Can Large Organizations Successfully Implement Balanced Scorecards?

Can large organizations be successful with a BSC? Yes. Absolutely. I've seen success at complex organizations that employ tens of thousands of people. But large organizations, even more so than others, must remember to continually go back to five basic building blocks that make a Balanced Scorecard (BSC) framework successful.

1. Executive Engagement
2. Focus
3. Support
4. Alignment
5. Sustained Results

Regardless if your organization is just starting or has traveled far down its strategy execution journey, if you don’t have all five of these building blocks, your BSC framework will come to a grinding halt. The true measure of success, of course, is contained within that fifth building block, SUSTAINED RESULTS. This is both a building block (you need to show results to maintain momentum) and a measure of the entire framework's effectiveness.  Here is what you should look for in each building block:

Executive Engagement

At a large organization, it's hard work to bring senior leadership together on a consistent basis to look at their scorecard.  However, success won't be built on getting senior leadership to attend the kickoff meeting, to know how to view their scorecard, or even to attend regular scorecard reviews. You need their engagement.  They need to role model the behavior they expect from their direct reports, to communicate to measure and initiative owners just how important their input to the BSC is, and to actively participate during scorecard reviews to keep measure and initiative owners from escaping accountability and progress.

 

Focus

At a large organization, complexity rules.  Over time, you'll witness the tendency for scorecards to get overwhelmed with objectives and measures.  This "slippage" lets people revert back to pre-BSC days of non-prioritized fire fighting.  It's okay to add a new objective or initiative when it's appropriately aligned and urgent, but your organization does not have limitless access to people and money.  As an "internal consultant" on your BSC, you have to manage this tendency to pile on more objectives, measures, and initiatives after the initial scorecards are built. Without focus, your organization will try to focus on too much at once and in the end get very little accomplished.

 

Support

For a BSC to work -- especially in a large organization -- balanced scorecards must be kept up-to-date and reviewed thoroughly and regularly. This requires a certain amount of support, especially in the areas of prepping for scorecard reviews, delivering scorecard software training, managing scorecard content restructuring, data loading, and leadership direction. Here are some questions that commonly "bubble up" in a large BSC deployment, highlighting how important a support structure is:

• How do I train my team on the Balanced Scorecard      approach?
• Where can my team obtain scorecard review coaching?
• What happens to my scorecards if there’s a reorg?
• Where can I get a new hire trained on our scorecard      software?
• How do we share best practices across the scorecard      teams?
• How can I make preparation for scorecard reviews more      efficient?
• What does management want to see in my status updates?
• Who will tell me if the scorecard software      functionality changes?

Being able to answer all of these questions (and more) will lead to a much smoother roll-out of Balanced Scorecards across a large enterprise.

Alignment

There are lots of important aspects of alignment in a BSC deployment, but in this case I'm specifically speaking about initiative alignment -- ensuring your improvement efforts are aligned to the priorities you've identified through your BSC cascading process. Certainly you may see a temporary lift in performance by simply bringing executives together and discussing what the organization should focus on as well as what the targets should be. However, true sustained results come when you align an initiative to an under-performing measure on a scorecard, then track progress of the initiative and watch for the impact on the measure. Don’t wait too long before updating management on the status of initiatives that will impact measures on their BSCs. By highlighting progress on aligned initiatives during scorecard reviews, they will have a greater chance of getting completed on time because you will have brought together the individuals with the authority to make decisions on priorities and budget. When initiatives get DONE, measures improve. If measures don’t change after an initiative is complete, then you’ll need root cause analysis to pick a new, more focused, better aligned initiative.

 

Sustained Results

This last building block is sort of self-fulfilling. If a BSC is not creating sustained results, which is the promise and the purpose of a BSC, senior leadership support will wither and their engagement is the lifeblood of the BSC. If it does show results, the framework will be praised and its importance will become ingrained. So what do those results look like? It’s okay, in fact desirable, to see red stoplight indicators on the top level scorecard. This shows me that the executive team isn’t letting their direct reports “low ball” their targets. What they need to see is that the line graphs on their top level measures are moving CONSISTENTLY in the right direction. And for those lines that are not moving in the right direction, they are confident that the owners of those measures know the leading measures of performance and have initiatives that will move results that are on time and on budget. Not only will this keep the executives engaged, but it will create sustainable momentum throughout the organization.