MeasureProductivity

Strategy development and identification of key performance indicators are the most important stages of BSC development.  Balanced scorecard project cannot be just purchased and implemented within several days.  Balanced scorecard should become a part of everyone’s work otherwise this system will never bring any positive results.  The problem is that very often balanced scorecard is developed by several or even one of top manager.  There is nothing wrong that top managers are charged with development of key performance indicators and balanced scorecard.  These people know much about the company there working for and chosen strategy.  It turns out that balanced scorecard and strategy maps developed by company top manager meet all requirements and norms of BSC.  But the problem is that in such a case balanced scorecard is used by a dozen of people in the company.  Even if these people really believe in the power of balanced scorecard this revolutionary strategic management tool will never work since it will mean nothing to ordinary personnel, heads of departments and business units etc.  Just to the contrary, balanced scorecard may cause resistance and opposition from personnel since employees will consider it to be just another tool to control them.

Initial stages of BSC implementation

That’s why it is extremely important to initiate a broad discussion of balanced scorecard.  Even if ordinary employees lack strategic management knowledge they can still offers some creative ideas as to internal business processes and generally everything happening on the operational level.  Top managers can think in the long term while head of departments can tell much about company customers, market segments, customer demands and requirements.

What BSC teamleader must do

Before implementing balanced scorecard and developing a set of key performance indicators top management of the company should understand that successful implementation of balanced scorecard can mean drastic changes in the company.  If organization is not ready to change balanced scorecard will be helpless and useless.  Moreover top management and company personnel should start such changes with themselves.  Previously used methods of management will not work with balanced scorecard.  The company must learn to live with BSC but not just use it as a popular managerial tool.  It is not a project that has certain terms for implementation.  Once implemented balanced scorecard is either rejected by the company or stays in the organization forever.  So, in other words, it even works but doesn’t work.

Preparation for BC implementation is perhaps the most important stage, that’s why company should carefully select people will be in charge of BSC development.

Many companies are making a very serious mistake in implementation of balanced scorecard – they do not start an extensive discussion and research of strategy maps inside the company.  The fact is that balanced scorecard will never work if it will be just another top management project which is not understood to ordinary personnel and mid-level managers.  As a rule, company top management is recommended to create a working team that will assume responsibility for implementation of balanced scorecard and promotion of this strategic management tool inside the company.

But creation of a working group itself will not solve the problem.  The company should find the right people who will have desire, motivation and time to promote balanced scorecard and manage discussion of strategy maps.  Some of these people should be discussed and moderators.

Working group members must represent different managerial levels in the company

The common mistake is inclusion of external advisors and company top managers only to the working group.  Sure, these people are very competent in the fields of strategic management.  Of external advisors have prior experience and skills in implementation of balanced scorecard, while top management possesses valuable information on the company itself.  But without participation of ordinary personnel development and design of strategy maps will restrict itself to one time presentation of balanced scorecard and strategy maps to the company.  If ordinary personnel in the company does not understand why they should use this system and what their personal of interest is, there are very few chances to succeed in implementation of balanced scorecard.

How BSC strategy is discussed

BSC becomes philosophy for the company.  It should always cause changes and discussions inside the company.  Discussion on the top level will mean nothing to ordinary personnel who actually bring money and contact customers.  And ordinary sales manager may tell you a lively picture of who his customers are.  He will tell something that a top manager never new.  That’s why combination of professional knowledge in the field of strategic management and the dissipation of ordinary personnel will give the best results.

Working group members should lead discussion on all themes and topics which might be relevant to strategy development and use of balanced scorecard.  BSC must be promoted and working group members should rather act like preachers (of course in a good sense of this word).

It has been observed that companies that initially failed to use balanced scorecard in the right way them and get back to the system, while companies with the positive BSC experience will never part with it.