10 questions to Balanced Scorecard Expert Jeroen De Flander, author of Strategy Execution Heroes and director at The Performance Factory and director at The Performance Factory and Chairman of The Institute for Strategy Execution.
Key interview quotes:
- The concept however should be adapted to the needs of the organization. You don’t need a canon to kill a fly.
- If there is too much focus on the measuring part and not enough on the strategy part, the scorecard becomes too administrative.
- In many cases, the ambition to automate the process is the positive driver at the start of a Strategy Execution upgrade programme but the bottleneck the year after.
- Postpone automation until you are 100 percent happy with the underlying process.
I have been working with the Balanced Scorecard right from the start in the ‘90 and implemented the technique in over 50 companies.
I used to be the responsible manager worldwide for the Balanced Scorecard product line for Arthur D. Little – a leading strategy consulting firm.
The concept however should be adapted to the needs of the organization. You don’t need a canon to kill a fly.
It’s a good idea to do some research to get a feeling for your organization’s particular situation. This will help you avoid some of the classic pitfalls.
Here’s my list of 8 typical mistakes you should avoid:
- Senior management is not convinced and shows little commitment
- The scorecard is developed by ‘the happy few’
- The internal/external project members have limited or only theoretical knowledge
- The scorecard is only used by top management
- The scorecard stays too long in the development stage before it’s launched and used
- There are not enough links to the strategy and planning processes
- The content of the Balanced Scorecard is unrealistic
- The scorecard is only used for remuneration purposes
Editor's note: As Jeroen suggests, it is a good idea to “do some research to get a feeling for your organization’s particular situation.” To make this research easier we compiled a checklist for Balanced Scorecard audit.
It’s also a process that helps managers and entrepreneurs translate an overall strategy into smaller chunks.
All too often, this is forgotten.
Also, if there is too much focus on the measuring part and not enough on the strategy part, the scorecard becomes too administrative.
The question today becomes much more:
- “What’s the best way to use the Balanced Scorecard in our organization.”
In many cases, the ambition to automate the process is the positive driver at the start of a Strategy Execution upgrade programme but the bottleneck the year after.
Let me give you an example.
Imagine that you want to automate part of the BSC process:
- You start by selecting a software package.
- You launch an expensive IT project to customise the solution.
- Nine months later, you receive many suggestions (and complaints) from managers regarding the user-friendliness of the software.
- After a closer look, you decide they are right and agree the underlying process needs to change. But that would demand, yet again, some quite extensive IT system changes.
- You find it inappropriate to launch a new IT project as the previous one was more expensive than anticipated. So you decide to wait.
I would suggest you either choose a standard software solution and change your process or postpone automation until you are 100 percent happy with the underlying process.
Editor's note: Following the topic raised by Jeroen, it makes sense to focus on the software packages that allow to try them before buy. At BSC Designer we provide a free plan for our cloud-based software.
So start with the overall execution approach and then see how a scorecard can add value within the total picture.
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Also Download two free chapters of Jeroen’s book – Strategy Execution Heroes at https://jeroen-de-flander.com/books/