BSC (Balanced Scorecard) Simplified....

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First Time in History, BSC (Balanced Scorecard) Simplified....But still hard to implement....

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irst thing first,  BSC means aligning every employee towards organizational goals and it starts with vision, mission and strategy of the organization. This is not short term initiative but should be focused long term and beyond the vision. 

Elements of strategy,

• Ambition of the organization,
• Arena of operations,
• Products,
• How are you going to differentiate your products?
• How you will operate : alliance , JV  or on your own.

Once the strategy is aligned how are you going to make the strategic map...

You need to make the strategic map of the organization and then deploy the policy...with fixed accountabilities. Be aware that if you do not have the clear vision and strategy and subsequent strategic map BSC has no sense.

Now what is balanced in BSC?

Once the strategic map is ready,  it is converting functional strategic map and then targets....

If you have a five year horizon...what you want to achieve?

Translate it into short term goals...

Based on four perspective

• Customer
• Operational
• Financial
• And people...

So what is balanced in Balance Scorecard?

• Short term VS long term,
• Strategic map vs tactical planning and implementation,
• Four perspective takes care of whole organizational context.

Based on this once you converted all this in matrix called organizational scorecard and then functional scorecard....which can be assigned to individual employees as KRA and KPI.

Please remember to establish the monitoring system.

BSC fails because when there are some business turmoil. Owners gets panic instead of making changes in strategic plan.

Then it becomes just KRA sheet based on four perspective.

Today most of the organizations says that they have BSC but is just KRA sheet based on 4 perspective without long term strategy, map and key drivers. It is not at all BSC.

Implementation : Let's take step by step

1. Study of the market, key driver for growth are find out and based on that it is decided where the organization would like to go by 5 years 10 years etc.
2. What you would like be in the market and how?
3. Make a strategic intents. This is utmost imp phase.
4. Few questions should be asked like are we prepared for.
5. Are we  Serious?
6. Commitment of top in terms of strategic intents,
7.  Prepare complex strategic map,
8. Convert it into long term goals,
9. Convert it in short term targets,
10. Make organizational scorecard,
11. Prepare Functional scorecards,
12. Convert Scorecards into Individual targets,
13. Establish monitoring system

What is complete strategy?

·         It is sustainable,

·         It addresses the cross boundaries of functions,

·         It is linked with external environment,

Example: If you have strategy focused to 2020 and targets thereon, how HR can have its own strategy linked to the same. The assessment of the organization is for example you need Intrapreneural skillsets and there is a gap..

Then your HR strategic map should have this element.

This can be linked to other functions as well.

And then with this all you need to work on change management and handle this accordingly.

Review strategy periodically;

Stick to the commitment.

About reporting....you can have a dedicated business warehouse software...

However moreover from performance point of view...

You can have... proper review mechanism like

• Business performance review,
• Operation performance review etc....

The challenge is to extract the right data for discussion in these types of meeting.

It is better to automate high level data through SAP etc.

BSC is change management process.

Somebody senior Management Team member should take the responsibility of policy deployment leader...who also works as a change champion.  Sensitization is also required with right branding and communication associated with strong reward and consequence management policy.

BHAG



BHAG is impossible but attainable goal statement.



Frankly speaking, I was not aware what “BHAG” means till 2007. When I was involved in implementing Balanced Scorecard in my previous organization, I came to know this terminology during one initial workshop on Balanced Scorecard. Off course, Balanced Scorecard has not directly related to BHAG, but has some connection.  I like it very much and read more about the same.  This terminology was first used by Jim Collins and Jerry Porras in their book, Built to Last: Successful Habits of Visionary Companies. They encourage organizations to develop a “big, hairy, audacious goal” (BHAG, pronounced bee-hag)—a bold strategic vision statement that has powerful emotional appeal. Balanced Scorecard is also based on the strong vision.

BHAGs help infuse work with meaning by articulating the goals of the organization in a way that connects emotionally with peoples’ values.

The term itself connotes that the goals are very ambitious for the world and are questionable but not impossible. However people in the organization should be connected to the statement. Sometimes this may create confusion among employees. They may perceive the goals unattainable and the whole purpose of the BHAG goals may defeat.  

In one organization, the BHAG goals were translated into 5- years plan, however people were not aware about the logic of deciding these goals. Company hired consultants. Consultants did their job. They did market research and analysis; put the data in big presentations; however different business heads were not convinced on their Goals. Managing Director was pushy, however whole exercise went wrong. It could not work. In such scenario, such BHAG statements may extravagant, containing little relevance or meaning for people.

The BHAG should be more strategic and emotionally compelling to people. It helps to align employees towards business. Typical BHAG applies whole organization and has 10-20 year long ambition. It requires thinking beyond the current capabilities and hence it is very difficult to connect all the demographics of the organization.  

Just imagine Bill Gate’s dream “A computer in every home.”  If Bill Gate would not have been given the clear vision statement, would Microsoft have been there today.  Generally people don’t dislike work; companies need to help them to understand mutual objectives. They will drive themselves to unbelievable excellence, as rightly said by Bim Black.

In 1990, Wal- Mart had seen the same dream and they become 125 billion -company by 2000.  During 1900, Henry Ford dreamt to “democratize the automobile.” However there are certain companies, which were totally focus towards crushing their competitor as Nike farmed the BHAG statement in 1960. Their BHAG goal was “to crush the Adidas.”(!)

Primarily all these Goals were perceived impossible by the external world, but internally they sensitize all the resources towards their Goals. In most of the cases, they succeeded.  

Leadership is to provide this BHAG vision to the organization and employees at large. And hence leadership means also dreaming big and translating the impossible dream in achievable goals.