, and never really have — unless you want to announce the company picnic or pizza party. To make sure all people understand your messages, you need to communicate in small groups and allow for feedback in multiple ways.
⻬Portraying insincerity:You can’t hide insincerity. People communicat- ing about scorecard must believe in the Balanced Scorecard and come across in a sincere way. You want employees to trust you and actually try out the concepts, even with the risk of failure, because you truly believe it will work in the end.
⻬Trying to tell everyone all by yourself:Face it, you don’t have enough hours in the day to sing the praises of scorecard by yourself, nor do you really want to try. Part of successfully deploying Balanced Scorecards is delegating the responsibilities to lead, develop, and implement score- cards at different levels. You’ll realize that it’s often better to learn by doing than by being told what to do.
⻬Dispensing inadequate communication:Believing in and implementing Balanced Scorecards takes not only considerable planning and timing, but also constant nurturing, attention, and advocacy by you, your man- agement, and workforce teams. Most folks find managing four legs of the scorecard simultaneously within a complex business environment scary, so they need constant reminders that it will work.