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How does an organization avoid BSC burn out after they’ve been scorecarding non-stop for 5, 7, or 10+ years. This month I’m in the Middle East working with several clients who are in this predicament. I see it as a good problem to have. The organizations successfully adopted the Balanced Scorecard program and have achieved results with the initiative, but how long should it go on? Forever I say! But it doesn’t have to be your grandparent’s Balanced Scorecard. Innovate, innovate, and innovate some more.
1. Integrate new management approaches into the BSC program such as XPP, Six Sigma, Excellence, Quality, etc. If you’ve been at this for several years, chances are you’ve made adaptations to the methodology along the way to best fit your organization’s culture. So look at other approaches as a further adaptation of your strategy management effort. Experiment with others approaches to identify the “golden nuggets” that can be extracted from each to integrate into your Balanced Scorecard program. Simply because various management gurus invented these management concepts does not mean that each approach is mutually exclusive.
2. Mix up the strategy review meeting. I’ve seen teams change up theme, objective and measure ownership, perhaps even to where leaders report out on a piece of the scorecard that isn’t core to their business. While this approach takes some getting used to, innovative approaches to strategic challenges that arise often come from individuals who are one or two steps removed from that piece of the strategy.
3. A strategy refresh and overhaul is always a healthy step to maintaining a leading edge Balanced Scorecard system. While some objectives that are core to your business might be the same on your strategy map after 5 or 7 years, the rest should continue to evolve and change. The ESM team is hard at work with putting the finishing touches on ESM6, our newest build. We’ve incorporated mission, vision, values, SWOT, Porter’s Five Forces, PESTEL, and Change agenda to provide a healthy strategy refresh.
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Balanced Scorecard,
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Posted
9/24/12
@ 4:27 AM
by ESM Team ESM Team
In mid February Kent Smack, Director of Palladium Group, Inc.’s Executive Strategy Manager™ (ESM), and I traveled to Ghana to oversee ESM implementation and training at Vodafone Ghana. Historically Vodafone Ghana had been managing their strategy offline, but found the program lacking organization-wide energy and support. The leadership team and office of strategy management (OSM) recognized the need for leadership and employees alike to track objective performance through the use of measures, providing line of sight into their strategy across the organization. Likewise they recognized the inevitable connection between strategy communication and their internal culture. ESM became the missing piece in their puzzle, providing a forum to easily manage and communicate their strategy.
According to Doctors Kaplan and Norton, “Communication of mission, values, vision, and strategy is the first step in creating motivation among employees.” The strategy map and the BSC should be the first pieces communicated to clarify what the organization wants to accomplish and how it intends to realize its strategic outcomes. By allowing users to login to ESM, they have instant access to the enterprise strategy. Through the use of permissions, ESM can monitor the information each user has access to ensuring the appropriate strategic information is provided.
Let’s not stop there. I often hear Doctors Kaplan and Norton say, “Say it 7 times, 7 different ways;” leaving us with 6 more communication approaches to develop. At Vodafone we joked about having the strategy map taped to the bathroom stalls; but to be serious, it is this type of “in-your-face” exposure that drives the culture shift. As an organization Vodafone Ghana is working toward a culture of cross-departmental communication and visibility. In fact, while there we witnessed the kick-off promotion of a “Facebook” like network for Vodafone employees. This open door approach places strategy at the employees’ fingertips and more importantly conveys, “a commitment to performance and accountability, a focus on customer, and a relentless passion for continuous improvement, or creativity and innovation.”
As an ESM trainer, my goal is that by the end of the week the power users have the skills and “know-how” to begin working in ESM and are confident rolling-out the program using a “train-the-trainer” approach. As an organization, the success of the program will require an internal push. Executive buy-in, support from an OSM (office of strategy management), a clearly defined roll-out approach, and of course, a communication plan, are essential to the success and sustainability of strategy execution using the ESM.
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Alasdair Macnab, FCMA, CGMA, director of corporate services for the Royal Botanic Garden Edinburgh, has adapted the Balanced Scorecard to create a new way of measuring the HR and financial costs of meeting strategic objectives. In this article he shares how his innovative approach, coupled with the Executive Strategy Manager, enable strategic objective budgeting. The system he has built offers insight into the input costs for each objective on the scorecard which can then be juxtaposed with the achievement of the objectives, realized through the associated measure performance.
Read the article at: http://www.cgma.org/Magazine/Features/Pages/Strategic-Objective-Costing.aspx
Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
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Posted
2/8/12
@ 2:51 PM
by ESM Team ESM Team
Drs. Kaplan and Norton recently shared with us the future of the most powerful management concept of the past 75 years (according to Harvard Business School). As published in the CGMA inaugural issue a few days ago, the gurus lay out five key guidelines for this framework in the future:
1. Collaborate with external constituents, such as key suppliers, customers and alliance partners, to develop a strategy map that describes and communicates the strategic relationship; once developed, the map and scorecard are used to govern and guide the relationship.
2. Realize that cities and provinces, and even nations, around the world are using our framework for describing and communicating strategies for competitive advantage, and then successfully implementing their visions with our strategy execution system.
3. Use the strategy map as a jumping-off point for risk management, especially the identification and management of strategic risks.
4. Use the strategy map as a central change management tool.
5. Expand the role for analytics in the strategy execution system.
Read more at:
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Posted
2/8/12
@ 2:48 PM
by ESM Team ESM Team
Imagine your strategic elements (themes, objectives, measures, driver measures, initiatives, initiative KPIs, and milestones) as an alignment “web” or “family tree” through which there are causal relationships. While some of these relationships are close, say 50-75% of their performance feed into the next element’s performance, others are distant, and perhaps say only have a 3-5% impact on another element from the same scorecard or from a cascaded scorecard. If there were only a way to represent that impact that would be wicked cool.
Now there is. The team has completed the build out of the ESM6 automatic performance status indicator setting iteration. If you want to in ESM6, you can activate this capability to have milestones and initiative KPI performance feed into the overall initiative performance. Initiative performance can then feed up into objective level performance. Similarly, driver measure and cascaded measure performance can feed up into strategic measures from both a performance status indicator level and at the raw data level. Strategic measures, cascaded objectives, and initiative performance indicators can then feed up into objectives and finally, objectives into themes. The ESM team is getting ready to automate your performance status indicators. Are you? We look forward to sharing this new capability with you soon.
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It really is that simple. You need the right people engaged and supporting the cause within the organization, you need the process in place to ensure youa re taking the right steps in the strategy management framework, and you need to accelerate your time to results while making the effort sustainable through technology. I'll go over the role of each below.
A. People: Leadership
- Communicates vision, values, and mission to inspire the organization to perform
- Makes the case for change so the organization is dissatisfied with the status quo
- Clarifies the strategic intent to signal the direction in which the organization should move
- Build consensus in the management team to empower them to drive the strategy to results
- Lead by example to embody the kind of behaviors that others must adopt to succeed
B: Process: Office of Strategy Management (OSM)
- Makes strategy management a core competency within your organization to achieve results
· Coordinates cross-business processes to align businesses across the enterprise
· Ensures sustainability of the strategy management system—to survive churn at the top of the organization and adapt to changing economic environment
· Manages strategic risk factors that have strategic relevance
· Achieves strategic synergy across the enterprise
C: Infrastructure/Technology
- Develops common platforms and systems that enable effective integration of businesses
- Implements architecture and tools that automate performance management capabilities
- Cascades strategy maps and scorecards down to individuals to align the entire organization
- Captures and analysis data and information that enables better decision making
- Integrates the management process with technology to link strategy and operations
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Now that the Execution Premium book by Drs. Kaplan and Norton has been out in the market for a number of years, let's take a look at the benefits that can be realized through the XPP implementation in your organizaiton. Let's take it a couple stages at a time. Stage 1 and 2 looked at Develop the Strategy and Translate the Strategy, stages 3 and 4: Align the Organization with the Strategy and 4: Plan Operations. Now let's look at stages 5: Monitor and Learn and 6: Test and Adapt. In these last two stages, strategy becomes part of the fabric of the organization's management process and governance model right alongside operational review meetings. A business intelligence capability nees to be formalized and linked to the strategy. As part of testing the strategy, new insights should be shared, and strategic and operational processes can be altered to ensure maximum effectiveness. This feedback loop brings you back to strategy refresh, translation and alignment, thus closing the loop on the XPP management system. Some of the benefits realized in these final stages include:
STAGE 5: MONITOR AND LEARN
- Develops a BI competency center to assure accurate, timely data to improve decision making
- Develops an analytic information architecture to harness data, information, and insight
- Creates a governance process and calendar to manage strategy as a process that delivers results
- Conducts strategy and operational review meetings to ensure strategy execution is on track
STAGE 6: TEST AND ADAPT
- Confirms effectiveness of the strategy
- Models business and operational processes to optimize ability to execute the strategy
- Analyzes results in order to make necessary modifications to achieve performance outcomes. Provides direction on what is working and what needs improvement
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Posted
9/14/11
@ 3:42 PM
by ESM Team ESM Team
Now that the Execution Premium book by Drs. Kaplan and Norton has been out in the market for a number of years, let's take a look at the benefits that can be realized through the XPP implementation in your organizaiton. Let's take it a couple stages at a time. Stage 1 and 2 looked at Develop the Strategy and Translate the Strategy. Now let's look at stages 3 and 4: Align the Organization With the Strategy and 5: Plan Operations. In these stages, the strategy has been clarified with scorecards and strategy maps at the enterprise level so now they need to be cascaded down into the business and support areas to ensure vertical alignment. Individuals might employ personal Balanced Scorecards and development plans to link the performance review process with the strategy. A communication program around the strategy is also paramount. The organization can begin to link strategy to key processes, driver models, and dashboards. Rolling forecasts and dynamic resource allocation are often found around the operational planning step.
STAGE 3: ALIGN THE ORGANIZATION WITH THE STRATEGY
- Defines the corporate role so that organizational units receive strategic guidance & direction
- Cascades strategy maps and scorecards to ensure organizational alignment to the strategy
- Leverages synergies between corporate, SBU, shared services, and other units to ensure alignment
- Communicates the strategy so that everyone understands his/her role in executing it
- Aligns team and individual goals and incentives to ensure the behavioral changes required for success
STAGE 4: PLAN OPERATIONS
- Identifies critical processes required to execute the strategy
- Establishes cross-functional business teams to drive performance across organizational boundaries
- Develops rolling forecasts and dynamic resource allocation to link strategy and operations
- Implements driver based planning to identify the critical levers of performance
- Creates operational dashboards that identify the key performance indicators that drive performance
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM Development Team,
ESM Features,
ESM General Information,
ESM Tips and Tricks,
Initiative Management,
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Operational Reporting,
Personal Balanced Scorecard,
Reporting,
Risk Management,
Software as a Service,
Strategy Maps,
Sustainability
|
Posted
9/7/11
@ 2:25 PM
by ESM Team ESM Team
The Royal Botabic Garden Edinburg will be showcased as a public sector performance management solution implementation at the CIMA World Conference in October 2012 in Cape Town. Dr. Alasdair J Macnab captured it's organization's successes in a recent paper titled: Public Sector Performance: A Global Perspective.
The report looks at the specific performance challenges faced by public sectors, what lessons can be learnt from other countries or private sectors, and a specific strategic performance management solution.
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Now that the Execution Premium book by Drs. Kaplan and Norton has been out in the market for a number of years, let's take a look at the benefits that can be realized through the XPP implementation in your organizaiton. Let's take it a couple stages at a time. Stage 1 and 2 of 6: Develop the Strategy and Translate the Strategy. These stages are where the organization performs S.W.O.T. analysis, Gap and shift statements, identifies key overarching strategies, clarifies the mission and vision and key risks. Then the strategy is developed into Balanced Scorecards and strategy maps. Typically an Office of Strategy Management (OSM) or other like group/individual is tapped to manage the strategy implementation and execution.
STAGE 1: DEVELOP THE STRATEGY
- Defines how shareholder value will be created to achieve new levels of performance
- Identifies required changes from current to future state so the organization understands it
- Quantifies vision, values, mission, objectives, and risks so they are measurable
- Analyzes strengths, weaknesses, opportunities, and threats to determine course of action
- Formulates strategy so that the entire organization can execute it
STAGE 2: TRANSLATE THE STRATEGY
- Clarifies strategy with a strategy map to produce a one-page action plan that works
- Develops a Balanced Scorecard to specify objectives, targets, measures, and initiatives
- Identifies key risk indicators that must be managed to avoid failure to execute
- Focuses on initiatives with the greatest impact to accelerate time to results
- Allocates resources dynamically to produce the most effective outcomes
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
ESM Features,
Initiative Management,
Innovation,
Operational Reporting,
Personal Balanced Scorecard,
Reporting,
Strategy Maps,
Sustainability
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Posted
8/31/11
@ 3:19 PM
by ESM Team ESM Team
Key to an organization’s success in innovation is the ability to adopt and sustain ideas. In the second part of this innovation series, Cassandra Frangos, Ed.D, Director, Cisco Center for Collaborative Leadership, illustrates a best practice organization that drives an innovative culture through knowledge sharing, develops future innovators through a development talent management program, and successfully moves ideas to delivery through a modern organizational structure. In doing so, she provides practices in the in the form of objectives that fuel an integrated approach of culture, talent management, and organizational structure.
Link people through social networks and other Wed 2.0 tools - Sharing knowledge allows individuals to deepen their understanding around what makes sense and what will work. An internal social network is one approach to provide an easily accessible informal forum to discuss ideas. New Zealand’s Kiwibank, a 2009 Palladium Hall of Fame Winner, has achieved great success using a private network within Palladium’s Execution Premium Community (XPC).
According to Frangos, only about 5% to 10% of high-potential leaders have the skills needed to become innovators. Thus, identifying potential innovators and grooming them for sustained growth can be a difficult task. Creating a talent management program as outlined below will support and uphold innovation.
- Give potential innovators the right assignments.
- Take promising innovators out of the formal organizational chart.
- Give future innovators opportunities to gain precious commercialization insights.
- Provide mentoring.
- Develop potential innovators soft skills.
To deliver and to continue deliver an idea an organization must be dynamic enough to move it from its home team into new areas in the organization with other contributing resources.
- Create stand alone growth units.
- Manage stand-alone units through cross-unit links.
Innovation is a result of a three phase approach: generating ideas, moving them toward reality, and adopting them for the long term. For more information on the 3rd phase, adoption, read the full BSR article in ESM, navigate to Resources > Libraries.
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Judging from recent interviews and articles, it appears Balanced Scorecard co-creator Bob Kaplan’s new favorite case study is Volkswagen Brazil. In particular, he is impressed with the company's ability to communicate strategy to its 22,000 employees.
Kaplan is particularly charmed by a Volkswagen robot that roams the corporate premises and “talks” to employees about strategy. Giga, who has the face of a VW Beetle’s hood and wheels as feet, makes star appearances at employee gatherings and also shows up in comic strips to affirm strategic goals for employees.
This thoughtful and creative approach to strategy communications humanizes the idea of strategy, makes it fun and accessible, and gets people talking about it. It has also contributed to a cultural change inside the company, which, in turn, enabled a major financial turnaround.
For companies that can't afford to build a robot, there is a less expensive and more interactive approach available—if interactivity is measured by the vibrancy of human-to-human, rather than human-to-robot, dialogue. With the right selection of social media tools, you can leverage your corporate intranet (or a 3rd party platform) and raise strategy communications to a whole new level. Let’s look at some of the more common social media tools to see how they can be used in the strategy communication process:
Blogs… for Strategy Execution
According to Wikipedia, “Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video.” If the purpose of your strategy communication intranet is to communicate strategy, you don’t want to let every employee blog on it (just as you wouldn’t let every employee on stage at a company meeting to discuss strategy). Only your CEO and other executives responsible for communicating strategic objectives should launch a blog series under the banner of strategy communications. Depending on how “young-at-heart” your executives are, they may create and post the blogs themselves. More likely, your communications department will manage the operations of the blog. For example, if an executive is more comfortable speaking than writing, your communication team can film him and post the video entries as a video blog.
Online Discussions…for Strategy Execution
Company employees can comment on executive blogs, but the primary purpose of the strategy blog is for leaders to broadcast the message to the field. An online discussion forum is different. Discussion forums are inherently a more democratic, interactive form of exchange. There is an expectation that the person who begins the discussion will carefully listen to responses and continue to engage as the discussion unfolds. The best discussions begin with an honest question and an appeal for help. These forum discussions are the perfect complement to a more structured application for Balanced Scorecard creation and control.
Private Groups Collaboration…for Strategy Execution
You might not be ready to communicate the strategy to the entire organization. For example, Scott Nadler describes ERM’s strategic communication program in stages, starting with a private discussion between a dozen executive insiders, then to a group of 40, and finally to all 3,000 at the company. The access rights to your online collaboration space should mirror this off-line reality. For example, you might choose to launch a private group for the 40 people inside your own intranet or as a private subgroup in a more public community such as Palladium XPC.
In summary, you have a great new set of inexpensive social tools to help you communicate strategy. If they are deployed carelessly, they will be a waste of time and a distraction. However, with the right matching of specific social tools and oversight to keep the discussions focused, you will find an effective new communication program. This channel will only become more powerful – even transformative -- as more “digital natives” come into the organization.
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Several of our product experts recently returned from Palladium’s 2010 Americas Summit, held this year in La Jolla, CA. It was a great conference – strong attendance, great speakers, and considerable insight to be gained from both the case studies presented, and personal conversation.
As our experts provided attendees with live demos, they recount numerous occurrences of present clients passing by, and joining in to offer first-hand testimonials. Thanks to them, and to all of you, for being such being such strong proponents of ESM. Hearing the stories of your successes is valuable to those looking for more information, and also makes us truly proud to be a supporting part of your strategy management programs.
Recurrent obstacles identified by attendees we spoke with included 1) employee engagement and 2) effective communication of strategy and strategic performance. As indicated in the third step of the XPP, Alignment requires organizations to align business units AND employees alike to the strategy. In doing so, they often times overlook the most critical component of alignment– communication. Communication is paramount in a Strategy-Focused Organization to develop buy-in and commitment to the strategy at an individual level.
Over the last decade, ESM has made addressing this commonly shared weakness a priority. In continually improving the product to support evolving need, two new features were released this month: a second generation release of ESM’s Personal Balanced Scorecard component – PBSC 2.0, as well as a capability for integrating ESM with SharePoint.
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Despite its value, most organizations' written, objective-level performance analysis is generally not very good. Most performance analysis does not explain the data, discuss its underlying causes and implications, or integrate it into a broader discussion of strategic performance and environmental trends. My recent reading of strategy review reports of a handful of Palladium Balanced Scorecard Hall of Fame for Executing Strategy® organizations proved to me that even exemplars of strategy execution sometimes fall short in their written performance analysis, thus missing valuable opportunities.
Fortunately, this problem can be remedied. Writing insightful, actionable performance analysis is a skill that can be learned. Through Palladium's work guiding dozens of organizations in strategy reporting, we've identified several common pitfalls in performance analysis that performance analysis writers need to learn to avoid.
Pitfall 1: Focusing Only on the Measure Data, without Explaining or Interpreting
Often, performance analysis merely regurgitates what the data already show, or simply explains the components of the corresponding measure(s). What good does that do? Analysis writers need to dig deeper for more contextual data that might explain the performance. What is the reason for the last period's measure performance? How do we explain any period to period trends? What does the measure's outcome tell you about the performance of its corresponding objective?
Pitfall #2: Omitting Qualitative Information
Numbers are concrete, and objective, and therefore make people more comfortable and confident. But they don't tell the whole story. And they can indeed mislead, whether inadvertently or not (think of all the ways statistics can be presented to support any side of an argument). Qualitative information can often reveal the reasons behind the numbers better than the deepest dive into the detailed data can. It would seem self-evident that qualitative information is a critical element for understanding what drives performance. Yet far too often, such information is absent in written analysis.
Pitfall #3: Ignoring the Reasons for the Performance Result
Sometimes all the analysis in the world won't yield a definitive explanation for a performance result. Yet even when there is no certain answer, it is always better to offer a hypothesis than to forgo explanation altogether. For decision makers, there is little that is more unsatisfying than to ask “Why” and be told “I have no idea.” Offering a thoughtful educated guess will at least get the conversation started.
Pitfall #4: Avoiding Any Discussion of Risk
No one likes to be the messenger of bad news, but addressing risk openly and accurately is the key to avoiding unexpected declines in performance and greater risk. Even in our age of heightened risk awareness, risk and strategy are still often viewed as separate areas, one involving all that could go wrong, and the other, all that an organization hopes for. In reality, the two are inextricably linked. The strategy represents a hypothesis of the way the business operates and what activities are crucial to attain the ultimate desired outcome. Each strategic objective is achieved by successfully managing its performance drivers. Since it's a given that there are specific risks that can impede each performance driver; why would such risks not be part of the strategic conversation?
Pitfall #5: Focusing on Details at the Expense of the Bigger Picture
For any number of reasons, performance analysis writers often delve into one aspect of an objective’s performance, overlooking the objective-level view. In fact, it is not uncommon for performance analysis to not even indicate whether the objective is being achieved. Writers must step back from all of the quantitative and qualitative data they have collected and approach objective-level performance analysis by first drafting a summary statement about the objective's overall performance.
To read the full length article, log into the ESM, select Resources: Libraries: BSR: Complete Issues: and select the following issues.
David McMillan, “Five Pitfalls of Writing Performance Analysis,” Balanced Scorecard Report, November – December 2010
…or…
David McMillan, with Barnaby Donlon, “How to Write Performance Analysis That Truly Enhances Decision Making,” Balanced Scorecard Report, November – December 2008
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I just came across an excellent account of the Balanced Scorecard effort undergone at the Royal Botanic Garden Edinburgh. In this paper, BSC champion and strategy director, Alasdair Macnab, along with Chris Carr and Falconer Michell from University of Edinburgh tell the implementation story. They focus their research on how the Balanced Scorecard approach can be successfully adopted for nonprofit businesses. The team also reviews why the Executive Strategy Manager was selected as the preferred solution and how it streamlined the data reporting and presentation while providing leadership and employees froma cross the organization critical line of sight into the strategy.
Key findings cited from the paper include:
Just as strategies are specific to an organisation, the balanced scorecard (BSC)/strategy map can and should be adapted to suit an individual organisation to leverage the full power of the BSC system.
• The effort and commitment required from senior management involved in transforming strategy management processes should not be underestimated as individuals/departments will become more accountable for their actions, particularly in the public sector, and resistance to change may be experienced as a consequence.
• If an effective costing system is developed, such as the one described in this report, management will see how their staff are directing their efforts, particularly important in knowledge based organisations.
• With their intimate knowledge of the organisation, the management accountant is well placed to become very involved or direct the transformation process to manage strategy execution leading to improved effectiveness/profitability of the organisation. In this way the management accountant becomes more of a strategic partner to the business.
• The research relates primarily to the practitioner who should find it helpful as the work is based on research subject to academic rigour but is translated into a pragmatic approach via the case study; thereby demonstrating its usefulness to a real organisation.
See:” Implementation of the balanced scorecard and an alternative costing system at the Royal Botanic Garden Edinburgh,” available at the following link:
Access the full report here
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM Development Team,
ESM Features,
ESM General Information,
ESM Tips and Tricks,
Initiative Management,
Operational Reporting,
Reporting,
Risk Management,
Software as a Service,
Strategy Maps,
Sustainability
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Posted
7/22/10
@ 11:43 AM
by ESM Team ESM Team
Congratulations to Abu Dhabi Government with their induction into the BSC Hall of Fame for Executing Strategy on May 20, 2010 at the EMEA Summit in Madrid. This organization has been using ESM's eLearning for building and managing with the Balanced Scorecard for over two years.
Abu Dhabi is the largest of the seven emirates that comprise the United Arab Emirates (UAE), as well as its rapidly growing capital city. The emirate is ruled by the UAE president. Abu Dhabi’s Vision 2030 is to create a confidant, secure society; build a sustainable, open, and globally competitive economy; and to become one of the five top governments in the world. A unified strategy execution framework for the whole of government was chosen to translate the vision into action and outcomes. Investments are rationalized and prioritized on the basis of their ability to deliver results in social and environmental sustainability, a knowledge-based economy, human capital, infrastructure, and government excellence. Agency performance contracts help ensure a focus on strategic objectives. Within two years, GDP increased 30%, growth accelerated 74%, trade surged 156%, customer satisfaction increased 33%, and the number of Emirati women in the workforce grew 35%. “Based on the adoption of the BSC and our achievements, we have become a strategy-focused government,” says His Excellency Mohammed Ahmad Al Bowardi, Secretary-General of the Executive Council. “The structured framework of the Kaplan-Norton approach has established the basis for cross-government alignment, transparency, and accountability.” For Abu Dhabi, the road ahead is paved with success.
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Congratulations to Folkhälsan on their induction into the Balanced Scorecard Hall of Fame for Executing Strategy at the EMEA Summit in Madrid on May 19, 2010.
Folkhälsan is a non-governmental organization providing social welfare and healthcare services in the Swedish-language regions of Finland. This NGO has 1,500 employees serving 17,000 people through outpatient clinics, day care centers, rehabilitation units, and elderly care facilities. Known for the quality of its care, it has leading programs in preventive medicine and genetics research. Increasing competition from lower cost providers, however, caused Folkhälsan to reassess how they could continue to provide competence, commitment, and care at levels their members had come to expect. They needed a new way to manage, and in 2004 adopted the BSC to clarify strategy, drive performance, and optimize data. They have learned to excel at reporting, which has improved their ability to make timely decisions. Membership growth is up 10%, revenues have increased 20%, and great-place-to-work rankings and employee trust scores have improved four basis points. “Our growth has not been achieved at the expense of quality,” says Stefan Mutanen, Folkhälsan CEO. “Our management system helps up pay attention to what’s really important, align our business lines and operating units, and—with the help of the strategy map and BSC compass, identify and improve the critical steps and processes necessary to achieve our vision.” As a result, Folkhälsan is two steps ahead.
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Captain Earl Armbruster: You almost tore that boy's arm off!
Action Jackson: So? He had a spare.
As a Palladium consultant helping clients implement the Balanced Scorecard, I've had my share of meetings where I've felt like my arm was being torn off. And the next three hours seemed like one of those meetings. I booted up my laptop, straightened my tie, and said to myself "How would Action Jackson handle this?"
We were preparing for an upcoming Strategy Review Meeting and the day's agenda including reviewing over 70 measures with the reporting team. While this activity was necessary, and part of our methodology, I was not looking forward to the additional work I knew the meeting would generate.
I was going to use ESM to step through each measure, review the graphs, and look for common mistakes like missing titles, incorrect axis labels, and confusing color schemes. My plan was to write each discrepancy in my notebook and spend the evening in my hotel room transcribing the notes, sending individual emails to the reporting team, and creating a simple spreadsheet to track the follow-up activities. If I was lucky, and the mistakes were limited, I might be able to skip dinner and finish before midnight.
Fortunately, our ESM Consultant was onsite to assist. She introduced me to a new feature in ESM – Action Items – that not only made the meeting run better but gave me enough time to eat dinner and get a good night's sleep.
Action Items are automated reminders, or "ticklers," accessible from the Meeting View screens. Clicking the "Add Action Item" icon brings up a window allowing you to create an action item associated with a particular measure, objective, or initiative. The template can be completed quickly, and is automatically associated with the owner of the component. When that owner logs into ESM, the Action Items are displayed on his or her dashboard along with the relevant due-dates.
We used this feature extensively throughout the review meeting; capturing specific follow-up items quickly and easily with no need for reminder emails. Accountability was improved; there was no longer the excuse of "I didn't get your email..." The resulting list of Action Items can even be sorted, to help with project management tracking.
The team completed their action items and the review meeting went exceptionally well. Chalk up another time-saving ESM success!
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After the first day of ESM training in Nairobi, Kenya, I turned to my new colleague and hesitantly confessed. "You know, when I first heard I would be coming to a company called 'Safaricom,'..."
She turned to me with a knowing smile. "A safari is not just a holiday to witness the glory of the wild; it is also a journey." She continued, "Safaricom accompanies its customers on their life's journey with mobile services anytime and anywhere."
Her words were perfectly chosen, yet did not sound rehearsed. Instead, they captured the passion I heard for the company's vision; a vision that incorporates Safaricom's goals with a rich metaphor for African culture.
And I heard this passion – consistently – from everyone I spoke to on my trip.
With such consistent passion across the organization, it's no wonder that Safaricom, Kenya's leading mobile operator, has been one of Africa's great success stories. They are the biggest company in East Africa, with a six hundred-fold growth rate and a market share of 80%. This 80% figure is incredible; Safaricom's subscriber base grew from 20,000 to 12 million between 2000 and 2008.
They have been successful but realize that continued success is truly a journey. And to help them on that journey, they've adopted the Balanced Scorecard approach to prioritize their activities and ensure sustainability of their growth into the future.
The Safaricom leadership team realized that the passion behind their vision statement, so prevalent throughout the company, was a huge asset that could be leveraged as they deployed their strategy. And they were determined to make this deployment consistent and accurate throughout the organization. They realized that a strong framework, like the Balanced Scorecard, coupled with an effective tool, like ESM, would give them the vehicle they needed for this important journey.
I enjoyed working with the Safaricom team and shared best-practices in three areas: strategic messaging, actionable movement, and ongoing motivation. Or, more simply: >> Get the message across >> Make it happen >> Keep it going
To provide a Kilimanjaro-level overview:
Strategic Messaging: The ESM serves as a feedback mechanism, reporting on the carefully-selected components that reflect the strategic intent of the executive team. Everyone in the organization – from front-line workers up to the executives – can answer the question "How are we doing on what's important?"
The ESM helps answer this question by providing access to everyone in the organization. Employees have read-only access to the strategy and the objectives, while Scorecard owners can actively update the performance of their initiatives, measures, objectives, and themes.
Actionable Movement: Knowing the strategy is one thing; to ensure the journey is successful Safaricom must not only monitor the dials, but move the dials on their scorecard. The ESM facilitates the analysis necessary to achieve this movement and enables ongoing understanding of the activities required to align the work and attain the goals.
One especially-useful function within ESM is Action Items. Action Items can be used as a tracking device to ensure that commitments made in strategy review meetings are kept and that progress is taking place. The use of Action Items dramatically improves meeting productivity by empowering individuals to capture, distribute, archive, and manage all information associated with meetings. ESM allows users to easily assign and track Action Items.
Ongoing Motivation: Strategy review meetings provide the opportunity to assess progress, and the ESM can be used to ensure that action occurs between meetings. But it's important to maintain that progress on a continual basis – keeping everyone in the company motivated and aligned with the long-term goals.
Two ESM features can help maintain this motivation by maximizing the engagement of all Safaricom personnel. The Alignment tab shows how every aspect of the strategy aligns to other things within the organization. This is a powerful, visual way for everyone to see how their work impacts others, and forces accountability for overall performance. And Personal Balanced Scorecards drive the strategy down to the individual level, allowing everyone to know exactly how their daily jobs affect and contribute to the success of the company.
An African proverb states "For tomorrow belongs to the people who prepare for it today." Safaricom is actively preparing for their journey to tomorrow, and it should be a successful one.
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We finished up our client upgrade and training of ESM in Jakarta and were blown away by the internal passion around the BSC process and ESM to facilitate their strategy design and meeting management. Hundreds of internal users turned up for the ESM 5 training. In these standing room only sessions, there was a passion and energy around the new version of the ESM.
The client has broken their users up into client administrators, with a client administrator sitting within each key business area and end users, which exist throughout the organization. Although the ESM is user friendly for those of us who are not computer wizards, selecting "power" client administrator users within each scorecard is a best practice approach, especially when support and guidance is required by end users. I appreciated the visual communication elements around the client's offices. Scorecard and strategy map posters were located in entry ways, elevators, even bathrooms! This is how organizations need to communicate their strategy. While the ESM application is their main communication vehicle, supporting visual materials only reinforces the process. After a quick overnight flight to Sydney, we are speaking with delegates today around their scorecarding program. I've found that many of the delegates are just getting started with developing their scorecards and maps. I appreciate the enthusiasm that's generated at these summits. Delegates walk away with a "let's do it" attitude. Welcome to the scorecarding world!
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