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The KPI.org Blog

David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Navigating with the Fuel Indicator

By David Wilsey

Sep 26, 2013 7529 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Has it ever dawned on you that you think you are headed in the right direction only to discover that you are using the wrong measure to inform your decisions? It feels a bit like navigating a truck using the fuel gauge instead of the GPS.

It was a lesson that I observed again last week while presenting at the McLeod Software Users’ Conference in Scottsdale, AZ. Between a golf tournament in the 106 degree heat, a bus ride for 600 participants for a night at the Rawhide Western Town and Steakhouse, desert Jeep tours and lots of great food and speakers, the software company put on a great show. 

The part that was most exciting to me was the official launch of the new Navigator product, which is the new strategic performance management solution that McLeod has added to its portfolio of transportation management and trucking software solutions. 

The highlight of the conference was a presentation by Lee Camden, the IT Director at Earl Henderson Trucking. Henderson was the first client for which McLeod and the Institute partnered together to help with strategic planning and measurement development. I facilitated the Henderson team quickly through our planning process and the McLeod team modeled the software after the results. In his presentation, Lee demonstrated the value of the Navigator product as well as the practical benefits they have received over time from improved strategy focus. He demonstrated how they used their strategy map to visualize and align around strategy. 

He also noted how they had stopped focusing on only driver retention as their primary organizational capacity measure. A key takeaway from the planning dialog was the realization that their strategy wasn’t dependent on having just anyone driving their trucks. Simply having a driver turned out to be about as strategic as filling the gas tank.

Henderson’s strategy focused on adding specialized offerings and other premium services. In order to effectively deliver the services that they felt gave them a competitive advantage, it was critical that they have qualified “good” drivers. In order to improve on the Increase the Number of Good Drivers objective on their strategy map, McLeod has implemented an initiative around this qualification process and are now measuring their progress on this much more strategically important factor.

I look forward to catching the presentation video on the McLeod website and case study.  Both will be posted to the BSI website as soon as they are available.

Gail Stout Perry Gail Stout Perry

Gail is co-author of The Institute Way. With a career spanning over 30 years of strategic planning and performance management consulting with corporate, nonprofit, and government organizations, she enjoys speaking, training, and writing, sharing her experience with others. She currently is the Chief Strategy Officer and VP Americas for Corporater.

Balanced Scorecard Gone Bad - What's that Funky Smell?

By Gail Perry

Sep 20, 2013 16842 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

I had a distressing phone conversation earlier this week.  A former client called to say they were at a decision-point. They were trying to decide if they wanted to keep using their balanced scorecard system or not.  He went on to say, “to be quite honest, the scorecard really isn’t driving the organization.  It feels more like ‘busy work’...it leaves a bad taste in our mouths.” 

“In fact,” he continued, “our project management discipline is clearly what is strategically guiding the organization while the balanced scorecard feels like an anchor weighing us down.   It used to be what propelled us forward and kept everyone in alignment.  Maybe if we cascade the scorecard, this will help?”   I was perplexed.  While I’ve diagnosed the root cause and prescribed the solutions for a lot of “broken” scorecard systems, this was the first time I’d heard of project management being “more strategic” than the strategic management system that drives it.

The next day, I joined the client executive team on a web conference.  We walked through an overview of an integrated scorecard system – reviewing the 14 components of a fully integrated system.  As we talked, some of the team members began remembering back to when they built the original scorecard and recalled how the underlying strategic elements were built – how they brought in board members and stakeholders to inform and set strategic direction.  But most importantly, they began to remember when it was built. 

This client is a healthcare organization and they built their original scorecard during the last presidential election cycle - at a time when there was political uncertainty.  The environment was so uncertain that one of their strategic themes was “Readiness for Public Policy Changes” which meant that their resultant strategic scorecard was designed to prepare them for whichever way the political winds eventually blew.  And that scorecard was appropriate for the times.

But their environment has since changed...significantly!  In the past year or so, the Affordable Care Act now drives all action and projects at this organization.  This massive shift in their strategic environment happened to coincide with the implementation of a robust project management system in which the portfolio is aligned to the tenants of Triple Aim.   That’s when the room went silent.  As I strained to hear across the phone line, I began to hear murmurs as one after another team member came to the same diagnosis.  Their environment had changed and they had shifted strategic directions without updating their strategy / strategic balanced scorecard.  Their strategic scorecard was outdated....expired!  Their sense that their old scorecard was anchoring them in the past and was at odds with the new implied direction of the organization was absolutely correct. 

They had stumbled into the classic “Set It and Forget It” mistake.  Their project management discipline (which is critical to strategy execution) appeared to be “more strategic” because it was more aligned with their true strategy than was the rest of their strategic management system.  Due to some key team member turnover, they had forgotten their entire system needs to go through a regular strategic evaluation cycle!  Scorecards do not have indefinites shelf lives....they are dynamic systems designed to allow an organization to shift directions, as needed.  The team is now in the process of updating their entire strategic management system to reflect their current reality. And as part of this update process, they will ensure that their current strategic direction is chosen, not implied.   Only then can they be sure that their current portfolio of projects is truly aligned for maximum strategic impact.

Does your scorecard have a funky smell?  For more examples of Scorecard Challenges and Solutions, we invite you to read “The Institute Way: Simply Strategic Planning & Management with the Balanced Scorecard.” 

We also invite you to join the conversation at our Linked In group: www.theInstitutePress.com/group
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