Successful Step by Step Implementation of the Balanced Scorecard

Building and Implementing the Balanced Scorecard (the 9-step framework)

There are literally thousands of Balanced Scorecard toolkits and building methodologies, but the 9-step framework designed by Howard Rohm of the Balanced Scorecard Institute, a Strategy Management Group, (US, Washington), was found to be the most relevant, practical and implementable one.

Figure 1: The Balanced Scorecard Institute’s 9 step framework

Phase 1: Corporate Scorecard

Step One: Organisational Assessment
Step One of the scorecard building process is about a number of things: to finalise the Balanced Scorecard Plan which will detail, among others, all the teams that will be involved in the designing of the scorecard and the training they will require.

Secondly, Step One involves conducting the organisation assessment of the strategic elements: the mission and vision, SWOT and organisation values.

Thirdly, Step One is also about preparing a change management plan for the organisation, which will entail conducting a change readiness review to determine how ready the organisation is in embarking on such a journey and what needs to be put in place to make it ready, as well as defining communications strategy which will identify the target audience, key messages, media channels, timing, and messengers of the communication. The change management activities will take place throughout each step.

Step Two: Strategy
Step Two (Strategy) is about determining the strategic themes, including strategic results, strategic themes, and perspectives, which are developed to focus attention on the customer needs and their value proposition. The most important element of this step is to ensure that you have unpacked what your customers are looking for from your organisation in terms of function, relationship and image to determine whether you are providing value to your customers.

Step Three: Objectives
Step Three (Objectives) is about determining your organisation’s objectives – that is your organisation’s continuous improvement activities, which should link to your strategic themes, perspectives and strategic results.

Step Four: Strategy Maps
The objectives designed in Step Three are linked in cause-effect relationships to produce a strategy map for each strategic theme. The theme strategy maps are then merged into an overall corporate strategy map that shows how the organisation creates value for its customers and stakeholders.

Step Five: Performance Measures
In Step Five, the performance measures are developed for strategic objectives. Performance measures should be defined clearly, differentiating the outcome and output measures, as well as the leading measures (future expected performance) and lagging measures (past performance history). In this step, you will also design your performance targets. This might be perceived as the most difficult and confusing step, so it is important that a bit of time is apportioned so that the performance measures will be meaningful.

Step Six: Strategic Initiatives
In Step Six, the strategic initiatives are developed that support the strategic objectives. This is where the projects that have to be undertaken to ensure the success of the organisation (the extent to which the organisation fulfills its mandate or vision) are drafted and assigned. To build accountability throughout the organization, performance measures and strategic initiatives are assigned to owners and documented in data definition tables.

Step Seven: Software and Automation
Step Seven (Software and Automation) involves automating the Balanced Scorecard system, and consists of analysing software options and user requirements to make the most cost-effective software choice for today and to meet enterprise performance information requirements in the future. Automation is purposely put as Step 7 on the 9-step framework, to make sure that the proper emphasis is placed on strategic thinking and strategy development before “software seduction” sets in. Purchasing software too early limits creative strategic thinking, and purchasing software late makes it difficult to sustain momentum of the new system, as performance information reporting utilisation is clearly an early benefit to be captured from the process of building the scorecard system.

Phase 2: Business Unit or Departmental and Individual Scorecards

Step Eight: Cascading
Following the development of the corporate scorecard, Step Eight (Cascading) involves cascading the corporate scorecard throughout the organisation to business and support units. Then team and individual scorecards are developed to link day-to-day work with departmental goals and corporate vision. Cascading is the key to organisation alignment around strategy. Optionally, objectives for customer-facing processes can be integrated into the alignment process to produce linked outcomes and responsibilities throughout the organisation. Performance measures are developed for all objectives at all organisation levels.

As the scorecard management system is cascaded down through the organisation, objectives become more operational and tactical, as do the performance measures. Accountability follows the objectives and measures, as ownership is defined at each level. An emphasis on results and the strategies needed to produce results is communicated throughout the organisation.

Step 9: Evaluation
Step 9 (Evaluation) involves evaluating the success of chosen business strategies. The key question asked is: Were the expected results achieved?

The evaluation step includes the following:

  • Ensuring that organisational learning and knowledge building are incorporated into planning
  • Making adjustments to existing service programmes
  • Adding new programmes if they are more cost effective
  • Eliminating programmes that are not delivering cost-effective services or meeting customer needs
  • Linking planning to budgeting

Sustaining the Balanced Scorecard

There is a misconception that once a Balanced Scorecard System has been built and implemented, there will be automatic transformation and buy-in. For the Balanced Scorecard to be successful and for change to occur, the scorecard must be embedded in the management systems. The scorecard must be understood to be a strategic management system as opposed to only a measurement tool. However, to ensure that the implementation of the Balanced Scorecard System will minimise resistance, certain things need to be in place…

  • Firstly, the Balanced Scorecard is a transformation journey and change initiative, not a once off project. Treat as such. Ensure that you have designed a Change Management plan which should run parallel to the Balanced Scorecard. The Change Management plan should address, among others, employee resistance and employee critical questions, i.e. “WIFM” – “What’s in it for me?”
  • Maintain a committed and engaged leadership. After all, change should be driven from the top
  • Develop an organisational culture based on results by establishing a strategy management office
  • Focus the organisation on strategy by holding review meetings organised around strategy
  • Enhance individual accountability for results through objective ownership
  • Align the organisation, systems and employee performance around strategy through a rewards and recognition programme
  • Create a performance, results oriented culture
  • Link budget formation, cost accounting and performance results
  • Emphasise continual improvement – in process, in employee learning and skills development, and in understanding customer needs and satisfaction, and in ensuring employee satisfaction
  • Link key organisation initiatives to the balanced scorecard development process

(Balddrigde, ISO Lean, Six, Sigma, Business Process Re-engineering)

Howard Rohm; Larry Halbach: A Balancing Act: Sustaining New Directions: Perform, Volume 3, Issue 2

Need assistance with developing your organisation’s Balanced Scorecard? P4PE Consulting provides training and consulting services using the Balanced Scorecard methodology, a framework used by organizations worldwide to build strategic planning and management systems that drive organizational performance, improve communications and create strategic alignment.

Joel Omeike! is a DBA graduate and qualified Global Human Resources Management and Development Specialist. His areas of expertise include Entrepreneurship, Business Strategy Development, HR, HRM and HRD Strategies and interventions design such as Change Management, design and implementation of Performance Management, as well as Skills Development. His sought-after experience as a trainer and facilitator has seen him practice his skills at various levels of management; at both national and international forums. He is a BIG Data Analyst. Joel is also a renowned teambuilding expert and motivational speaker. Joel is a Certified Business Value Builder. He can be contacted at: P4PE Institute, Tel: +234 803 5798352 view his profile:


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