In one word, “yes.” Balanced Scorecards are both strategic and tactical, depending upon where they exist in an organization.
Before I explain, let's take a step back and define terms. What do we consider to be strategic? The practical definition is that it is what emanates from a strategic planning process, usually in the form of multi-year strategic improvement goals or objectives (such as "Grow Global Revenues") or as strategic imperatives or initiatives that support these goals and are time-bound by design (e.g., "Develop two new products to fuel global revenue growth"). Tactical can be defined as those activities that are designed or carried out with only a short-term end in mind.
So strategic issues are longer term and improvement-focused and therefore appeal to -- and must be managed primarily by -- the senior leaders of an organization. So since they own these issues, senior-level scorecards should clearly be dominated by strategic -- not tactical -- goals and issues. And to be really forward-looking and strategic, senior management-level scorecards should have multi-year targets for goal measures and multi-year improvement initiatives, as well. Some of these initiatives might have milestones that start later in the current fiscal year or even in future years.
As scorecards are cascaded down through an organization, they morph from level to level, containing more and more tactical or operational issues as they progress into lower levels of the organization. So, at the bottom of the organization, where executing the daily work leaves little time for significant improvement efforts, the scorecards consist of goals (or objectives) and measures that are often hitting their targets, with a smaller number of resources committed to strategic or tactical improvement.
This is important for three reasons:
First, a front-line scorecard should make it clear to the department employees exactly what they are responsible for, while indicating how it is aligned to the organizational strategy and important for them to manage. Seeing how they fit with the organizational strategy is a great motivator.
Second, the monthly reviews of the performance of those lower-level scorecards focuses largely on keeping measures on target that are already performing well. It is the front line that must do this because the top of the organization is primarily focused on longer-term strategic improvements. Of course, the strategic improvements will require some participation from the front line, so those milestones should be reviewed for quality, cost, and timeliness as well.
Finally, all levels of an organization appreciate the recognition of a job well done. Having front-line scorecards that have a majority of measures that are meeting target exhibits to both the employees and their management what a good job they are doing.
As you are developing scorecards for your organization, keeping these strategic vs. tactical guidelines in mind will help you put the right level of issue on the right scorecards -- leading to a better performance management framework and much better odds that your scorecards will actually drive the improvement you seek. Again, keep top-level scorecards focused on the outputs of your strategic planning process. For scorecards at the next level down, include any top-level scorecard issues that are relevant, along with some goals or initiatives that reflect their unique issues. And build your lowest-level scorecards based on the specific area's business processes and process measures.
If you're just getting started with this process, you might find it helpful to look at some example cascaded scorecards. Also check out a recorded webinar about this topic from our archives, which covers some tools that will help you cascade scorecard content to multiple levels.
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