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June, 2005

Making Scorecards Actionable Newsletter # 15 (2005)

Content of Making Scorecards Actionable Newsletter # 15 (2005)

» PH. D. COURSE BY PROFESSOR OLVE AND DR. PETRI
» INTERNATIONAL INTEREST IN SWEDISH SURVEY ON BSC UTILIZATION
» SCORECARDS IN RUSSIA (BY NILS-GÖRAN OLVE)



PH. D. COURSE BY PROFESSOR OLVE AND DR. PETRI

During the fall of 2005 professor Nils-Göran Olve and Dr. Carl-Johan Petri will run a ph. d.-course on non-financial information in management control systems at Linköping University. The course is open to all ph. d. students interested in theory and practice on the topic of management control, in particular the trend towards more integration of non-financial performance indicators in the performance planning and monitoring. The course is laid out as a series of five seminars, in which a repertoire of scientific articles of relevance will be read and discussed. Each student is also required to write a short paper on a topic of interest, relating to the theme of the course.

For more information about the course (in Swedish), please visit: http://www.ida.liu.se/edu/grad/course/215/



INTERNATIONAL INTEREST IN SWEDISH SURVEY ON BSC UTILIZATION

Our investigation on utilization of balanced scorecards in Sweden, has attracted a lot of international interest. Scholars in various counties plan to replicate the study to enable comparison betweens utilization in different countries. One such area of interest is the number of perspectives used in Scandinavian scorecards and scorecards from other countries. For example the use of a specific employee perspective seems to be far more common in Swedish implementations, than in most other countries.

Further on, it is interesting to note the overall satisfaction with the concept in various countries. Our study’s result shows a high satisfaction rate (84 % claming to be satisfied with their implementations, and even 90 % of the users claiming to continue their utilization), which is similar to the scoring in Bain&Co’s study on the satisfaction with different management tools.

We encourage scholars in different countries to contact us, if you are interested in replicating our study in your country, to be able to compare similarities and differences between our countries.



SCORECARDS IN RUSSIA (BY NILS-GÖRAN OLVE)

I had been to Moscow once before, 15 years ago. Travelling from the airport my first impression was that the numbness I remembered from that visit had been replaced by frenzy. Then, the four- or five-lane avenues still seemed to wait, half-empty, for the next political parade. Now they were teeming with cars. Even in central Moscow the speed on inner lanes exceeded 100 km p h. It all seemed symbolic of how a slow-moving, centrally directed society had given way to free-for-all competition. That impression was reinforced by the number of well-dressed visitors in all the new coffee shops, and the most elegant (and expensive) shopping galleries I have seen anywhere. In New York or Paris they come mixed with more affordable shops, but I saw remarkably few in Moscow. I kept wondering where the ‘ordinary’ citizens were.

Reading in local (English-language) newspapers about the last stages of the Khodorovsky trial I was of course reminded that there are limits to “free-for-all”. But somehow the changed aspect of the roads is symbolic for the fast pace, the individualism and the dangers of the new Russian society. It results in a society that is extremely difficult for a visitor to say anything meaningful about. Add to this the language barrier, which is worse than elsewhere as most of us barely can read the signs. On my previous visit, I remember feeling extremely foreign and uncomprehending. I still do, although so much has changed – at least on the surface.

I was invited by Intalev (www.intalev.ru), a Russian consultancy organising a conference about balanced scorecards. They have been active in producing the new Russian version of Making scorecards actionable (“Balans mezhdu strategiey i kontrolem”, Piter 2005), and they have also developed BSC software for the Russian market. The conference included presentations about Russian scorecard projects, and we have already received e-mails from readers of the new Russian edition of our book as far away as Irkutsk.
BSC is a format for communicating about strategy, which means that it is not connected with any particular industry, organisation, or form of ownership. Still I could not help being curious about its applicability to New Russia. Is there an interest in discussing business models and strategy amid the uncertainties and frenzy of contemporary Russian life?

My hosts saw some problems. Many owners have a very short-term and cash-focussed view of their firms. Patient building of capabilities for the future does not always come naturally when the pace is high and many uncertainties still exist.

On the other hand, some Intalev consultants told me about using strategy maps and scorecards to ‘teach’ top executives and board members about the business logic of their firms. A moment’s thought of course tells us that communicating about strategy should have high priority in Russian business. When any kind of business is high-risk, the need to discuss what strategic bets you are making is higher than ever!

Another aspect of scorecard use in Russia which I hope some day to learn more about is who should use them. Some foreign managers claim that there is a heritage from earlier days in the way employees and mid-level managers expect their bosses to behave. Superiors are expected to be authoritarian, and employees are expected to obey orders without bothering to understand or assume any responsibility. Scorecards are about communication, so if this is so there may be an uncomprehending reaction if they are introduced at lower levels in organisations.

During my visit, I was not able to judge if this western view of Russian organisations is correct, or if scorecard practitioners in Russia had tried to use scorecards below the highest echelons of management. Among the vast number of people in Russia there will of course be a sufficient number of employees willing to engage in their companies, not just seeing themselves as hired hands obeying orders, but expecting to get involved in the intentions and rationale behind their tasks. Like in all conferences where we have discussed elsewhere in Europe, my Moscow friends were eager to discuss possible differences between the original US conception of scorecard control and our Northern European experiences.

So my few days in Moscow left me with many strong impressions, but an equal number of questions about what we could call a contingency theory for the use of strategy maps and scorecards in differing business situations. Agreeing on shared expectations and strategic bets is of course at least as important in rapidly changing society like Russia as it is in our more slow-moving countries. It will be fascinating to see how enthusiasts like my new friends at Intalev will be able to adapt BSC to this!

/Nils-Göran Olve





MAKING SCORECARDS ACTIONABLE NEWSLETTER is a bi-monthly update on our experiences and opinions on how scorecards and strategy maps can be made actionable – to help organisations realise their intended business strategies. The newsletter is compiled and distributed for free by the authors of the book “Making Scorecards Actionable – Balancing Strategy and Control”. Also make sure to check out www.makingscorecardsactionable.com to get up to date information about our seminars, to evaluate your organisation’s BSC skills according to our computerised BSC Analyser and to download presentations from the document archive.
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