Building your company's top-level Balanced Scorecard (BSC) can be exhausting. Seriously. After standing in front of various opinionated, often distracted groups of executives and managers for hours or days, your feet will hurt, your back will be sore, the smell of whiteboard markers will make you ill, and the effort of forcing a smile and staying ultra-energized will have taken a toll.
And this top-level BSC is just the start. You still have to cascade scorecards down through multiple levels of your complex organizational hierarchy. Facilitating this process is not for wimps. Especially if your organization has a low tolerance for exhaustion. Most do, which is why so many companies fail to execute strategy successfully. It's hard work. It's basically never-ending. And the execution parts are not as engaging for most executives as strategy development is.
So what are some ways that you – the internal evangelist for Strategy Execution – can thwart organizational exhaustion? Create and sustain scorecard momentum? Here are some tips that should help.
Tip #1: Cascading must incorporate top-down and bottom-up thinking.
Cascading scorecards is all about creating the linkages from the top strategy to the various organizational levels where the strategy can be executed. To effectively create these linkages, cascaded objectives and measures should be derived using both top-down and bottom-up inputs. The top-down element ensures strategic alignment and "golden threading" down through the organization. The bottom-up element ensures that owners/users of the scorecards actually believe in them so they will use the scorecard to run their piece of the business (and execute their piece of the organizational strategy).
This dual approach makes for a tough balancing act. You absolutely want managers and employees to "buy in" to their scorecards so they will begin transitioning their behaviors to focus on the critical few objectives and key measures identified on their scorecards. If they feel that scorecards are just reports they must create to comply with senior management whims, they'll just keep managing the way they always have, ignore the scorecards, and lead to failure. So it's imperative to include the scorecard and process owners in this bottom-up building fashion.
But if you take every department through a scorecard building session where a SWOT is performed to identify objectives, measures, and initiatives from their vantage point, and then you run through an alignment matrix to ensure they have objectives and measures aligned upward to the strategic level, there is a huge risk of fatigue. Fatigue leads to negativity, which spreads quickly from group to group and can lead to areas boycotting the scorecard system before they even understand it. This takes us to tip #2.
Tip #2: Realize that winning "hearts and minds" is a critical part of the cascading process.
Building a good top-down/bottom-up cascaded scorecard typically requires that you sequester a small group for half-day "cascading workshops." You want participants to walk out of these sessions feeling inspired by the clarity of their new objectives and enthused that it only took a few hours. You do not want them to walk out confused, tired, irritated by the process, and ready to blab about how torturous it was to their colleagues (who are invariably on the upcoming schedule).
The keys to winning over the teams are 1) preparation 2) education 3) speed and 4) being able to roll with the punches.
1) Preparation
- Have the right people: the owner of the scorecard you're building, his/her manager, and the key "process owners" that contribute to this scorecard.
- Do your homework. If you'll be the facilitator, you should learn about the group whose scorecard you're building. Know their issues. Understand how they currently run. Will the group be swamped with spinning processes and volumes of data or do they work on unpredictable projects that “can’t be measured?” These issues will determine tactics to use during the workshop session.
- Set expectations clearly. Be sure attendees know about pre-work well in advance and are prepared to focus for about 3 hours.
2) Education
- Provide pre-read materials on Balanced Scorecard concepts and terminology.
- Provide overviews of the tools you'll be using (such as SWOT analyses, objective and measure cascading matrices). Include pre-completed examples.
- Have someone call attendees a few days before the session to be sure pre-work has been done and to answer questions. The more they know and understand, the better the session will run. Also, the more preliminary thinking they have done, the more ground you will cover.
3) Speed
Thinking about objectives and measures is mental exercise, so help the group set a good, sustainable pace. If the group is stuck on a topic, leave and come back. Don’t allow dead air and blank stares to happen. If there are tough topics, skip them and tackle the easy ones to get some "wins." Come back later to the toughies once you're warmed up. Don't aim for perfection, but do aim for a solid first draft.
4) Roll with those punches
Be ready for passive resistance. Don't be surprised by outright hostility. Be flexible, yet tough enough to ensure that the group walks out with a scorecard draft that shows vertical alignment to strategy and embodies whatever they feel is ‘their stuff.’ I ran one cascading session where the team could not seem to come up with a single objective and had no idea what to measure. Then, at the very end of the session after much painful work extracting meaningful information, someone pulled out a spreadsheet that showed all the key metrics for the entire department, tracked on a tidy internal dashboard. Why didn't we start with that? I'll never know. The moral: be prepared for anything (and keep that desire to bang your head against the wall in check).
Tip #3: Don’t be a perfectionist, but do aim for 80%.
At the end of the day, cascaded scorecards do have to be right. Not perfect. But definitely right. Shoot for 80% and plan to improve them as the scorecards are used to manage the business. One caveat: scorecards must have at least some level of top-down and bottom-up alignment. If you go through all the effort to mitigate organizational fatigue and garner buy-in from the various teams, but end up with scorecards that only capture bottom-up views, failure will follow. Maybe not immediately, but eventually. Why?
After people go through the cascading process and get over the initial shock of putting significant time and effort into building out the scorecards, they start to see the value of focus, alignment, and improvement in their business. This really only happens when the top-down model and bottom-up model are combined. If this process is short-changed, what’s left are scorecards that were a complete pain to build and only marginally effective in the long-term. Whoo-hoo. That’s certainly not a recipe for success.
Tip #4: Stick to your guns. Dole out the bad tasting medicine. They will thank you for it later.
The most satisfying phase in a scorecard project usually occurs about a year after cascading. This is the point when people come back to you and gush about the improved clarity of their job function and strategic impact. Most of the naysayers will have turned the corner and become believers. Those that haven’t may have left the organization. The internal processes that were missing (i.e. how to collect data for measures) will exist. Business reviews will now be running smoothly and revealing actionable root causes, rather than being the monthly time-suck that they previously were. The accountability that comes with scorecarding will have worked its magic. Some key measures will have shown improvement. And when the bottom line improves, everybody jumps on board.
Tip #5: It's a marathon, not a sprint.
Stick with it, pace yourself, and don't forget those fluids. You'll need the energy, but it will be more than worth it in the end.
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