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August, 2007

Making Scorecards Actionable Newsletter # 28 (2007)

Content of Making Scorecards Actionable Newsletter # 28 (2007)

» Reflections on how to make scorecards actionable

» Balanced Scorecard in Italian translation

» Courses on “Making Scorecards Actionable” (in Swedish)



REFLECTIONS ON HOW TO MAKE SCORECARDS ACTIONABLE

The hype surrounding scorecards has probably peaked. Those who introduced BSC because it was the modern thing to do are hopefully leaving the arena. Those who remain should persevere, because BSC is no quick fix. We find indications that, with patience, scorecards will enable organizations to work in new ways. We cannot prove that this always will be more profitable, or more effective. Maybe business success depends largely on short-term manoeuvring, or sheer luck. But if you believe that strategies, coordination and focused, yet flexible, execution of agreed intentions is of any importance, and that more than a handful people need to be involved in constantly keeping strategies relevant, then scorecards is a good idea for you.

Organizations need controls, because organizing is about coordination. Even short-term, adaptive control in a highly operative context usually needs a long-term basis consisting of ideas about the world you are operating in. People in an organization need to arrive at those ideas together, and a shared understanding of their consequences, because only then will they be able to act as quickly and wisely as they inherently are able to do. Some of those ideas will concern how this organization shall become successful in what it is doing. Strategic control essentially is making sure everyone knows about this, and acts on it. Control is about realizing intended strategies.

The ideas and shared understanding we just mentioned are hypotheses: "if-then". If we develop our skills, then we will be able to provide improved services. If we do that, customers will like it. If customers like that, there will be one zillion more people who are willing to become our customers. Et cetera. Some of these hypotheses will be "almost-truths", fact-based, and proven by experience. Others will be conjectural, because no one ever tried it before. Most will fall somewhere in between. We call them strategic bets. Strategy maps and scorecards document them for us, to make it easier to agree on them, question them, find support for them, or refutation. To use them in our daily activities, as a guide for what to do. And to give them adequate time to be tested. But never believe them to be eternal truths.

We need to involve many members in our organizations to discuss these hypotheses. They need to know about our strategic bets, and understand their role in trying to realize the intentions. They may also contribute their knowledge and improve on them.

All of this provides the backdrop to BSC and explains why we need to use strategy maps and scorecards to visualize strategy: not for multidimensional performance measurement as such, but to enable communication.

The six "design issues" that we suggest must in themselves be balanced. There is no such thing as a best design for strategy maps, a best set of roles, or the best BSC software. How these and the other issues are tackled depends on the situation: what you want to achieve through BSC; other types of controls; organizational culture, etc. By learning from the cases in our book it is possible to identify the issues to be tackled, and get an idea of the range of possible designs.

Introducing scorecards into an organization is perhaps best viewed as creating a business language. The words and phrases in the language that are needed will depend on each organization's situation and intentions. But when people talk, there are certain constants even across different cultures, but the main thing is to get the communication going. By doing that, scorecards are made actionable.



BALANCED SCORECARD IN ITALIAN TRANSLATION

Nils-Göran Olve and Anna Sjöstrand’s short book on Balanced Scorecards has recently been published in Italian translation.

“Il testo, tradotto da Capstone-Wiley e rivolto a Manager e Direttori finanziari, tratta i concetti chiave delle balanced scorecard, una metodologia nata per sviluppare la strategia aziendale, in correlazione con i sistemi di controllo esistenti, fino all'impostazione degli obiettivi e al monitoraggio delle performance e dei progressi. Gli autori, veri esperti del settore, forniscono esempi tratti dalle aziende di maggior successo, come Ricoh, Xerox ed Ericsson, oltre che le idee dei protagonisti più brillanti, tra cui Robert S. Kaplan e David P. Norton. Il libro include inoltre un glossario dei concetti principali e una guida articolata alle risorse, fornendovi l'esperienza necessaria per capire e implementare velocemente questo agile strumento di controllo gestionale.”

Click on the following for more information about the book: http://www.hoepli.it/libro.asp?ib=9788820338602&pc=000005005010000#



COURSES ON “MAKING SCORECARDS ACTIONABLE” (in Swedish)

During the autumn we will run two different courses on how to make scorecards actionable. The first of them – October 18th – is designed to assist managers who intend to launch a BSC effort and will focus the most important issues in a scorecard project. The second seminar – November 11th – is designed to allow experienced balanced scorecard users to discuss and develop their understanding of how to implement balanced management control systems to assure that the business strategies are realized. For more information about the seminars click your way through to the “Seminars” section on the website or follow these links: http://www.civilekfor.se/templates_epilite/Page____3139.asp and http://www.civilekfor.se/templates_epilite/Page____3128.asp.






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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