Fixing Your Balanced Scorecard  –  Part 1

Strategic Planning Expert
Robert W. Bradford

Note:  This was previously published in Compass Points

Some time ago, I had an interesting conversation about the Balanced Scorecard with a friend who works in a large organization. His comments reminded me of so many comments I’ve heard about Balanced Scorecard and Strategic Planning that I went back through my notes to see what common threads underlie the biggest issues companies have with Balanced Scorecard initiatives.

To begin with, Balanced Scorecard projects are no more Strategic Planning than budgeting is. Sure, you can use a scorecard to drive certain fragments of the Strategic Planning process, but it is still a fragment of what is needed to create the right strategic change for your organization.

Based on feedback from the companies I’ve met through my Strategic Planning seminars, speaking and client work, here are the main reasons why you might be dissatisfied with your Balanced Scorecard program: 

Part 1 will discuss – In this post:

1. You have too many measurements 

Part 2 will discuss – In the next post:
II. You are measuring the wrong things
a. You are measuring things because they are easy to measure
b. You aren’t measuring the things that really matter

Part 3 will discuss – In the third post:

III. Your scorecard isn’t driving action
IV. The change your business needs involves a more fundamental shift in strategy 

I’ve explored each of these in my blog:  http://simplifiedstrategicplanning.blogspot.com/, following is a compilation of the main points.

I. You have too many metrics in your scorecard

This is most likely true, if you are doing Balanced Scorecard in your company. Why do I say this? There are four reasons you have probably put too many metrics into your Balanced Scorecard.

1. A bigger document = better document:This is a holdover from when we had to write five page papers in high school. We are all now old enough to know that quantity does NOT equal quality, it just makes work and wastes paper.
2.  You can’t decide which numbers to throw out:You know you should have only two or three financial measurements, but there are so many good ones from which to choose. Is the solution to keep them all? Only if you want to make people’s eyes swim and make sure only the accounting types really read your scorecard numbers.
3. You want to be inclusive and have a metric for everyone:After all, if Bill in the mailroom doesn’t have a metric, how will we include him in our process? This is a hard one, because inclusion does create value – but let’s have a tactical number for Bill…and avoid pretending that our company should have a mailroom strategy. Either that, or admit that your Balanced Scorecard process is tactical rather than strategic.
4. You don’t want to exclude certain measures because someone says you “have to” watch them: I hope you’ll immediately explore what will happen if you do the exact opposite. The future belongs to the unconventional company, and you are seriously conventional if you do everything people say you “have to” do…

And what are the reasons for having fewer measures? There are only three:

1. It’s less work
2. It’s more effective
3. More people will read it

In our second and third installments, we will finish the discussions started here.

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?