Return to site

5 ways a balanced scorecard can help you nail your business strategy

· Balanced scorecard,Business Strategy,IT transformation

“You can’t manage what you don’t control, and you can’t control what you don’t measure.” So said American author and software engineer Tom DeMarco, and at the risk of mangling our metaphors, we’ll add, “if you can’t measure it, you can’t improve it”.

Anyone who’s ever developed a business strategy for their organisation will likely be nodding in agreement about now. Many will have joined fellow executives and board members at annual company ‘strategy retreats’, somewhere exclusive and out of town, and helped create three, five or even ten-year strategies. Over ensuing months these strategies are finessed until they’re ready to be rolled out. Then, everyone sits back and waits for productivity and profits to soar.

Easy right? Wrong.

As vital as having a strategy is if you want to transform your business, experience shows that implementing the strategy will be far harder than coming up with it in the first place – just like running a marathon is much harder than telling people you’re going to run a marathon.

Despite so much time and expertise being invested in them, over half of all transformative business strategies never make it through the implementation phase. Why do so many strategic plans that look so good on paper go belly up? Is there a disconnect between those who develop them and those who implement them? And if so, how do we fix it?

First, let’s look at some common pitfalls that can derail your strategy.

  • Not linking the strategy to the budget.
  • Not explaining the strategy to your people so they know why it is needed, how it will affect them and what role they will play.
  • Not incentivising your strategy by attaching KPIs to the various measures so that your people are motivated to help deliver it.
  • Not communicating the key messages around organisational and process changes to keep your people informed, aligned and reassured.
  • And the biggest faux pas of all – not setting performance targets that align with your organisation’s vision and goals, and link each core initiative with the people and milestones that will bring your strategy to life.

According to leading planning and performance management firm On Strategy, “The strategic plan addresses the what and why of business activities, while implementation addresses the who, where, when, and how.”

This is where balanced scorecards really come to the fore because they tie all these crucial elements together in a visible and common-sense way that invites the workforce – who are an essential part of delivering it – along on the journey.

Which brings us to the crux of our blog: Five ways that using a balanced scorecard can help you nail your business strategy.

  1. Balanced scorecards inherently drive innovation and efficiency because these are built into the performance targets.
  2. They offer a holistic solution that meets business needs by measuring performance in four key areas: customer-centricity, internal processes, innovation and organisational efficiency.
  3. They are a visual tool that convey insights in an easily digested ‘plan-on-a-page’ format that can be displayed online, on noticeboards and in other locations where staff congregate.
  4. Balanced scorecards ensure everyone from managers to graduates knows what actions are required and the metrics that sit behind them, as well as their own role in helping to achieve it.
  5. They communicate the business strategy to all stakeholders – and show why it matters.

“If you don’t make what’s important visible, how can you expect people to succeed?” - Carl Duckinson, TACT Non-Executive Director

If only everything in life was that simple!

Did you enjoy this post?

If so, please follow us on LinkedIn, thank you.

All Posts
×

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OKSubscriptions powered by Strikingly