PREVIOUS NEWSLETTER

June, 2009

Content of Making Scorecards Actionable Newsletter # 39 (2009)

» Exciting article together with the Swedish Champion

» Visualizing strategy - or visual strategizing?

» Old clip on Youtube.com

» What did you think about this newsletter?



EXCITING ARTICLE TOGETHER WITH THE SWEDISH CHAMPION

Once again we have published a full-length article in Bonnier Business Publishing’s handbook “Business Development”. This time, however, Dr. Carl-Johan Petri has written the piece together with a somewhat surprising co-author: Nanne Bergstrand, coach for Kalmar FF, the football team that won the Swedish Premiereship (Allsvenskan) in 2008.

One of Nanne Bergstrand’s interesting ideas is that he doesn’t rely on “number of goals” as a valid indicator of success, since it does not say anything about whether the team has played its game or not. The team can get a lucky penalty kick in their favour, or the other team can score on themselves. Instead he wants to measure something that corresponds with the team’s real achievements. He believes that number of times the team has hit the ball on goal (regardless if it scores or not) is one such indicator. It captures whether the team has managed to follow its strategy, i.e. whether it has managed to keep the team together and move the ball from the back all the way to the other team’s goal.

When it comes to strategy execution in organisations we recognise similar situations. A company can be financially successful in the short run even if it does not keep the organization together and act according to its business strategy. But if the company wants to implement its strategy and business plan – and stay successful in the long run – management and employees can not rely on indicators that only summarise outcome. To assure continuous attention to the strategy the company needs to evaluate what they do to drive performance (equivalent to goal opportunities – which is measured in the development-, process and customer perspectives) as well as its outcome (goals, i.e. financial results).

Many executives like to compare their organisations with professional sport teams – and the analogy may seem relevant. A lot of positive connotation can be retrieved from the sports domain. In our own discipline – how to develop management control systems to assure that business strategies are realised – for example Stephen Covey (the author of “The 7 Habits of Highly Effective People” as well as “The 8th Habit”) uses a football metaphor to show the ridiculously low goal- and strategy awareness in most organisations: In a recent study he argues that only 37% of the employees have a clear understanding of what their organisation is trying to achieve, only one in five was enthusiastic about their organisation’s goals and so on… Covey continues: “If these figures would be the same in a football team only 4 of the 11 players on the field would know which goal is theirs, only 2 would care and all but 2 players would, in some way, be competing against their own team members rather than the opponent”. So, can business men learn something from the sports domain?

Certainly! Managers can learn a lot from professional sport coaches’ way to focus on the processes, i.e. what is driving performance, rather than allocating all attention to the outcome (i.e. focusing on goal opportunities instead of goals). But, when using the sports domain as a source of inspiration, it is important to recognise some limitations. The comparison should, first and foremost, inspire managers to reflect on their own responsibilities – as coaches – not suggest that the members in their team – the employees – are like professional football players (cf. how much a football player trains compared to how much he plays: approximately ten training hours per match hour. And vice verse, how many days a normal employee attends training: typically a couple of days per year. The difference is 10/1 compared to 1/100, i.e. factor 1000!)

If you want to read the full article (in Swedish) please download it from Bonnier’s website: http://www.bonnierbusinesspublishing.se/bonnier-2063.htm



VISUALIZING STRATEGY - OR VISUAL STRATEGIZING?

In our 2003 book Making Scorecards Actionable we already spoke of "visualizing strategies in maps" - strategy maps, that is, a tool suggested by Kaplan and Norton. Since then, "visualization" has popped up in many more texts about strategy and control. A recent example is in the January-February issue of Long Range Planning (pp. 42-74). Martin J. Eppler and Ken W. Platts, professors at the Universities of Lugano and Cambridge, respectively, call their article Visual Strategizing - The Systematic Use of Visualization in the Strategic-Planning Process. One of the five concrete experiences they report on, and provide a graphical example from, concerns the use of a strategy map.

The title of their article shows how their contention is that strategy is not just made visual. Determining and carrying out a strategy becomes different through the use of visual tools:

…visualization should not just be seen as an attractive way to communicate strategic planning process outcomes and monitor its progress, but as a powerful process enabler that can enable strategizing as a joint management practice.

As we agree with most of Eppler and Platts' arguments, we prefer to suggest that you read the article, rather than try to summarize it here. Some of the other tools and models reported by the authors would be most interesting to combine with balanced scorecards. We do, however, question their attempt to link specific tools to the different steps in a rational sequence where a strategy is first analysed, then developed, then elaborated in plans and finally implemented. Especially as we share their belief that

…the role of communications and emotions in strategic conversations has so far been insufficiently explored.

Eppler and Platts distinguish between cognitive, social, and emotional issues in strategic management. Wouldn't that indicate that there is a need to involve as many organisation members as possible throughout the process, for instance by using a shared visual image of its strategic logic that can be used continuously? This does not mean that it has to be strategy maps, or that you can combine different kinds of images.

The sequence proposed by the authors provides a neat structure for an interesting and topical article, but in practice we prefer to aim for consistency - and a strong overlap between steps, for instance being prepared to reconsider parts of the strategy as organisation members have gained a mature understanding of it. For this, we find strategy maps and scorecards need to be referred to constantly, rather than seen as a tool just for implementing strategy.



OLD CLIP ON YOUTUBE.COM

As you might have noticed, we have made it a habit, to publish short video casts on Youtube.com, as a comment to something we have written about in the newsletter. We are still experimenting with this new channel of communication and intend to continue, as we have received some positive feedback on the clips produced thus far.

In this summer edition of Making Scorecards Actionable Newsletter, however, we have not produced any new clip. Still, we want to continue our effort to publish content on Youtube.com, so we refer to a previous clip from us, that was published a couple of years ago.

The clip is an introduction to our model in the book Making Scorecards Actionable – Balancing Strategy and Control. Over the years, this clip has been viewed more than 8000 times and even been includes in several play lists. You find the clip on the following address:
http://www.youtube.com/watch?v=ZPEe7c66rUw



WHAT DID YOU THINK ABOUT THIS NEWSLETTER?

Please, help us improve this Newsletter. Follow the link below and give us some quick feedback (only three questions) on the Newsletter: http://www.surveymonkey.com/s.aspx?sm=qKORLON7GGlz7db_2fHzKnoQ_3d_3d






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.
  Back