Balanced Scorecard Diagnostics: Maintaining Maximum Performance 1st Edition

As a strategist I have hundreds of Kindle books on strategy at my disposal. I frequently look at the reviews both before and after I buy a book, and I noticed that this useful book had only one review. I like to read long and interesting reviews, but today you will have to look elsewhere, as I simply want to endorse Niven's works (he has others that you should look into also), as well as Norton and Kaplan's excellent books. I keep waiting for a book on the balanced scorecard by Art Schneiderman (who stakes his claim for being the originator and when I talked to him was very relaxed and busy working on staking up his tomatoes!). Yes, strategists want elegant solutions but strategy execution has to be in concert with the capability maturity of the organization with respect to strategy, strategic planning, and (gasp) even scenario planning.If you are involved in any kind of strategic planning effort, learn about the balanced scorecard. Get your organization to buy this and all of Niven's books, buy all of the Norton and Kaplan books, and tell your spouse you are going to be busy reading about a dozen books! And if your organization won't spend the money, buy them out of your own pocket. It's about you being smarter about strategy and strategy execution!Bottom line - don't ignore this book if you are interested in measuring your strategic efforts!

Why do as many as half of all balanced scorecard users not achieve the results they hoped for? Doesn't the balanced scorecard work in practice?David Niven is an expert on Balanced Scorecard and his first book was an easy-to-read, well-structured manual of how to make scorecards work: "Balanced scorecard - step-by-step" (2002). It bridged the gap between practice and theory - especially for newcomers to the concept.In this new book, Niven tries to bridge another emerging gap. It is the gap between those questioning the usefulness of balanced scorecard, based on the many unsuccessful implementation attempts, and what people like Niven (and I) believe to be reality: that the scorecard framework remains sound, but must be instituted with rigor and discipline if you expect to get results.Why aren't many scorecard users happy?Niven believes that the trouble lies in the methods used to implement the Balanced Scorecard. Many firms have been lured by the seductive simplicity of the scorecard model, believing it could be easily implemented and produce results with a minimum of care and feeding. According to Niven, troubled implementations stem from many sources, e.g.- A lack of executive sponsorship to reinforce the Scorecard's value within the organization,- Tired [lagging] metrics reflecting the past with no regard to the drivers of future success, and- Management systems that continue to reward unbalanced, largely financial, performanceHow do we solve it?Niven's approach is basically to put Kaplan and Norton's five principles of the "Strategy-Focused Organization" (2001) into a more practical approach. The messages, obviously, are the same. But Niven manages to make it easier to comprehend. And he challenges the reader throughout the book. The diagnostics dimension of the book is furthermore incorporated at the end of each of the nine chapters where we find self-assessment questions.This week I went to a conference in Copenhagen where Harvard-professor Robert Kaplan spoke about the balanced scorecard. Kaplan, being one of the inventors, acknowledged that too many balanced scorecards did not succeed. It is a paradox, since the balanced scorecard was incepted to overcome to problem that strategies weren't properly implemented. But if the system (or scorecard) to finally make the strategy implementation work doesn't work either, then we're in real trouble. So is the concept, of course.Kaplan's suggestion to make a successful implementation of the scorecard is - like Niven's - to view it as a change project. The change programme goes thru three phases: mobilization (unfreezing), alignment (change), and sustainment (re-freezing). Kaplan specified the details as described below:1st phase: MOBILIZATION ("the case for change"):Principle: #1 Mobilize change thru Executive leadershipLeadership objective: Achieve commitment at the top, build the executive team, and build the case for changeCore competency: The catalyst's role is to be a missionary. The action list includes to advocate, to educate, and to sell a new way of managing.Management role: Executive education (the need for strategic execution) via conferences, in-house workshops, and readings.2nd phase: ALIGNMENT ("early wins")Principle: #2 translate the strategy into action, #3 align the organization.Leadership objective: Define and clarify the strategy, specify long-term targets, and communicate to workforceCore competency: The project team's role is as consultant and change agent. The action list includes to design strategy maps, to design scorecards/targets, to create alignment/cascade, and to overcome resistance.Management role: Strategy maps, balanced scorecards, First Report, Link business and support groups to the strategy, and to rationalize initiatives3rd phase: SUSTAINMENT ("irreversible momentum")Principle: #4 Motivate the staff, #5 Govern the OrganizationLeadership objective: Reinforce strategic message: Employees follow the leader, Enforce a performance-based culture: get results, and Lead the new management meetingCore competency: The office of strategy management's role is to be the "chief of staff" (like in the military and government). The action list includes to install accountability, to shape the executive agenda, and to integrate governance.Management role: Scorecard reporting system, HR processes aligned, Accountability and rewards aligned, and meetings focused on scorecard objectives and measures.If you're interested in Balanced Scorecard, you should obviously read the original work by Kaplan and Norton. But I also recommend a very capable book by the Swedes Olve et al (2003) - "Making Scorecards Actionable: Balancing Strategy and Control" - that also focuses on why balanced scorecards go wrong - and what to do about it.If you're even more interested in performance measurement systems, then do also consider "Performance Prism" by Neely et al (2002) that takes performance systems to the next level. Personally, I don't believe they've designed balanced scorecard's successor, but they have many interesting perspectives on stakeholders, choice of measurements, and the relationship between cause and effect.Peter Leerskov,MSc in International Business (Marketing & Management) and Graduate Diploma in E-business