Scorecards need to answer much more than ‘what is happening?’

A scorecard can be a great vehicle not only to understand on what has happened but also to understand:

• Why is it happening?
• What are we going to do about it?
• What do we expect in future?

Scorecards spend most of their content on answering what is happening and also to an extent on why is it happening. However, the solutions to the issues and projected improvements are discussed and committed out side of the scorecards.

To enable a scorecard to be a holistic vehicle for end-to-end performance management, one needs to have the following constituents in a scorecard:

A holistic scorecard will be:

Focused
• Aligned to SB & SBP
• Apply 80-20 /top 5 rule
• Exception driven

Comprehensive
• Make unit level dashboards linked to overall enterprise dashboard.
• Process Level and Natural Team Level scorecard cuts.
• Firm-up standards. (Unit level TAT, Cost Per Unit & allocation, Tolerances)
• Measure performance against rolling budget where-ever needed.
• Include the key initiatives.

Pro-Active and Analytical
• Trend analysis.
• A scorecard not only shows on where the needle (as in Dashboard) but also how the needle is moving and how much it has moved.
• Analytics support:

Actionable
• Commentary on how good or bad the state is.
• Commentary of reasons for high and low points.
• Commentary on the corrections/improvements to be done.
• Commentary on expected improvements.

To understand the details on each of the above points and sub-points, please refer Designing Scorecards

Mind-Set Issues in Executing Strategy

Strategic Execution Management is an ignored subject, and most of the organization either loose steam or focus by the time they have to start implementing the lofty documents like SB and SBP. Execution is generally not considered “Strategic”

Journey from Strategy to performance has challenges. The whole concept of Balanced Scorecard, is geared towards translating strategy into performance. We in corporate world talk about SOTBS (strategy on top of the book-shelf), as once created, no one looks into it. Let’s look on what falls apart when we get down to execution. This post is towards the mind-set issues:

1. Alignment between stakeholders.
2. People loosing steam after a prolonged and excruciating process of strategy creation.
3. Demarcation between strategists and doers.
4. Execution is Business as Usual and not a glamourous project.

Please refer to Strategic Execution Management is an ignored subject for details.

Prioritize the metrics in a scorecard

There are typically so many issues with scorecards, that business managers have set-up less than ideal objectives for a scorecard. People are still struggling with phase I “What is happening”? These are the fundamental imperatives which need to be resolved before we start thinking of next level:

• Quality of data,
• Availability of data,
• Deciding on what information you need in a scorecard,
• Deciding upon how you will have a common interpretation of data etc.

Refer Designing Scorecards for a back-ground.

In other words, the evolution of scorecards is mostly focused to achieve the objective of finding answers to “What is happening?”

In this situation, it may sound a bit too much to go for ’next level’ objectives out of a scorecard. There is another softer issue. Using a scorecard to answer ‘next level’ of “why” and “what are we going to do about it?” and “How much we project the metrics to change over time?”, demands a level of commitment, which many managers may not be in a position to put on the table.

Given the above challenges, my suggestion will be to select certain key metrics whereby you would go for higher objectives. For example a scorecard might have 20 different metrics, and you might be struggling with 10 of them to achieve fundamental quality on data and interpretation. You may select top 3-4 metrics where you would first go and fix the fundamental ‘information integrity’ issues, and take them to the next level. You can start answering “why is it happening”? and “projected Change in performance”. For the rest, stick to ‘what is happening?’

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