Balanced Scorecards: Putting Strategy into Action
Your organization's success is highly dependent upon its ability and willingness to embrace a winning strategy. Yet, many organizations are stuck in a reactionary mode that prevents their strategy from being brought to life. In fact, a Fortune magazine study revealed that less than ten percent of viable strategies are effectively implemented.
Expanding your focus to include forward-looking indicators that measure future organizational health will help you break the reactionary cycle. Balanced Scorecard systems enable such measurements, empowering organizations to position themselves for future success. By tracking predictive indicators such as customer satisfaction, employee turnover, operational process efficiency, and training hours per employee — in addition to revenue and profitability — they provide more actionable performance insights. Equally important, organizations can implement these systems fairly quickly. Follow these critical steps to maximize your Balanced Scorecard success:
- Communicate the strategy: Often, organizations will distribute a well-intended "vision" memo and then never mention it again. Or, they'll change the strategy after a workforce reduction or merger, but neglect to adequately convey that change to the entire organization. These are sure signs of strategic neglect. Instead, once senior management has developed the strategic focus and defined it in clear and simple terms, they must communicate it repeatedly to everyone in the organization — before Balanced Scorecard systems are implemented or refined.
- Put the strategy in motion: Perhaps an organization's strategy is built around growing repeat business through the very best customer care. Yet, its call center employees are told to keep customer service calls as short as possible. Here, operations aren't supporting the strategy. It's critical to break down the strategy into tactical elements that can be acted upon by individuals or teams at the departmental level.
- Measure the right things: Many organizations tend to only measure what's easy to measure. Or, their strategy has changed, but the measurements haven't. One organization changed its strategic focus from being the industry innovator to the low-cost provider, yet it was still focused on product development rather than cost-cutting metrics. Implementing a Balanced Scorecard — and refining it when necessary — aligns your metrics to support the strategy you're trying to achieve.
- Use technology for real-time metrics: Select the departments that can make or break your strategy, and then implement a Balanced Scorecard to measure their impact on your organization's success. If, for example, employee turnover rates are seriously slowing processes or hurting customer retention, HR may be an appropriate area to focus on first. Make these metrics part of daily life for all of your employees.
- Unify and reward the people: It's impossible to implement a winning strategy without committed employees. All employees must understand how they contribute to the strategy. Build their awareness and understanding of the specific metrics they'll be measured against. Frequently convey how they're doing. Then, reward them when they deliver accordingly.
Implementing a competitive strategy doesn't have to be overwhelming. With the right Balanced Scorecard technology and experts at your side, your organization can define or refine its strategy and metrics within a few short months and immediately improve operational performance.
To learn more about Balanced Scorecards and how CherryRoad can help you implement and manage a winning strategy, contact us at info@cherryroad.com.
