In my first "on the road" post, I talked about how critical it is for a new Balanced Scorecard to demonstrate early results that the executive team cares about (and I provided some steps to help you do so).
Now continuing with my theme of key insights I've learned while implementing the Balanced Scorecard framework across the country, this time I'd like to tackle a question that I hear all the time. I think this is probably the #1 most confusing aspect about Scorecards for people I work with: "Is the Balanced Scorecard strategic or tactical?"
The answer is that yes, the Balanced Scorecard is BOTH STRATEGIC and TACTICAL.
As I answer, I'm reminded of a comment I made in my first "on the road" post -- the very fact that the Scorecard has so many benefits is also its biggest downfall (it can be so many things that sometimes it fails to be good at any of them). There is a similar paradox here. The fact that it's both strategic and tactical is both good and bad.
This can be a good thing because while tactics are critical for keeping your doors open this year, strategy will ensure that your doors stay open in 3 years.
This can be a bad thing because it's a cause for cultural resistance. Most folks already have tactical systems in place, so saying that a new Scorecard framework has a tactical aspect may mean that it threatens to replace what people already have, what they are used to, and what they might really like.
I'll go one step further. If people in the midst of a scorecard business review are given the choice between talking about strategic or tactical issues, they will almost always choose the tactical issues (and likely get bogged down in details). Why? These things tend to be in their comfort zone. Strategy by definition is something bigger. Something that can be uncomfortable. It often requires change.
So how do you overcome this resistance when developing and implementing your Balanced Scorecard? Leave room for the strategy. If you don't set aside "space" on your scorecard for strategic issues before you start, inertia will take over...tactics (the things that are familiar) will take over.
Establish rules for what % percentage of the objectives/measures will be strategic vs. tactical at each level of the organization.
Then, once you've built the strategic issues onto your scorecards, you still have to have the discipline in place to review those strategic issues to maintain focus on those issues. So when you start conducting business review discussions, you should also develop a structured playbook or standard operating procedures that these reviews follow. It should include:
- A protocol for setting the agenda (who sets it, who approves it)
- A protocol for sequencing the discussion (strategy first, fighting fires perhaps second, tactics third)
- A protocol for asking questions about measures (including a checklist to make sure the hard questions are asked)
I'd love to hear your thoughts on this issue! First of all, has it been an issue? Did you make any rules about how "strategic" your scorecards should be?