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So you've been reading articles on the BSC Hall of Fame for 7 years now and you're trying to figure out how they do it. How have these organizations been able to go the distance with their strategy management program? Here are some key steps to take to ensure your project survives the transition from development to execution and beyond.
Own it, Share it, Live it One commonality I see with all successful strategy management programs is an emphasis around communicating the Balanced Scorecard and overall strategic destination to all employees in the organization. I see some organizations struggle from one reporting period to another with trying to keep all the scorecard data up to date. When I sit down to discuss their concerns around having to (what seems like to them) continually update their BSC, nine times out of ten I see that there is one, or perhaps two owners for all the themes, objectives, measures and initiatives. These organizations are setting themselves up for failure because the entire scorecarding process cannot efficiently be performed by one person. This structure also conflicts with the natural change management aspect of scorecarding and strategy mapping.
Employees need to be exposed to the strategy. It needs to become part of daily and weekly dialogue. The best way to achieve this is to communicate the strategy through ownership.
The first step a Balanced Scorecard core team needs to take when beginning to report is to pull as many team members into the process as possible by assigning them as "owners" or "analysts" to themes, objectives, measures and initiatives. In order to take this first step, the leadership team needs to be willing to let go of the strategy, to open it up to the organization, and to empower the employees with line of sight into their organization's strategy map and Balanced Scorecard. We are aware that some measures data and other scorecard components can be sensitive and many applications have the flexibility to restrict users from specific areas of the scorecard.
Consider the owner's job responsibility when assigning ownership. Match function with strategic component(objective, measure, initiative) in the ESM to ensure the update can be performed efficiently and intelligently each quarter. The employee doesn't have to be a manager to contribute. In fact, it's very common to see a subordinate employee draft performance analysis and recommendations for a leadership team member. It's okay to have two people who perform similar tasks contributing performance analysis and recommendations to one objective as long as it is coordinated.
A one scorecard organization could reach out to over one hundred employees by assigning ownership out for all its scorecard components (estimate 20-25 objectives, 35-40 measures, 15-25 initiatives and dozens of milestones on any given scorecard). This level of responsibility will begin to drive the communication, understanding, and execution of the strategy.
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Balanced Scorecard champions or sponsors are often faced with two critical "buy in" challenges: getting fellow leadership team members on board and then rallying an entire organization to manage to a Balanced Scorecard.
Great ideas need to start somewhere and that place is usually close to or within a leadership team. BSC champions might pick up a scorecarding article in a lounge, come across a testimonial on the Harvard Business School Publishing website, or learn about the practice through colleagues. Regardless, there is a "marketing job" that needs to take place that will both educated colleagues and get them equally excited to adopt this new approach.
The best place to start is with educational materials, either in the form of multimedia toolkits from http://store.palladiumes.com or in the form of a multimedia demonstration from the Executive Strategy Manager team at Palladium. You need to get individuals excited to embark down this journey and case examples and testimonials is a great place to start. Once the leadership team is bought in to the process, we turn our attention on an even great hurdle: transforming an entire organization.
Organization transformations occur one person at a time. A great way to begin this process is to identify "change agents" and "catalysts" within the organization and get them involved in the process. They could simply have the role of adding comments to the strategy as compiled by the leadership team in the ESM or a more formal role around "owning" the reporting and management of one or more objectives on the strategy map and Balanced Scorecard. Regardless, if a leadership team hand selects the right individuals to carry the message through to the rest of the organization, chances are good that the change management process will have a synergistic effect within the organization.
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We mentally prepared ourselves for a photo finish. We ran through all the possible race scenarios. We were all but sure the race would come down to the last few strokes. We were wrong. At the 800 meter mark, I looked across the course and counted 4 boats. I counted again and again to make sure my mind was not playing tricks on me. We had open water on China, Greece, Slovenia, and Belgium and we were a seat up on the Ukrainians. We had only rowed in our line-up for a month and we executed our strategy. We were going to the Olympics!
What's interesting to note in my short recount of our 2004 Athens Olympic qualification race is that we were prepared to react to our environment and augment our strategy to succeed. Likewise, the scorecard is only as good as its execution. You could pay hundreds of thousands of dollars for scorecards from the board room right down to the front line employee, but if the employee doesn't understand the strategy and how he or she contributes to the strategy, you won't be able to react in time and thereby fail to execute. Let me provide some tips and tricks in the Executive Strategy Manager that organizations can apply to ensure your workforce is ready to execute.
Again, the design phase is important, but ultimately, it's all about the execution. To set your organization up for a fast start, select your all stars and put them on the team. Your strategy is worth the best.
Second, get everyone into the Executive Strategy Manager right from day one. The application is built for easy navigation by all types of users.
Third, when the scorecard is fairly set, share ownership of objectives, measures, initiatives, and milestones with as many employees as possible. This reduces the ongoing reporting effort required by any one person, drives communication, analysis, and reflection on the strategy, and ultimately, drives execution.
Forth, drive all reporting meetings with the ESM. The ESM has a simple interface that allows you to navigate between your scorecard and get at the story behind the strategy. Whether it's a corporate executive team or a divisional support unit group, the ESM creates the right structure to execute your strategy.
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Watch our new 5 minute demonstration video!
As you may have noticed, we have now posted a video on our home page which outlines the Executive Strategy Manager's overall functionality. This may be helpful when you are showing new employees what exactly this so called "strategy software" is meant for and how it is different from all of your other system software. Please go to our home page and click view Multimedia Demo to watch it.
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Today I sat in on a number of speeches and presentations given at the Global Public Sector Summit here in Washington DC. Public Sector organizations from all over the world come to this conference in order to learn best practices and see how other public sector organizations have utilized the balanced scorecard to manage very complex and many times very inefficient agencies.
I sat in on a number of speeches today, but among others, Fulton County, a client of ours, gave a very interesting presentation on how the balanced scorecard has enabled them to achieve break through results with in their top level, student achievement perspective. I'm also very happy to say that the Executive Strategy Manager was mentioned as being the best visual representation of the balanced scorecard. They are currently using our software to link all of their strategic initiatives to their overall objectives within their strategy map, and in doing so they have been able to communicate their strategy very effectively to their board of directors.
Their next plan will be to lock their 2008 balanced scorecard within the Executive Strategy Manager and post the application, set as a browser level, on their website for the entire community to see. This will allow for anyone and everyone to see the performance of their strategic measurements and how those are mapped to their strategic objectives and initiatives.
If you'd like to learn more about Fulton County, please go to our case study section on our website: http://www.executivestrategymanager.com/customers_success_fulton.cfm
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I continue my dialogue on building a scorecarding program that will stand the test of time. The idea of automation is thrown around a lot with technology, yet we all know that if the right process or data isn't automated correctly, you'll probably spend more time cleaning up mess than had you simply kept it manual.
The number one reason why Microsoft PowerPoint and Excel fail those who attempt to manage their BSC program in it is because
it's a cumbersome process; there is next to no automation. The Executive Strategy Manager creates a repeatable process that allows for what I will call three levels of automation.
The first level of automation is included in the core functionality in the strategy management platform. Automatic features include clicking a button to instantly copy forward subjective performance analysis and recommendations or color coded performance labels. The ESM includes automatic target status setting and email reminders when performance hits a certain threshold or a user has made an edit to a scorecard component.
The second level of automation is data sourcing measures, and it is available in our enterprise license (if you are ESM user, you most likely license our enterprise version, the most popular option). Data sourcing simply means that if you can export data from any type of database in Excel or CSV, you can upload it into the ESM. Once you establish the links in the ESM, by means of a simply query, you can simply upload one or many files and have your content automatically refreshed for your data sourced measures.
The third level of automation is to build a mini application or web service that can pull data (including text and numbers) directly from databases and data marts. The web service can be entirely automatic or contain manual steps if desired. The web service can also automatically push updated data from the ESM into virtually any type of output desired. Web services is typically employed when the scorecard is well established. This level of automation can make for a much more hands-free scorecard upkeep approach. Some degree of human reflection on the strategy will be required, regardless of if it takes place in the ESM or another application. This analysis, as reviewed by peers in strategy review meetings is where the real power of the BSC process is realized.
If you are using the ESM, reach out to your client manager to discuss these services. If you are considering another application, be sure that these levels of automation exist as part of the core license (not a customizable feature).
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To add on to Travis' last post, I wanted to briefly discuss the new "Limited Reporter" role now available in the ESM. One of the comments we received from a number of organizations about our "Analyst" functionalty was that it didn't fit their desire to allow some users full browsing but limited editing. The Analyst role only lets you see what you can update, and thus there is no ability to access meeting view.
To address this, we created the Limited Reporter role. Much like the standard reporter role, this allows you to access meeting view and browse the full scorecard. When, you click the lock in the Meeting View navigation, however, to unlock editing mode, it will only allow you to update the specific items you've been given access to. Everything else will be read only. Of course, as with the analyst role, you can also use the quick update interface to make all of your changes.
Hopefully this new role will enable more users to use meeting view as their primary interface with the ESM, and will enable more organizations to take advantage of the selective update functionality.
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Since the release of the 4.5 version of the ESM, I've received a number of questions from users asking how to update the status and analysis for objectives, measures and initiatives within the Report Center as the once familiar "Update Status" button is no longer part of the ESM navigation.
To reduce scrolling and make navigating the ESM easier, all of the update and navigation buttons for objects have been grouped together in the upper right-hand corner of each screen. You will note the addition of a "Traffic Light" icon. By clicking on this icon, you will be able to change status, add analysis and recommendations, or update measure charts.
For those of you who are interesting in saving time and clicks, I highly recommend eliminating your use of the Report Center altogether. While many of you are familiar with conducting meetings and review sessions via Meeting View, you can also update all of your content – both information that lives in the Design Center and Report Center – via Meeting View. Simply unlock your screen (via the lock icon) and click on the traffic light to update Report Center information. Looking to make a change to a definition, simply click on the pencil and paper icon to update Design Center content. This process becomes even easier via the newly launched myESM functionality – see referenced blog for more info: MyESM.
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When you first log in to the ESM 4.5 version, it may look like nothing has changed. We've done this on purpose to help you transition from 4.0 to 4.5. But if you want to unlock the true power of ESM 4.5, click on the "Client Admin" link on the upper right.
For Meeting View, you now have the option to enable "MyESM," which gives you a personal dashboard that you can view and print. You can also add trend arrows to show the direction of your measure or objective, and enable mouseover previews to get a quick glimpse into the performance or chart of a measure, objective, or initiative.
If you're using period based reporting (and we strongly suggest that you do), you can now configure auto-evaluation of measures using an interactive target scheduler. You can also create all kinds of charts using the XML chart format, and roll up information from your cascaded scorecards.
With PBR enabled, you can also create "driver measures" that can be shared across scorecards and rolled up as necessary. Speaking of sharing, you can also share (or assign) initiatives to cascaded scorecards.
Finally, a great new feature in ESM 4.5 that you may not immediately notice is the robust PDF export functionality. Anything you can create on the screen (and you can do almost anything now) can be exported to PDF. Click on the PDF icons (especially the ones on the Summary page) to learn more.
There's a lot of great stuff in this release. Please reach out to your Palladium project manager with any questions or if you'd like more information.
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Many of my clients run into a dilemma when trying to time their reporting cycles with the availability of data. The problem is that many of the measures are collected monthly, some quarterly, and a few daily or weekly. So there in lies the dilemma: Do you report out through the ESM daily, weekly, monthly or quarterly?
My suggestion is to always look at the information you are collecting, assess its degree of strategic importance and formulate your reporting meetings around the delivery of the majority of that data. Also, what is the culture of the organization when it comes to scheduling, preparing for, and showing up to meetings? Be reasonable. A culture used to reporting quarterly should probably stick to a quarterly reporting cycle. I am an advocate of holding brief reporting meetings at the end of the first and second month of each quarter (focusing on key initiatives or poor performing areas) and then holding a full strategy review meeting immediately after quarter close.
Measures can be structured to collect and display data as often as you want. However, keep in mind that if you are working with Period Based Reporting (PBR) measures, the data collection points run off your reporting periods set in the ESM client administration. Therefore, if you are working on quarterly cycles, you can only display data quarterly. This restriction is put in place to allow for data roll up of both driver measures and cascaded scorecard measures (data reporting points must be consistent). This doesn't mean that you can't upload an Excel file with a detailed view of all the data points for reference. If data roll up is not utilized, a simple Office Web Components (OWC) measure will provide you with unlimited versatility when it comes to setting your data collection points. Just keep in mind that data from the OWC measure can't be aggregated to a parent scorecard. They are completely stand-alone.
When it comes to reviewing the data during a reporting meeting, you should work with what you have. If measures are collected quarterly but you report monthly, provide some performance analysis but be sure to mention that it is based off of incomplete data or trends. Likewise, if you collect data monthly but report quarterly, it's ok to report out on all three months during the quarterly review.
A new feature in the 4.5 release of the ESM allows for custom dashboards and data views. You can structure the measures dashboard to display the information in a manner that supports both your reporting timeframe and your personal requirements with accessing the data to make strategic decisions.
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One commonality I see with all successful strategy management programs is an emphasis around communicating the Balanced Scorecard and overall strategic destination to all employees in the organization.
I see some organizations struggle from one reporting period to another with trying to keep all the scorecard data up to date. When I sit down to discuss their concerns around having to (what seems like to them) continually populate quarterly data into the ESM, nine times out of ten I see that there is one, or perhaps two owners for all the themes, objectives, measures and initiatives. These organizations are setting themselves up for failure because the entire scorecarding process cannot efficiently be performed by one person. This structure also conflicts with the natural change management aspect of scorecarding and strategy mapping.
Employees need to be exposed to the strategy. It needs to become part of daily and weekly dialogue. The best way to achieve this is to communicate the strategy through ownership.
The first step a Balanced Scorecard core team needs to take when beginning to report is to pull as many team members into the process as possible by assigning them as "owners" or "analysts" to themes, objectives, measures and initiatives. In order to take this first step, the leadership team needs to be willing to let go of the strategy, to open it up to the organization, and to empower the employees with line of sight into their organization's strategy map and Balanced Scorecard. We are aware that some measures data and other scorecard components can be sensitive and we have built in the flexibility to restrict users from specific areas of the scorecard and map within the ESM.
Consider the owner's job responsibility when assigning ownership. Match function with strategic component(objective, measure, initiative) in the ESM to ensure the update can be performed efficiently and intelligently each quarter. The employee doesn't have to be a manager to contribute. In fact, it's very common to see a subordinate employee draft performance analysis and recommendations for a leadership team member. It's okay to have two people who perform similar tasks contributing performance analysis and recommendations to one objective as long as it is coordinated.
A one scorecard organization could reach out to over one hundred employees by assigning ownership out for all its scorecard components (estimate 20-25 objectives, 35-40 measures, 15-25 initiatives and dozens of milestones on any given scorecard). This level of responsibility will begin to drive the communication, understanding, and execution of the strategy.
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In 2006, customers gave us clear feedback: Make the tool easier to navigate! With that came the redesigned Meeting View. I'm sure you have seen it. When you login to the ESM, just click on the "Meeting View" link in the left navigation.
So, how can you best utilize Meeting View? Hmmmm. First, notice that there is a PDF icon at the top right of each screen. This means you can take any page you see and export it to PDF format for emailing, printing, etc.
Second, next to the PDF icon, there is a lock. If you have the right access, you can unlock the screen and update information directly from meeting view. You can update your analysis, data, color status, etc.
Third, you can use the Action Items (from the top navigation) to assign work out to individuals on your team from the strategy review meeting. This feature will send them an email, and you can start your next meeting with action items to review progress.
In our upcoming release (beta on July 1), you will be able to create personalized views throughout the meeting view. This will allow you to structure the information the way you want to see it.
I'll write more in the coming weeks about some features you will find in 4.5. If you are utilizing meeting view, I think you will be blown away by the upcoming features.
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After using the tool for a few months, many organizations come back to us and ask us how they can make their management meetings more effective, and how they can drive more cross-functional collaboration and communication.
One way that many clients are driving this collaboration is through the use of "strategic themes." Strategic themes are a collection of objectives that are linked together to describe one of the key areas of your corporate strategy.
For example, a strategic theme for us is "fanatical customer support." We're always looking for ways to help our clients get better use out of the tool, and for ways to better manage with the Balanced Scorecard.
Customer support, however, is more than just picking up the phone and responding to emails. It affects everything from product design, to sales, and to support. We have a number of objectives around customer support in all areas of our operations.
By grouping our objectives into themes, and reporting on themes in our Balanced Scorecard report meetings, we're able to focus on a key area of the strategy and have a real deep cross-functional strategy discussion. We also report on initiatives that are linked to the theme.
From the research we've done at Palladium and BSCol, we've identified the following as themes that often show up on scorecards:
Product Innovation Customer Management Operational Excellence
(You may recognize these as elements of the customer strategy proposed by Tracy and Weirsma. That's by design.)
If you're currently using the ESM, it's very easy to enable theme reporting. Just go into the client admin / system options, and select "yes" for theme reporting. You'll see it in the meeting view.
And, as always, if you have any questions about theme reporting or any other part of the ESM, reach out. We're here to help.
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We have had lots of people ask about how to report the same information in multiple scorecards. When I say multiple scorecards, I'm referring to people who are reporting strategic information like measures and initiatives in corporate, business unit, and division scorecards.
There is a neat Trick to making this happen.
I'm not sure if this really qualifies as a trick, but it is pretty easy. First, get your client administrator to synchronize the periods across all of your scorecards (this way the information you report is consistent). Once that happens, you can allow your initiatives to be shared by multiple socrecards. That means whenever it is updated in one area, it will be updated in another.
The other thing you can do it to have your measures from child scorecards roll up to parent scorecards. If you want to "share" a measure with a parent scorecard...just let the parent measure be the sum of only the one child measure. The information will then be duplicated.
One final pointed, let your ESM contact at Palladium know when you are going to synchronize your periods, it will allow us to ensure you don't lose any data (visually...don't worry, it won't be lost permanently).
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I recently observed a colleague of mine logging in and out of the ESM to switch from one cascaded BSC to another. Curious as to why he was doing this I asked, "What are you doing?" Realizing that a question's sophistication elicits a similar response, I was told "Switching scorecards to make another update". To his response I quickly pointed out, "but you logged out of the tool".
The frustrating stare that was a response was my indication that I was quickly moving down the wrong path. Rather than further agitate what may have been a last nerve, I responded in what seemed the only reasonable manner – "Let me show you a trick to save you time".
My colleague, new to using the ESM, like many users did not realize that you could switch between quickly and easily, without having to log out of the application. There are actually two ways to do so depending on which portion of the ESM you are working in. From within the Design Center or Report Center, you can navigate between scorecards (or hot swap BSCs), by clicking on the "View User/Scorecard Details" link in the lower right hand portion of any screen. This helpful link will also enable you to manager your profile (text editor, password, email address). If you are in Meeting View, you can simply select the scorecard you wish to access via the "Scorecard" drop down menu and begin updating objectives, measures, and initiatives via the Meeting View update functionality.
Although unhappy at being the punch line of a lunchtime joke, my colleague even weeks later still passes on words of appreciation for showing him how to switch scorecards without logging in and out of the ESM. (It turns out that he was able to show a few of his clients these tricks to the exclusion of the core team lead so that a little humor could be had at his expense!!) Its funny how a simple tip can add a bit humor to developing a Balanced Scorecard program.
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I cannot emphasize enough the importance of consistent and clean charts. Your executive team should spend time discussing strategic information and recommendations, not trying to interpret a complex, multi-colored chart.
Strive to make your charts simple and consistent. By simple, I mean when at all possible, try to have two data points. You should have a target and an actual. This will allow people to quickly interpret a chart.
For consistency, you should try to have all of your charts represent targets and actuals in the same way. This means that targets can be blue lines, and actuals can be gray columns. Once a user gets used to seeing that, they can quickly interpret the information.
There are several ways to focus on consistency. One is to put the ideal chart in the chart gallery. This way, other measure owners can just pull the chart type and change the data in it.
Another way is to design all the charts, and then lock them down in the system so that the measure owners can only add actual information. This must be done in client admin.
As the ESM becomes more comprehensive, you must remember as a user that the more simple you can keep the information, the easier it will be to conduct your strategy management meeting.
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I give a lot of demos and training sessions for our application around the globe. I always get asked the question, "does your software integrate with outlook?" For all users of the software, the ESM tracks their first name, last name, and email address. So this allows a scorecard manager three easy ways to take advantage of this.
Email Reminders A scorecard manager can use the client administration features to send an email reminder to each team member responsible for updating information in the ESM before the management meeting. The reporter would get an email that has links to all of the objectives, measures, and initiatives that they should update for the meeting.
Action Items During the meeting, users can add action items and asign them to individuals that have usernames in the software. This would send them an email with the contents of the action item. When they complete the action item, an email is sent back to the creator of the action item.
Subscriptions Beneath each objective, measure, and initiative in the Report Center is the capability to subscribe to an object. You can choose to be notified when the object is updated, marked complete, or if a particular status color is reached.
Tip for leveraging more email The ESM also accepts HTML in normal fields and displays them as hyperlinks in the meeting view. Thus, you can code a username with HTML as a reference for an email address, and if a user has a question about the information they are seeing, they can click right on your name to send you an email.
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