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August, 2008

Making Scorecards Actionable Newsletter # 34 (2008)

Content of Making Scorecards Actionable Newsletter # 34 (2008)

» Network for experienced Balanced Scorecard consultants
» The scorecard as virus
» Educating internal auditors
» Up-coming seminars
» What did you think about this newsletter?



NETWORK FOR EXPERIENCED BALANCED SCORECARD CONSULTANTS

Over the years we have co-operated with consultants from various companies who have relied on our book “Making Scorecards Actionable” when they have assisted their clients on how to make scorecards actionable.

During the coming year we intend to deepen this relationship and offer consulting-colleagues a network where we can meet and discuss our different experiences from working balanced scorecard. We plan to meet three to four times per year and the first meeting will be held in Stockholm in October.

If you are interested in this network, please contact carl-johan.petri@makingscorecardsactionable.com for more information.



THE SCORECARD AS VIRUS

”A systematic attempt to let the economistic logic expand also to the ‘soft’ side of organisations, making it encompass and break through into social relations. Also BSC aims at increasing value, partly through rational control of social, human factors.”

This is a translated quote from a new, fascinating and demanding book written by the Norwegian professor of organisation studies Kjell Arne Rövik. I don’t quite agree with his view of BSC, yet it is the single most valuable book on management that I have read in several years. The Swedish edition “Managementsamhället – trender och idéer på 2000-talet” was just issued (www.liber.se). It is a translation of a Norwegian book from last year. The book combines a discussion of rational, normative vs. social-constructivist approaches to the study of management with an investigation of management ideas that were current in the early years of the new century and how these ideas seem to spread in society. The author argues that it is possible to combine these two scientific approaches into a “pragmatic institutionalism”, where insights about how ideas disperse and change may not only help us to understand what goes on in organisations, but assist us in managing them. By a thorough investigation of management bestsellers, HBR articles, and consultancy offerings Rövik identifies ideas and concepts that permeated organisational life in recent years. He also discusses the process through which this happens: how are ideas extracted from practice and packaged, and how do new users adopt them? And, perhaps most importantly, how are they modified in the process?

This type of thinking has so far mostly been couched in terms of how ideas get translated into new contexts. Rövik prefers to compare with how viruses are picked up and contaminate. In a similar way, new ideas may hibernate, cause sudden unpredicted outbreaks, mutate into new forms, and become invisible but yet continue to exist once we integrate them into our systems, or become resistant. He does not make too large claims for the precise fit of this metaphor, but I find it suggestive and useful.

Among the trends that Rövik identifies in turn-of-century Scandinavia, a few are expected like a move away from bureaucracy. But he also captures beautifully the subtle character of this seeming new informality. While hierarchies with fixed roles ensuring strict and rule-based operations have gone out of fashion, he sees a simultaneous rebureaucratization based on formalized control systems. Organisations should become more flexible, temporary and with fewer levels, but top management simultaneously believes in indirect and impersonal controls that can be interpreted as a renewal and strengthening of hierarchy. Just like when deregulations of markets require new, more process-based rules. It is in this context that Rövik places BSC.

I believe this discussion should have been extended by discussing the often selective character of this rehierarchisation. It is a pity that Rövik among his enormous list of references did not include Andreas Käll’s licentiate thesis at Linköping University, which builds on Rövik’s ideas in earlier books. Käll studied the introduction of BSC in Jönköping County hospitals. Like other Swedish studies his book implies that BSC may get translated, or mutates, into something rather far from the top-down control we read about in Kaplan and Norton’s books. Rövik interviewed in two Norwegian ex-state-owned firms and studied documents from them, as he also did with some large consultancies. They presented BSC as a technology for integrated control by top management, it seems not too far from the US original. Of course it can be used in this way. But an interesting confirmation of Rövik’s discussion about viruses is, I believe, that BSC often fails as centralized control, except possibly that some selected metrics are added to report packages. Where BSC has succeeded, it developed into a much richer exchange of information than the “economistic” label implies.

As many who receive this newsletter really should read at least parts of this book for themselves, I will not extend this discussion further. Suffice it to say that the book is a highly useful summary of many current “pop” trends in management, and simultaneously a thought-provoking guide for anyone involved in managing such ideas in organisations.



EDUCATING INTERNAL AUDITORS

Professor Nils-Göran Olve and professor Fredrik Nilsson will together run an advanced course for internal auditors on the issues of internal audit and corporate governance. One important issue in Nils-Göran Olve’s teaching on corporate governance is to maintain a strategic focus, as we have elaborated on in for example the article “Don’t let compliance get in the way of management control” in Making Scorecards Actionable Newsletter # 31(February 2008). For more information about the course on Internal Audit and Corporate governance, follow this link: http://www.internrevisorerna.se/verksamhet/kompetensutveckling/_universitetsutbildning



UP-COMING SEMINARS

During the autumn we only have a handful of seminars scheduled. Check out our website, under Seminars, to find more up-to-date information about events, dates and places. Here are some of our appointments:

September 9-11 – Boston
September 15 – Visby, University of Gotland
October 20 – The Role of the Controller, Stockholm
November 27 – Are your financial indicators taking you in the right direction – Stockholm



WHAT DID YOU THINK ABOUT THIS NEWSLETTER?

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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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