quality & effectiveness stream: enabling strategy with the ...€¦ · key elements for...

©2008 Protegra Inc. All rights reserved.

Quality & Effectiveness Stream: Enabling Strategy with the Balanced ScorecardDan PerronMay 3, 2012

© 2012 Protegra Inc. All rights reserved.

Agenda

1. A Strategy Primer

2. Balanced Scorecard: a tool

3. Using the Balanced Scorecard

- Building the scorecard

4. Strategy Deployment: execution is

everything!

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Session Overview

• Using real company examples, this interactive session will demonstrate how the Balanced Scorecard helps organizations define, communicate, plan and execute their strategies –driving alignment and successful outcomes.

• Once into the execution phase, implementing a rigorous Plan-Do-Check-Adjust (P-D-C-A) is fundamental to keeping the organization pointed in the right direction. A proven tool, the scorecard can be used to link the organization’s vision, mission and strategies.

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A Strategy Primer• The dirty little secret of strategy creation is that there is no theory of strategy

creation. Strategy has to come out of a creative process conducted by thoughtful people.

• Strategy is constructing something unique from the same set of building blocks your competitors have.

• Strategy is foresight (and knowing what to do with it).• Strategy is the art of creating advantage.• Finding patterns in chaos.• In a world of increasing noise and instant gratification, strategy is about being

clear on the core values you stand for so people get a chance to remember you.

From Sun Tzu• “Strategy is not planning in the sense of working through an established list,

but rather requires quick and appropriate responses to changing conditions.”“Tactic without strategy is the noise before defeat.”

• Strategy is all about guiding the outcome of individual effort and events to produce sustained success. In strategic terms, success is producing a sustainable outcome that is valuable and satisfying over time. Strategy, then, is not winning battles; rather it is winning wars and more particularly the peace that follows them. Focusing on battles at the expense of wars and the subsequent peace is dangerous in the extreme and almost never leads to long-term success.

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Mission and Vision• You can’t develop your organization’s strategy without dealing

with these two “overused and misunderstood” terms• Mission: what business are you in; what is your organization’s

day-to-day reason for operating; the purpose of the organization, it’s what we do!

• Vision: what ultimate success will look and feel like; a word picture of the desired future state; what the organization ultimately intends to become. This is what drives your strategy (adapts to circumstances)

- “Vision translates mission into truly meaningful results – and guides the allocation of time, energy, and resources. In my experience, it is only through a compelling vision that a deep sense of purpose comes alive.” Peter Senge

- …• Assets: what assets does your organization use to create value?

- Employee knowledge, organization’s competencies- Customer relationships and company reputation- Culture: teamwork, innovation, efficiency- Cash

• Strategy: how your organization uses its assets to achieve its vision

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Balanced Scorecard: a tool• “A carefully selected set of quantifiable measures

derived from an organization’s strategy. The measures represent a tool for leaders to use in communicating with employees and external stakeholders the outcomes and performance drivers by which the organization will achieve its vision and strategic objectives.”

• “Balances historical financial measures with the drivers of future value for the firm”

• “[…] critical tool in aligning short-term actions with their strategy.”

• The Balanced Scorecard is only a TOOL!

Balanced Scorecard, Paul R. Niven, 2003

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Balanced Scorecard Layout/ModelStrategies / Objectives Measures Goals / Targets (date) Projects

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Balanced Scorecard Example

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http://www.business-transform.co.uk/strategy/balanced_scorecard.htm


Balanced Scorecard Questions/Answers

• Perspectives are customizable: your choice of perspectives must fit your application/business

• The combination of perspectives and questions provide a good approach to develop your strategy

• The list of questions drive to your organization’s vision

• A core objective of strategy is DIFFERENTIATION: creating, expanding or maintaining a competitive advantage, or reducing a competitor’s advantage

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Building Your Balanced Scorecard• Select the organization

- Introduce yourself, your organization and its mission and vision to your table mates- Democratically, select the “case study” organization

• Use the flip chart• Beginning with the “Customer” perspective, answer the question “To achieve

our vision, how must we look to our customers?”- Define at most 2 strategic objectives- Define a measure and a target for one strategic objective- Discuss possible projects to achieve the strategic objectives

• For the “Internal/Processes” perspective, answer the question “To satisfy our customers, what processes must we excel at?”

- Define at most 2 strategic objectives- Define a measure and a target for one strategic objective- Discuss possible projects to achieve the strategic objectives

• For the “Learning & Growth/People” perspective, answer the question “To achieve our vision, how must we learn and improve?”

- Define at most 2 strategic objectives- Define a measure and a target for one strategic objective- Discuss possible projects to achieve the strategic objectives

• Reflection: discuss the challenges of the scorecard exercise; list the three key difficulties your team encountered during this exercise

• Appoint a spokesperson; share with the group

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Barriers to Strategy Implementation• “The execution of strategy is more important, and ore valuable, than

the formulation of strategy.”• “70% of CEO failures came not as a result of poor strategy, but of

poor execution.”• “Only 10% of organizations execute their strategy.”• “Employee empowerment, two-way communication, and information

sharing – executives and managers alike frequently espouse the benefits of these concepts. Talk is cheap. The fact of the matter is that the vast majority of organizations have a long way to go when it comes to getting their most important messages – their vision and strategy – out to their most important constituents: their employees.”

Barriers• Vision barrier: Only 5% of the workforce understands the strategy• People barrier: Only 25% of managers have incentives linked to

strategy• Management barrier: 85% of executive teams spend less than one

hour per month discussing strategy• Resource barrier: 60% of organizations don’t link budgets to strategy

Balanced Scorecard, Paul R. Niven, 2003

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Key elements for successful strategy deploymentIt’s a proven fact that successful change – large or small – requires these four ingredients:• Executive (stakeholder) commitment

- not a simple endorsement, but visible leadership for the initiative

• Organization-wide alignment- Board, executive, all units, individuals and resources

create synergy, pulling in the same direction, toward a common goal: the organization’s vision

- Clear roles and responsibilities for strategy deployment

• Employee engagement- not simple participation, but a hand in developing the

solution• Rigour and discipline of execution

- usually the most difficult to achieve- for most organizations, this means radically changing

how they do things… to get them done!- Plan – Do – Check - Adjust

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• Balanced Scorecard, Step-by-Step for Government and Nonprofit Agencies, Paul R. Niven, Wiley, 2003

• The Balanced Scorecard, Robert Kaplan and David Norton, HBS Press, 1996• Alignment, Robert Kaplan and David Norton, HBS Press, 2006• The Art of War, Sun Tzu• What is Strategy, Michael Porter, HBR November 1996• The Importance of Being Strategic, Michael Porter, HBR November 1996• What is strategy, and does it matter? Richard Whittington• “Are you sure you have a strategy?” Donald C. Hambrick and James W.

Frederickson, Academy of Management Executive, 2001• http://www.bpubs.com/Management_Science/Strategic_Planning/• Balanced Scorecard Institute,

http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx

www.qnet.ca For conference handouts, upcoming events, and more.

Resource List

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Thank you!

For further information, contact:

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________________________________Daniel PerronPractice Leader

Protegra | Business Performance Consulting

Business. Technology. Solutions.Office: 204-487-5678Fax: 204-477-9421www.protegra.com

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