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Did you know that the ESM can automatically evaluate the performance of your measures?
The attendees of our webinar on the Target Scheduler do!
Learn how to schedule threshold bands by period, so that when data is manually entered or sourced into the ESM, the performance color for that measure is automatically displayed.
Replay the session at https://breeze.palladiumes.com/p86173230/ or review the Target Scheduler reference guide in the FAQs and Help section of your account.
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In today's demand-driven and increasingly competitive market; the need for effective strategic management is imperative. This need has spurred the conceptualization of several management theories. Naturally, as delivery on promise differed, some have fared better than others.
One framework in particular, that of the Balanced Scorecard, has gained sustainable ground since its introductions by Drs. Kaplan and Norton in 1992. In fact, the BSc has even been regarded as the single most important management tool in Western organization, so much so, that over 50 percent of Fortune 500 companies utilize the methodology.
The BSC methodology enables the translation of strategy into action by helping everyone in an organization to understand and work towards a shared vision. This, however, necessitates the establishment of a support infrastructure to integrate, access, and communicate relevant data to the right people.
Increasingly, companies are turning to IT solutions to facilitate information transparency and the decision making process. Automated software applications, such as the Executive Strategy Manager, can assist in BSC implementation in ways such as providing a visual representation of strategy, integrating and communicating information throughout all levels of the organization, and making strategy execution an ongoing process by providing a new framework for reporting and feedback.
Many companies, however, are still supporting their BSC implementation with unsophisticated solutions like simple spreadsheets or slideshows. Consequently, they may be afflicted by problems resultant of lacking scalability; labor intensity; collaboration limitations; and analytical impediments.
Selecting the wrong solution can result in a significant loss of time, energy and money, and more importantly, it can also undermine the entire BSC development effort. This brings rise to questions such as "How can my company extract the full benefits of the BSC model?" and "Can a technologically advanced solution, such as the ESM make a difference in the success rate of my BSC implementation and work?"
These questions, and more, will be addressed in future installments; based on the findings referenced in the August 4th blog post titled "Independent Study Confirms: ESM Will Help You Succeed!"
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I recently came across a case study, published just last month, titled "Information System Effects on Organizations Balanced Scorecard Work". This study was focused exclusively on the ESM application – something our team believes to be the first of its kind!
The study concluded that the ESM does, in fact, positively impact an organization's rate of successful BSC implementation and utilization. The findings also allude to a correlation between the time of ESM introduction and the avoidance of common pitfalls.
Read at http://biblioteket.ehl.lu.se/olle/papers/0002989.pdf or stay tuned for more!
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To follow up on Kent's recent post, I'd like to remove my "Strategic Hat" for a few moments, and dive into the more uncharted territory (for me) of operational management. Historically, most organizations managed their strategic and business requirements as distinct silos. However, today's management processes need to maintain a firm footing in both areas.
Throughout the blog, we've done our best to share thoughts on best practices in managing strategy: How to use the ESM to maximum advantage, best practices in Balanced Scorecard Reporting, insights on initiative management and guidelines for employee performance measurement. What we haven't done however, is focus on operational reporting. Now it's becoming more and more clear that the conversation is not complete if you're only speaking about the strategic sphere or operational sphere, so I want to begin a dialogue around operational business intelligence (BI) and reporting.
Historically, organizations used business intelligence primarily to support strategic decision making. This is where the ESM has its sweet spot, allowing executives and managers make a smaller number of, broad-based strategic decisions, such as whether to make a corporate acquisition, introduce a new product or change product pricing, or expand the sales force. Tactical/operational BI enables managers and staff to make more frequent decisions, such as how to create a new marketing campaign, or how to analyze the impact of a new business initiative. As you get even more operational, report data helps a wide range of users, from all levels in the organization make thousands of operational decisions each day, such as how to deal with a delay, satisfy an upset customer, replace a defective part, deal with a shortage. As opposed to strategic decisions, operational decisions need to be made rapidly so that a problem doesn't escalate or an opportunity isn't lost.
This means that operational reports (and the BI systems that support them) must deliver real time information to users the instant that an event occurs. In other words, operational BI should provides the right information to the right people at the right time so they can make the right decisions to positively affect desired outcomes.
What we're trying to streamline now, is the optimal way to bridge strategy and operations. When reviewing operational info, how much does the strategic context matter. On the flip side, when reviewing strategic information, how deep into operational data should you dive, and how should the drilldown be structured. For those of our out there who are already tying together these discrete, yet interrelated processes, please let us know what conclusions you've come to.
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Meeting management is often interpreted in many organizations as your classic operational review. And for those organizations with strategic plans, it will sometimes entail strategic dialogue.
Organizations with an actionable strategic framework, like a Balanced Scorecard or strategy map, meeting management takes on a whole new meaning. Meeting management begins long before the actual strategy review meeting. Individuals need to reflect on the strategy several days (possibly a week plus depending on complexity of reporting environment) before a meeting, consolidate strategic data, comment on performance, and provide suggested next steps or recommendations. The point I'm driving at here is that the "leg work" or "heavy lifting" needs to occur prior to the actual meeting, NOT in the meeting.
Healthy meeting management within a strategy review meeting means that the data has been digested, and the agenda of the meeting is focused around off-target performance areas, reviewing the recommendations and deciding as a leadership team how to advance the strategy. The team will make decisions, capture those action items and then move on to the next strategic element that requires attention. Effective meeting management, as described here, is challenging to implement because most organizations are not used to this meeting style. I encourage organizations to look at their all star employees and select from that bunch who is the most effective facilitator. A good facilitator will understand the nuances of the business, the strategy in detail, and will garner the respect of leadership.
Finally, effective meeting management extends beyond the meeting to where action items and decisions made in the meeting are followed up on and closed out. There should be clear accountability around the activities and who is overseeing the process. I'd suggest to the community to explore the following three You Tube links for examples on effective meeting management.
The first link is an example of what most organizations look like when transitioning into effective meeting management around a strategy management framework. http://www.youtube.com/watch?v=RJAXQIAz9bk
The second link is an example of what should occur between the meetings. http://www.youtube.com/watch?v=4N5XW3usxEU
The third link is an example of what organizations look like once they transition into this way of meeting. http://www.youtube.com/watch?v=wIZziZfxfDI
Drs. Robert S. Kaplan and David P. Norton just published the Harvard Business Review Article "Mastering the Management System". The article begins by stating the challenge faced by most organizations: separating the operational management meeting from the strategy management meeting. Beyond the creation of strategy maps and Balanced Scorecards, the BSC co-founders profess a link from strategy to operations, which might be in the form of key process management, key process decomposition, activity based costing, analytical dashboards and more.
Some key take-away points in the article that resonated with me included setting up separate agendas for operational reviews and strategic reviews. Even if the meetings are held on the same day, and often times with the same people, it's still important to make the distinction in the agenda and supporting materials to ensure the discussion stays on point. I was happy to see the point conveyed in this article, one that I also make to my clients, which is to time in the strategy review meeting making decisions about the strategy, not reviewing data and listening to team members present the strategy. Some good steps to take to ensure compliance, populate data prior to the review meeting, pre present sensitive areas to key constituents, and get facilitators prepared to drive the team to consensus with actionable decisions.
The article concludes by coming back to the idea of a "closed loop" or feedback loop to ensure the strategy is updated to reflect the latest market environment, organizational climate, and is generally relevant. I encourage the ESM community to read the entire article and view some helpful graphics on an effective agenda, meeting structure, and the entire strategy and operations management processes.
http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?ml_subscriber=true&ml_action=get-article&ml_issueid=BR0801&articleID=R0801D&pageNumber=1&cm_mmc=npv-_-listserv-_-Jan_2008-_-HBRSA
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We'd like to invite you to participate in an interactive meeting management simulation which shows how the Balanced Scorecard can be used to help focus an executive team on strategy execution.
This session has been conducted (with rave reviews) at the Balanced Scorecard Annual Summit in San Francisco, the CMA Canada management meeting in Toronto, Canada, and the Office of Strategy Management Executive Working Group in Boston. Due to popular demand, we're offering it online for the first time for ESM clients and interested parties.
The webinar reviews the "dos and don'ts" of effective meeting management, focusing on executive engagement, effective agenda development, and enabling technology.
"The Ideal Strategy Review Meeting" webinar will be conducted on Friday, January 4, at 11 AM, Eastern time. Please contact Kent Smackto register. We look forward to seeing you there!
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I recently was asked to build a proof of concept in the ESM that showed the trends for measures and then a forecast for 12 months in the future. I was not given much information to start with, but as I researched it, I realized that companies trying to do this have a few challenges on their hands.
Since one of the ESM chart types is the Office Web Component from Microsoft, I started by looking at how Excel handles trends. I quickly learned that you can do linear trends, logarithmic trends, or rolling averages (among others). My quick take-away is that the type of trend would have to relate to the type of measure and the growth rate of that particular measure.
Another trend that I find useful is located within Yahoo Finance. You can get the stock chart for a company, and you can add to it, the 50 day or 200 day rolling average. These lines are a great way to take out the daily movements of stocks. Personally, I find that the 200 day rolling average is usually a smooth line that shows how a stock is performing over the long haul, independent of individual events. Comparing the current stock price against the rolling average can give you some information (which is probably good for a conversation on a different day).
So back to my conundrum, how should I mock up a chart that shows both a trend and a forecast? For the trend, I decided that a three month rolling average was useful for a measure that was reported monthly. A three quarter rolling average for a measure that was reported quarterly would be similar.
If you have different ways of showing trends, please comment to this blog. I am very interested. I'll cover the forecast in my next post.
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The web services now available in version 4.5 create brand new possibilities for the Executive Strategy Manager. With the ability to push and pull data directly from the ESM database into applications such as Excel, PowerPoint, and nearly any web-based application, you can pull real time data into your Excel reports or PowerPoint presentations by simply clicking a button.
With a full range of functions available, programmers can easily create custom reports and dashboards with "live" ESM data. Advanced users can use the same functions to fully integrate the ESM utility with their website or intranet.
Since web services access all data via the web and not through direct database communication, not only is it easy to set up, it is as safe and secure as accessing the ESM on the web. Access is granted and controlled through a username and password login system, similar to the ESM but using a separate user base to ensure controlled access.
The web services are included with all enterprise level ESM applications at no additional cost. If you are an enterprise level ESM subscriber, please contact esm@palladiumes.com for information on setting up your web services account.
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With the launch of web services in 2007, the ESM truly has become an integrated strategy management platform for organizations around the world. An early adopter with the web services, a government defense organization is streamlining the reporting process with their strategic initiatives.
In what used to be a completely separate technology and management process, this organization recently decided to link their customized strategic initiative software into the ESM. The design process entailed identifying the content to be linked between the systems and then writing a mini application to feed the data.
Organizations with in-house technical capabilities can write the application and those without can work with Palladium ESM programmers to build the correct web service. Palladium has a complete web service manual to support programmers through the process.
I look forward to Blogging on this organization's success with the web service in the near future. We anticipate a dramatic reduction in the time it takes analysts to enter data into the system, provide higher quality data, and ultimately, equip leadership with a complete picture of the strategic information necessary to make informed decisions.
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I've been surprised by the relatively limited use of the Balanced Scorecard among boards of directors. To me, the BSC and the board are a perfect fit. Why? Because the Balanced Scorecard gives the board a great "dashboard" to check in on corporate and CEO performance.
With the recent push for greater transparency and greater accountability for boards, the value of the Balanced Scorecard is even greater. It's no longer acceptable to join a board, take a few great boondoggles a year, and rubberstamp the CEO's decision. Institutional investors, activist investors, and employees all now look to the board as the owner's representatives.
So what do you need to know as the owner's rep? The financials, of course, but you also need to know much more -- are customers happy and growing? -- are operations running smoothly? -- is the employee base satisfied and productive. Exactly the things that the Balanced Scorecard was designed to report on.
The strategy map is also a great tool to help the CEO communicate to the board about the strategy and the performance of the organization against that strategy. Instead of a thick binder filled with conjecture and footnotes, the strategy map is a one-page view that articulates the strategy in a clear cause and effect fashion that even board members can understand!
If you're currently using the BSC to manage your board (or vice-versa), please let us know -- we'd love to learn more. Or if you're interested in learning more about how the BSC and ESM can help make your board or CEO more productive, please don't hesitate to reach out!
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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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In my work supporting the strategic reporting process, the most frequent questions that arise involve the setting of status indictors for objectives, particularly those with multiple measures. While at face value these are seemingly innocent questions, what I have observed is that underlying each is the desire to "Game the System" or display positive results when in reality quantitative data shows otherwise. Below are a few of questions that have been common among organizations implementing performance management systems.
- We are below target for the first time in four months and this is just an odd blip. Do we really have to indicate a status of "Caution" or can we just ignore this one time instance?
- If we have three measures supporting an objective and two are green (on-track) and one is red (well below target), aren't we really green since the red measure is one we didn't really like anyway?
- Our results indicate we our in the caution zone, but I don't think the target accurately reflects the business environment, so can't I override the system generated status to green?
While organizations have answered these questions with a wide range of responses, I caution any deviance from the actual facts, particularly given the reality that eventually the truth catches up with you and it is better to act swiftly when small issues arise, then be left to put out large fires when issues explode. More importantly, these types of triggers bring attention to exactly the type of issues and events that performance management frameworks seek to identify. Simply put, to ignore the reality of business results defeats the purpose of implementing a data driven, fact-based management framework.
As much as we would like to think otherwise, there is no guarantee that this month/quarter is merely a one time deviation from the norm and not the beginning of a new trend, nor should data be ignored simply because the results are no positive. Rather, these findings highlight potential issues within strategic business drivers and should be part of the executive discussion as they require leadership consensus and intervention. While I do not advocate an approach that only examines short-comings and continually brow-beats leadership for lagging performance, effective management and decision making requires the cold hard facts - good, bad or indifferent. While you may be able to escape reality for a while, eventually it will catch up with and unfortunately when it does, it is usually not kind.
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Building out initiatives without allocating a strategic budget is like financing a brand new Porsche GT3
and not having the pocket change to fill it up with gas. Organizations do this all the time. They go through the "fun" period of building out their objectives, drawing a fancy strategy map, allocating measures to report on those objectives, but wonder why their performance hasn't improved significantly.
Hey, you might have a heavy foot with that new Porsche of yours, but you aint going no where without the gas. It may look great parked in front of your house, but will those wheels actually move? That Strategy Map of yours might look pretty, but it won't get you anywhere without the proper resources.
I'm currently at Palladium's Global Public Sector Summit, and this morning I sat in on an initiative management clinic. This morning we discussed the four key aspects to initiative management: 1. Setting your Initiative framework; 2. Collecting, Rationalizing and Selecting Initiatives; 3. Funding, Planning and Tracking Initiatives; 4. Establishing the Initiative Governance Process.
I'm assuming that most of you have in some way or other completed Steps 1 and 2. Unfortunately, Step 3 sometimes gets overlooked causing the entire program to collapse. It is imperative that you analyze each of your initiatives cost benefits and align them with your short and long term organizational goals. As you do this, can should also distinguish the "Boulder's from the Pebble's". Determine which initiatives require the most manpower to get rolling, and alternatively which ones merely require someone to just bend down and pick them up. This will give you the right scope of your program.
Now you might be asking, ok, sounds great, but how do I actually track these programs and their budget? Well, this is where Executive Strategy Manager (ESM) 4.5 release comes into play. Client Administrators can now build calculated fields allowing users to easily track all of their budgets for their strategic themes and initiatives. Once you create these calculated fields, you can very easily allocate specific budgets for each initiative, and allow Initiative Sponsors to update the actual "spend" on each program. Furthermore, due to the enhanced layout functionalities, you can build custom layouts that show the strategy execution budget for your entire initiative program. Please contact your client administrator if you would like more information on building calculated fields.
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We are in our eighth year of helping organizations manage their BSC programs with software, and in that time, our application has grown from a scorecard design software to an integrated strategy management platform. We are also pleased to say that we now have 1,000 scorecards being managed in the application today
Back in 2000, the tool was known as the Design Center, and it had only a step-by-step guide to helping companies build and cascade scorecards. An organization would use the tool for 3 months and then export all the information from it to PowerPoint. Some of this legacy remains and is still very powerful. Our clients still use the step-by-step approach and embedded coaching of the Design Center. They also still appreciate the ability to export to PowerPoint. Both of these features have grown in a tremendous way over the last few years.
Methodology Support The original application had animated PowerPoint with synchronized audio that explained each of the steps in constructing a good scorecard. It also had paragraphs of text that explained the methodology behind the activity. These were great, I mean they are great, and are still used in the Design Center section of the ESM. Today, the application links to the Best Practice Library, which is full text searchable and has over 1200 assets. You can view conference presentations, read articles, find Hall of Fame cases, strategy maps, and executive interviews. You can search by industry or by topic. The ability to leverage technology for best practices is highly valued by our clients.
Exporting Eight years ago, it was nice to export information to PowerPoint. Today, clients still like the feature. It is nice because you can provide a printed version of what you see on the screen in Meeting View. But, in the ESM, you can now customize every page in Meeting View. This would mean that you would need to create a new custom PowerPoint export each time. Now we have a greatly improved PDF export. You select the items from Meeting View as well as the custom pages, and it will export everything to PDF in landscape or portait mode--with hyperlinks between pages!!! Please check out this feature in Meeting View. You can find it on the Summary Page with two PDF icons.
So, we have come a long ways from a scorecard design tool, and now we have 1,000 scorecards being managed in our application. In my next post, I'll tell you more about how clients are leveraging the features of the ESM to execute their strategy.
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There have been a lot of major implementations of the Balanced Scorecard: US Army, Mobil, CIGNA, Petrobras, etc., but there's something really interesting going on down here in Brazil. More and more Brazilian government and non-governmentatl organizations are using the BSC to mobilize the transformation of their country.
CNI has developed a scorecard to help drive the economic development of the country. As Dave Norton notes, there have been some big scorecards, but this is the first time that a scorecard has been used to guide an entire economy.
Todos Pela Educacao is using the BSC to help reinvigorate the education sector in Brazil. A consortium of public sector, celebrity, and business leaders has come together to try to address the systemic issues with the educational system in Brazil.
Both of these BIG implementations (featured at the Latin American Summit in Rio) show that the Balanced Scorecard movement is alive (actually thriving) here in Brazil, and that organizations are pushing the envelope and using the four perspectives of the BSC to change their perspective.
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I was recently speaking to a colleague at an organization with whom I have worked with for a number of years. They are currently focusing on enhancing their initiative management process and utilize the ESM to support their corporate and business/support unit strategy management reporting process. During the conversation, he mentioned that each business/support unit has integrated their strategic initiatives into the quarterly strategy management report (SMR) and that the unit leaders have appreciated the additional insight and enrichment this component has added to their conversation.
Working with the corporate strategy group, my colleague was tasked to determine if the current initiative portfolio (encompassing both the ten corporate strategic initiatives and those initiatives identified as strategic at the business unit levels) would provide enough impact to successfully meet their annual corporate performance targets as outlined within their strategic objectives and measures. Imagining this could be a labor intensive process, my colleague phoned to see if I had any suggestions on where to start.
Before having the chance to respond, he outlined the steps he envisioned:
1. Build an Objective Linkage Report depicting the alignment of SBU (cascaded) objectives to corporate objectives
2. Build an Initiative Alignment Matrix for each SBU
3. Replace the SBU Objective with the appropriate SBU Initiative within the Objective Alignment Matrix to view the alignment of SBU initiatives to Corporate Objectives – thus creating an Initiative Linkage Report
4. Add the Corporate Initiatives to the Initiative Linkage Report
5. Add the status for each Corporate Objective to the newly modified report
6. Add the status for each SBU Initiative in the newly modified report
7. Print and review templates for any off-track corporate objectives and initiatives
8. Conduct analysis as appropriate
My concerned colleague then commented that by the time he builds the report he needed, he wouldn't have time to do any analysis.
Much to his surprise, I told him that Steps 1 through 6 were already done for him and that Step 7 would take no more than an hour. I then explained to my new best friend that because he had already created Corporate-SBU alignment within the ESM and the business unit core teams had mapped their initiatives to their respective objectives, all he needed to do was access Meeting View and navigate to the 'Alignment' tab, where he would find a copy of his 'Initiative Linkage Report'. To then create a template for any off-track Corporate Objectives or SBU initiatives he could simply click on that object and create a PDF export. Should he want an Excel file of the Initiative Linkage Report that can be found in the Document Library under the "On Demand Reports".
Glad to have made a call before heading down the wrong path, my colleague was able to save days of needless effort and was able to deliver a glowing report to organization's executive leadership – complete with supporting documentation available at the click of a button.
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With the space shuttle landing just a few hours ago, I decided I'd do a bit of research on the critical information the pilots need to be able to fly a shuttle and see how the ESM could support their endeavor.
I came across an article, titled "Factors Principles for Spacecraft Cockpits" by Jeffrey McCandless of the Space Shuttle Cockpit Council. McCandless reflects on cockpit gauge design and measures over time. He says that early designs included many gauges, even those needed only for a brief period in the mission, information was mostly text, not well consolidated and related items were not located next to each other. Astronauts had to memorize the gauges according to their number. Needless to say, the shuttle performance dashboard was not easy to read.
More recent cockpit features include multifunction electronic display systems, but the upgrades included copies of old displays. Herein lies the problem with most organizations, including NASA and the shuttle. Key strategic information needs to be consolidated, logically ordered, and be very visually pleasing so that data can be comprehended rapidly for effective decision making.
McCandless says, "Such displays should increase the crew's situational awareness, reduce workload, and improve performance." The ESM is structured so that every employee can have a personal dashboard with strategic themes, objectives, measures, initiatives pertinent to him or her at a point in time. Each strategic component contains visually appealing charts, roll over performance and recommendation summaries or Gantt charts to support rapid comprehension of the strategy and real time decision making.
And what organization wouldn't benefit from an interface that enables the leadership team and front line employees alike to have access to the right set of critical information required to ensure top performance?
Perhaps our next client should be NASA. Wouldn't it be cool to get the ESM loaded onto the shuttle? We could utilize data sourcing from their critical (and most likely) dispirit databases to ensure the right information is getting to the right people. If anyone has a contact at NASA, let me know.
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In today's data rich world, organizations are challenged to turn the information that resides in disparate systems across their enterprise into the knowledge that will enable them to not only stay in the race, but to win within a business environment dominated by volatility and growing competition. Driven by the reality of a globalizing world and fierce new competitors, corporate performance management (CPM) programs have emerged in organizations around the globe as the need for data driven, informed decisions has become critical to organizational success. Where real-time information to drive the daily decision making process was once a competitive advantage, today it is the minimum ante to be part of the market equation.
However, to succeed in today's business setting, there must be a balance between the actions required to obtain performance levels as defined by short-term metrics and targets and the organization's long-term strategic goals. Strategic and operational management must be aligned as short-term, defensive decisions can have dramatic impact on the ability to execute strategy over longer horizons (3 to 5 years). Unfortunately, in many cases the emergence of corporate performance management and the dashboards utilized to fulfill short-term data requirements has lead to the blurring of distinction between operational data to drive day-to-day decisions and the strategic information required to manage strategy, most commonly articulated by the Balanced Scorecard.
(While I will not go into detailed definitions of each within this post, I will provide a reference list of sources that clearly define and differentiate Balanced Scorecards from Performance Dashboards at its conclusion.) This inability to clearly understand the unique characteristics and attributes of a Balanced Scorecard versus a dashboard has lead to organizations believing they are either one in the same or worse, that both can not co-exist as they will duplicate reporting processes.
It is here where organizations that have made strategy execution a core competency have differentiated themselves from competitors. High performing organizations have been able to articulate the value of having aligned Balanced Scorecards and Performance Dashboards. Rather than view them as similar mechanisms or duplicated reports, these best in class organizations have distinguished not only the types of information displayed in each, but more importantly the types of decisions each is utilized to empower.
Organizations that have demonstrated the greatest alignment have implemented an underlying strategy management platform, such as the ESM, to integrate their disparate systems and data sources to enable a single view of key information required to support and analyze progress against strategic objectives to drive key decisions. This includes a balanced portfolio of measures across the Balanced Scorecard's four perspective, as well as key driver measures allowing for action oriented analysis are recommendations. Within this environment, CPM and BI-oriented tools are then utilized to provide operational results and statistics to enable day-to-day decision making in support of continuous improvement or mediation when operational outputs stray from desired results. Although still a newly emerging trend, true alignment has been experienced in a growing number of organizations who have been able to successfully understand the linkage and relationship between operational metrics and strategic measures. Rather than develop performance dashboards to articulate all possible operational data points, the focus becomes on those metrics which enable day-to-day decision making, but which support and drive the successful achievement of targets as defined by strategic KPIs within the Balanced Scorecard.
As your organization begins its journey of successfully aligning day-to-day operations with strategy execution, I would enjoy hearing your stories about the methodology implemented and the supporting applications utilized to support the display of both strategic measures and operational metrics.
Additional Resources:
"Scorecard or Dashboard: Does It Matter?", Neil Chandler, Gartner RAS Core Research
Performance Dashboards: Measuring, Monitoring, and Managing Your Business, Wayne W. Eckerson, John Wiley & Sons, Inc. 2006
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Many organizations spend literally months designing their ideal Balanced Scorecard and Strategy Map. Getting the map and scorecard right are important, but organizations that spend months endlessly tweaking the map and measures risk losing momentum and not getting the strategic results they were hoping for with the Balanced Scorecard.
Getting to your first Balanced Scorecard reporting meeting within 60 days (ideally even sooner) of starting your BSC project is critical to project success. Anecdotal evidence that I've seen over the years suggests that organizations that get to their first meeting within the 60 day window have a 60%+ greater chance of succeeding.
Why is this? The first, and most obvious reason, is simply "project fatigue." At the start of a project, excitement and enthusiasm is high, and people are engaged in the project. It's therefore critical to keep the momentum going and get to the first reporting meeting without taking a 4-6 week "break" after the strategy map workshop. Otherwise, the initial excitement of the project will have dissipated, and people will have forgotten why they're involved in the BSC project.
Another reason to get going quickly is that actually using the BSC in management meetings is the best way to tweak and improve your scorecard and map. During a real conversation about strategic issues, you'll quickly learn whether or not the map, objective, or measure is right. You'll also learn whether or not you have the right set of initiatives (and even the right people at the table!)
The final reason to get started within 60 days or less is that each day you continue to manage the old way is another day for your competitors to catch up with you and another day where you are not operating as a strategy-focused organization. You're implementing the Balanced Scorecard to transform your organization and to achieve breakthrough results – so why wait?
What does this all have to do with the Executive Strategy Manager? Well, the ESM is the only software available that fully supports the entire current Kaplan-Norton methodology for strategy execution. And since it's available as software as a service, you can sign up this morning and be up and running this afternoon – with no unnecessary software implementation delays or costs.
Interested in learning more? Contact us or leave a comment below. We'll be right back in touch.
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Reporting
|
Posted
8/17/07
@ 6:07 AM
by ESM Team ESM Team
