White Paper :The Performance Manager: Turning Information into Higher Business Performance
This white paper examines the partnership between decision makers and the people who provide them with information to drive better decisions. It offers suggestions for multiple decisions areas, taking into account the need to not only understand your data, but also plan and monitor your performance.
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In my previous three articles in www.businessintelligence.com, I’ve made the case that the Balanced Scorecard is a powerful tool for aligning the resources and people of an organization in order to successfully execute the organization’s strategy. The top level corporate scorecard plays an important part of accomplishing that strategic alignment. A well-designed strategy map clearly identifies the critical strategic objectives in all the classic Balanced Scorecard perspectives (Financial, Customer, Operations, and Learning & Growth). The strategy map also explicitly identifies the cause & effect relationships between those strategic objectives. By focusing first on the unique value proposition to be offered to the targeted customers and then aligning the operational and learning and growth objectives to support those customer-centric objectives, the scorecard can become a valuable tool for driving organizational behavior toward successful execution of that customer-focused strategy.
Building the top-level corporate scorecard is only one step in the process of creating what Balanced Scorecard founders Dr. Robert Kaplan and David Norton call a “Strategy Focused Organization.” The process of “cascading” the scorecard down through the organization is important for translating the strategy into operational terms for a broad number of employees. Cascading is much different from just creating lower level scorecards at divisional, departmental, or share services levels of an organization. The cascading process helps maintain a consistent focus on the strategy so that the objectives and measures for the lower-level scorecards reinforce the strategy as defined in the top-level corporate scorecard.
There are a number of useful concepts and techniques that can help the cascading process to be successful in “making strategy everyone’s job” (one of the five principles that Norton & Kaplan teach as being essential for building a Strategy Focused Organization). Four of the cascading techniques that deserve careful consideration are:
Emphasizing “Strategic Themes”
Explicitly tying the objectives from lower-level scorecards to the objectives on higher-level scorecards which they support.
Focusing on positively impacting both internal and external customers
Encouraging at least one out-of-the-box “stretch” to positively impact a higher level scorecard objective that wouldn’t normally be considered.
