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The Failed Vasa: COBIT 5 and the Balanced Scorecard (Part 1) By William C. Brown, Ph.D., CISA, CPA, and Chad E. Hess

COBIT Focus | 15 September 2014

On 10 August 1628, the Vasa, among the most expensive ships of the era, sailed on her maiden voyage and, within

minutes, sank below the waves in the Stockholm harbor (Sweden).1 This article is the first of a three-part series that illustrates Vasa’s stakeholder drivers, benefits, risk, costs, enterprise goals and, ultimately, enabler goals, which all

provide context for the seven COBIT® 5 enablers.

While the failed Vasa is not about a failed IT implementation, its story describes failures that resulted from the lack of

implementation of concepts that are embedded within COBIT 5. COBIT 5 embraces an enterprise view vs. a technology

department or technology view per se; a holistic approach; and a new process model with distinct differences between governance and management. At a high level, many of the concepts embedded in COBIT 5, e.g., the balanced scorecard

(BSC), reach beyond IT. While the authors of this article acknowledge the limitations of using COBIT 5 for shipbuilding, the story of the failed Vasa offers a comparative analogy and valuable insight into COBIT 5 and its broadened scope

compared to earlier COBIT® releases.

This is the first article of a three-part series that illustrates stakeholder needs and the BSC.2

King Gustavus Adolphus, who commissioned the building of the Vasa, and the failed process he followed characterized a

technology solution that created demands for new governance and management capabilities, similar to many organizations adopting new technologies today. Historians label King Gustavus Adolphus the “Father of Modern Warfare,”

known for his innovative use of infantry, cavalry, logistics and artillery.3 He led Sweden to European dominance in the Thirty Years’ War at the age of 30. Napoleon Bonaparte copied his tactics, and George S. Patton was a student of his

battlefield maneuvers.

The Vasa As the Vasa set sail in August 1628, several hundred spectators filled the beaches around Stockholm. The king ordered

the ship decorated with hundreds of ornate, gilded and painted carvings depicting Biblical, mythical and historical themes. The Vasa, meant to impress by outdoing the efforts of the Danish, who were concurrently building a ship with many

heavy cannon, was ultimately one of the most expensive naval ships of its era. The maiden voyage was to be an act of political theater for the ambitious king and, with anticipation running high, the Vasa set sail. However, shortly after

deploying the sail, the ship began to heel as the sails caught the breeze. The Vasa righted herself slightly—and then heeled over again. Water gushed in through the open gun ports, and, to everyone’s disbelief, the Vasa sank!

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This doomed voyage began in

1625, with a king who was anxious to acquire a ship with

as many heavy cannon as possible and the ability to

deliver up to 300 Swedish

combatants. He ordered the construction of the Vasa at

the Stockholm shipyards,4 personally approving the

dimensions, the cannon configurations and the

timetable. With 64 cannon on

two decks and the ability to carry 300 soldiers into

combat, the Vasa and a fleet of comparable ships could

alter the balance of power in

Europe. Two gun decks were a significant departure from

traditional shipbuilding in the 1620s—a configuration that

significantly changed the weight distribution of a ship

built in that era. Henrik

Hybertsson, an experienced and well‐respected Dutch

shipwright, led the

shipbuilding during the initial stages of development.

Hybertsson’s experience was much needed as the Vasa was to be the

most formidable warship in the world.

Most analysts now believe the ship was disproportionately narrow for a second tier

of heavy cannon. Hybertsson extended the standards typically used for smaller

warships of that day, but did not engineer

the weight distribution appropriately. A significant technology shift was obvious:

With an advanced naval fleet, the king would remain in power and may even

have the capability to expand his influence. Shipbuilding technology became

the fulcrum of political power in 1625.

Figure 2—COBIT 5 Enablers

Source: ISACA, COBIT 5, 2012

Figure 1—Stakeholder Drivers Ultimately Cascade to Enabler Goals and Interactions

Source: Adapted from ISACA, COBIT 5, 2012

This article is the

first of a three part

series that

illustrates Vasa’s

stakeholder

drivers, needs and

enterprise goals.

The second and

third articles

illustrate technology

goals and enabler

goals.

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COBIT 5 and the Vasa So, what factors contributed to the Vasa disaster? And, how do COBIT 5 enablers apply in the context of the Vasa? COBIT

5 translates stakeholder needs into specific, practical and customized goals within the context of the enterprise, IT-related goals and enabler goals (figure 1).

Part 1 of this series walks through Vasa’s stakeholder drivers, benefits, risk, costs, enterprise goals and, ultimately,

enabler goals (flowing from top to bottom in figure 1) to provide context for the seven COBIT 5 enablers. While enablers and enabler goals were embedded in earlier releases of COBIT and are not new, this article emphasizes the seven

enablers in COBIT 5 (figure 2).5

COBIT 5 reaches beyond a framework for

the IT function and treats information and

related technologies as core assets to the enterprise in one single, integrated

framework, starting with meeting stakeholder needs in step 1 and ending

with separating governance from management in step 5 (figure 3). An

integrated framework considers all

technology-related governance and management enablers to be

enterprisewide and end to end. Efficient and effective governance and

management of IT requires a holistic

approach, taking into account several interacting components. The construction

of the Vasa almost 400 years ago could have applied the same five principles.

The king, the most significant stakeholder,

created a government enterprise to build several ships for the Swedish navy. This

new enterprise required value creation (e.g., integrating new technologies in the

king’s ships) as a primary objective. Cascading that, stakeholder needs are

objectives for benefits, risk and resource

allocations (figure 4). This new shipbuilding enterprise created value for

the king by delivering an advanced naval fleet within a cost framework consistent with the resources and the risk of the Swedish kingdom.

The Balanced Scorecard and the Vasa Cascading from the objectives for benefits, risk and resource optimization (figure 4) are the enterprise goals (figure 1).

So what might be the enterprise goals or the BSC for the shipbuilding enterprise created by the king?

The king was attempting to integrate new technologies into his naval fleet using a newly created government agency.

King Gustavus Adolphus was not only at the forefront of creating a two-tiered ship with cannon on each tier, but he

created a government enterprise to design, implement and manufacture a new shipbuilding technology for which there was no precedence.

The Balanced Scorecard Institute6 reports that the US Defense Advanced Research Projects Agency (DARPA)7 is using the BSC. DARPA’s research mission would align with Vasa’s shipbuilding effort mounted by the king: “To…apply multi-

disciplinary approaches to both advance knowledge through basic research and create innovative technologies that

address current practical problems through applied research.”8

Figure 3—COBIT 5 Principles

Source: ISACA, COBIT 5, 2012

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DARPA’s short-term projects, including such

recent examples as advanced electromechanical prosthetic limbs and bio-

inspired sensors using quantum physics, are higher on the risk continuum. In 1628, the

design and implementation of two tiers of

cannon on the Vasa was a high-risk military project. Unlike how the king built the Vasa,

DARPA has not operationalized itself into a manufacturer.

Based on anecdotal evidence, including the comments of one of the founding authors of

the BSC, the use and effectiveness of the

BSC at all levels of the US government, including state, local and federal, appears to

be limited.9 By today’s standards, the king was at the forefront of using a government

agency for the development of a new

technology.

Kaplan notes in a blog:

The sorry state of the US air traffic control system and of the information systems of most US federal agencies testify to the inability of the US Congress and executive branch to support strategic investments that enhance the capabilities of government agencies. Public sector agency heads, therefore, must be much more creative and proactive to build awareness and commitment among their governing authorities, having them fund projects that build capabilities, and holding them accountable for delivering improved performance to citizens.10

Kaplan’s comments about awareness, commitment and accountability are about achieving strategic alignment from top to

bottom, a major part of the BSC implementation.

New technology, geopolitical benefits and resource optimization are very evident in the king’s governance objectives. A

ship that sinks within a few minutes of sailing is not a good use of resources. The BSC for the king's new government

enterprise, including designing and integrating new technologies, might have appeared with the following narrative (figure 5).

Figure 5—Enterprise Goals for King Gustavus Adolphus and the Vasa

Balanced Scorecard

Enterprise Goal Relationship to Governance Objectives

Benefits Optimization

Risk Optimization

Resource Optimization

Financial 1. Stakeholder value: Maximize value at least cost.

P S

2. Competitive position: Meet or exceed the capabilities of any naval ship in service.

P P S

3. Managing risk: Create a meaningful risk-reward paradigm.

P S

4. Compliance: Meet the king’s decree, whatever it is, within a reasonable time.

P

5. Transparency: Keep the king fully informed on a timely basis.

P S S

Customer 6. Customer: Service the needs of the Swedish Navy.

P S

7. Continuity and availability: Balance timeliness of delivery with the ability to survive high winds and storms.

P

Figure 4—Stakeholder Needs and Governance Objectives

Source: ISACA, COBIT 5, 2012

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8. Agility: Meet a wide range of service demands. P S

9. Information-based: Collect feedback, analyze and act upon it.

P P P

10. Optimization: Minimize delivery costs while maximizing quality.

P P

Internal 11. Shipbuilding processes: Optimize processes. P P

12. Shipbuilding costs: Minimize costs. P P

13. Managed change programs: Ensure that programs are in place and managed.

P P

14. Staff productivity levels: Ensure that architects and shipbuilders maintain high productivity.

P

15. Shipbuilders compliance: Ensure that compliance is in line with the king’s policies.

P

Learning and growth

16. Architects and shipbuilders: Secure skilled and motivated personnel.

S P P

17. Innovation culture: Ensure that architects and shipbuilders maintain innovative designs.

P

Based on: Kaplan, R; D. Norton; The Balanced Scorecard, Harvard Business Review Press, USA, 1996

Among the major topics addressed in the second and third articles of this series on the failed Vasa will be the processes

for governance and management of enterprise IT (GEIT) and the Monitor, Evaluate and Assess (MEA) domain (figure 6), examining the differences in management of the shipbuilding and the king’s governance. This is noteworthy because

COBIT 5 distinguishes between management and governance processes. Not only did the king move between governance

and management processes regularly, but failures in effective MEA processes and the absence of risk management facilitated the short life of the Vasa. Those differences, as well as other aspects of the Vasa, will provide context for

COBIT’s seven enablers (figure 2).

Watch for Part 2 of this series, “The Failed Vasa,” on 29 September.

William C. Brown, Ph.D., CISA, CPA Is an assistant professor, chair of the Accounting and Business program and director of the Master of Accounting program in the College of Business at Minnesota State University, Mankato (Minnesota, USA). His teaching experience includes

management information systems and accounting, and he has served at various levels of responsibility, including chief

financial officer, at three US Securities and Exchange Commission (SEC)-registered organizations for more than 25 years. Brown has led several project teams to implement enterprise accounting and related systems.

Chad Hess Is a graduate teaching assistant in the College of Business at Minnesota State University, Mankato (Minnesota, USA). His responsibilities include teaching “Introduction to Financial Accounting” and working closely with the director of technology

within the College of Business to implement enhanced technology on campus.

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Endnotes 1 Vasa Museet, “The Ship,” 2014 2 Kaplan, R; D. Norton; The Balanced Scorecard, Harvard Business Review Press, USA, 1996 3 Williamson, D.; Debrett's Kings and Queens of Europe, England, 1988 4 Op cit, Vasa Museet 5 Ibid.

6 The Balanced Scorecard Institute, “Performance Measurement and Balanced Scorecard Organizations ,” 2014

7 DARPA, “Our Work,” 2014 8 Ibid.

9 Kaplan, R; “Using Scorecards for Governance in the Corporate and Public Sector ,” Harvard Business Review Blogs,

2008 10 Ibid.

Figure 6—Processes for Governance and Management of Enterprise IT

Source: ISACA, COBIT 5, 2012