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    This interview features Barbara Possin, Vice-President for System Quality and Strategic Alignment of the Minnesota, USA-based St Mary’s/Duluth Clinic Health System (SMDC). The SMDC incorporates 20 clinics, four hospitals and an array of specialty care services  and was inducted into the prestigious Balanced Scorecard Collaborative Hall of Fame in 2002.

    In this interview, drawing from her experience of having facilitated the Balanced Scorecard program in SMDC, Barbara Possin presents a practitioner’s viewpoint regarding various aspects of the Balanced Scorecard concept.

    In the course of a wide-ranging interview, Barbara Possin discusses her years of experience with the Balanced Scorecard, how she got involved with the Balanced Scorecard, the amount of time she commits annually to managing the Balanced Scorecard, the key personal and professional qualities demanded by her role in scorecard facilitation, the training she received, the use of her functional background in managing the Balanced Scorecard program, the nature of senior management backing she received, the major challenges she faced when building and implementing the Balanced Scorecard, how to overcome the challenges, and the system SMDC has in place for managing the Balanced Scorecard. Further, Barbara Possin also tells us what she enjoys most about working with the Balanced Scorecard, how it has benefited her personally and tries to see how her role would evolve 2-3 years down the line. Finally, drawing from her experience, she identifies critical success factors in succeeding as a Balanced Scorecard manager.

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    This article looks at the rationale for designing and implementing pilot projects for introducing the Balanced Scorecard concept in organizations.

    It begins by showing that the ideal text-book scorecard implementation process, which begins with the global organization’s executive committee creating the first Strategy Map and Balanced Scorecard and cascading it down successively to the divisional heads, business unit heads and functional heads to create fully aligned scorecards is an exception rather than the rule. Perhaps less than one in 10 ten scorecard implementations start at the executive table. Rather, typically, the scorecard is piloted at a lower level in the organization before wider adoption.

    The article goes on to discuss the benefits of Balanced Scorecard pilots when organizations are looking at adopting new ways of performance management or strategy management. Drawing from the experiences of organizations like BKK of Norway, Scottish Enterprise, and the Subordinate Courts of Singapore, all of which conducted various kinds of pilot projects, the article highlights the benefits. Pilot projects offer proof of concept, demonstrate efficacy, help market the Balanced Scorecard internally, get senior management’s buy-in, help create awareness, and finally, minimize the impact where there is potential for failure. On this last point, the article argues that the failure of a pilot keeps the door open for later pilots and a possible full rollout at a later date. Finally, the article offers advice on how Balanced Scorecard proponents should choose business units for the scorecard pilot projects, so that the learnings are consistent with the experience when a full rollout takes place.

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    The Balanced Scorecard was introduced in 1992 and has since, given rise to a wealth of material that describes the concept’s preeminence for enterprise performance management (or corporate performance management, as it is also referred to). The material also covers themes like scorecard implementation and cascading the scorecard. However, very little has been written about the roles and responsibilities of the Balanced Scorecard Manager. This article seeks to fill the gap because expertise in strategy management is the most critical prerequisite for success in today’s dynamic business environment. Acknowledging this prerequisite, experts have proposed new concepts like the Office of Strategy Management.

    The article argues that Balanced Scorecard programs eventually wither and die because of a failure to focus attention on scorecard management. Organizations also fail to undertake any succession planning for scorecard management positions. Pointing out that conventional functions like finance and HR have a universal background set of skills and competencies, the articles argues that success depends on how organizations align those common capabilities to their specific performance requirements.

    Anticipating an increasingly key role for Balanced Scorecard Managers in organizational strategy, the article uses an extensive analysis of high-performing Balanced Scorecard Managers in diverse industries and sectors to identify a set of skills, competencies and personal characteristics that make these managers benchmarks in their field. The article classifies findings into groups called Business Skills and Change Management Skills. Some of the capabilities that find inclusion in these two sets of skills are 1) understanding of business, 2) understanding of the science of measurement, 3) an ability for target setting, 4) understanding of data collection processes, 5) understanding of the needs posed by scorecard automation, 6) ability to handle vendor selection, 7) an ability to handle cultural and change  management, and 8) communication.

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    The Commercial Vehicles Business Unit of India-based Tata Motors manufactures the full range of commercial vehicles and is one of the world’s top 10 truck manufacturers.

    Years of poor financial performance had thrown off-track the Unit’s objective of being among the world’s five most profitable commercial vehicle makers. The CVBU developed a strategy for effecting turnaround, creating sustainable growth and profitability. Earlier studies, using the Malcolm Baldrige model, had highlighted the unit’s weakness in strategy deployment. In response, senior managers chose the Balanced Scorecard as the preferred driver of change and strategy implementation tool.

    Implementation began in 2000. Within two years, the CVBU was able to reduce costs, accelerate revenue growth, and move from losses to profits. In addition, the CVBU’s success with the scorecard extended to a place in the Balanced Scorecard Collaborative’s Hall of Fame.

    The CVBU had a high-level Steering Committee, reporting to the ED, for creating a Strategy Map and Balanced Scorecard. A 5-member team facilitated scorecard creation and deployment. Widespread communication was taken up to devolve the scorecard. Later, the CVBU cascaded the Balanced Scorecard to the lowest working levels in the organization. Strategy mapping workshops were run within plants and functions. A review process was put in place for monitoring and analyzing performance on local Balanced Scorecards, of which over 300 were created. As part of the process, lower level scorecards were linked to the higher level scorecards. This helped align the strategic initiatives to the challenges faced by the Unit.

    Today, the CVBU’s top management shares the company’s vision, mission, future directions and strategies, and conducts scorecard cascading workshops. In fact, the entire Unit’s mechanisms (including internal publications and intranet websites) are leveraged to communicate the Balanced Scorecard as a performance management and strategy implementation tool.

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    The Subordinate Courts of Singapore handles over 400,000 cases annually, amounting to 95% of the country’s judicial caseload. In 1997, the then Senior District Judge (equivalent to a CEO) was introduced to the Balanced Scorecard concept at a Harvard Business School program. The concept seemed tailor-made for developing a predictive and proactive measurement and management system.

    In 1998, the Court launched a pilot project to assess the Balanced Scorecard. A Steering Committee reviewed and monitored the scorecard every month. Six months later, the Balanced Scorecard was helping the Court to see what they were doing and how they were doing it. As a two-way system, it was changing the paradigm of communication, performance, monitoring, measurement, and improvement. The leadership was convinced and decided to cascade the scorecard organization-wide.

    Learnings from the pilot were communicated to other divisions, to prepare the organization for a culture change. Full rollout was started in 1999 and achieved in nine months. A scorecard facilitation team incorporated learnings from other public sector scorecard successes like the City of Charlotte, North Carolina, USA and the performance management methods used by various California courts and the National Council of State Courts.

    At the time of full rollout, the scorecard was branded the Justice Scorecard. The scorecard rolled out was a uniquely customized version, with just three new strategic perspectives – community, organizational and employee – reflecting the Subordinate Courts’ goals and core values. The Balanced Scorecard has also succeeded as a framework to integrate the Courts’ unique financial and internal processes objectives, such as the NEV concept that is mandatory for Singapore’s public sector. Singapore Courts believes that the Balanced Scorecard has given employees a superior understanding of the connection between everyday work and the vision and mission. It provides the Courts a bird’s eye view of performance and helps to successfully manage the complex organization that it is. 

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    Scandinavian Bottlers was set up in the late 1990s as a regional bottler for a major soft drinks corporation. From the very start, the management decided to use the Balanced Scorecard as its core strategic management tool because they perceived it as a powerful mechanism to align the company’s vision, goals and strategic initiatives. In fact, the Strategy Map and Scorecard were created before the launch of the organization. Key inputs to the scorecard came from the Annual Business Plans formulated by functional heads.

    Through a workshop for the leadership team, the ABPs are reviewed and objectives, measures and action plans are developed according to the Strategy Map and Balanced Scorecard. This helps the management to identify and prioritize the most important strategic initiatives and also ensure alignment across the functions. The exercise also focused on revenue growth and productivity through strategic initiatives.

    Initial experiences with the Balanced Scorecard proved disappointing. People were seeing the scorecard as a hindrance. The problem was identified as excessive complexity of the Scorecard, which had a total of 94 measures. As a result, managers became busy managing the scorecard rather than managing with the scorecard.

    Management revisited the scorecard and simplified it. Simultaneously, a two-phase Key Business Indicators (KBIs) project was launched. Through these steps, Scandinavian Bottlers arrived at an improved scorecard system, with just 20 indicators. Critical success factors and key initiatives were identified. A separate scorecard was also created for the finance function. This improved and customized scorecard system now helps the company address diverse aspects like value delivered to stakeholders, cost of operations, customer service, profitable volume growth, sales process efficiency, and employee satisfaction and development.

    Scandinavian Bottlers’ experience with the Balanced Scorecard offers key practical guidelines for ensuring continuity, communication and follow-up on Balanced Scorecard initiatives in organizations.

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    One of the world’s leading creative organizations, Saatchi & Saatchi provides solutions to leading clients like Carlsberg, General Mills, Lexus, Procter & Gamble, Sony Ericsson and Visa International.

    In 1997, Saatchi & Saatchi was close to bankruptcy. A new senior management team was appointed to engineer a turnaround. The senior team presented to stakeholders a new vision and a detailed strategic blueprint for recovery, with very ambitious targets for a 3-year timeframe. With survival at stake, the group had only one chance to make the plan work.

    The Worldwide Director’s visits to offices across the world revealed that there was no commonality of purpose or cohesion of identity. At this time, the group’s CFO discovered the Balanced Scorecard at a presentation made by Dr. Kaplan and felt it could be the right tool for the group’s strategy implementation efforts. The top team was convinced and Renaissance Worldwide, headed by Dr. Norton, was appointed as program consultant.

    A Balanced Scorecard Steering Committee, reporting to the executive management team, was appointed. From the outset, the organization ensured that the scorecarding initiative, named CompaSS, was kept simple. A highly focused and simple Strategy Map was developed first.

    The Steering Committee also evolved RASCI, a process to define the roles of different groups. Once the Corporate-level CompaSS was in place, global rollout to the over 45 business units followed. The scorecard also served as a strategic communications tool, sending clear signals about what the group wanted to achieve and what it wanted people to contribute. Management of the units were trained and provided ongoing support to manage with the scorecard. As the management wanted to build a strategy-focused organization, CompaSS had a role in critical aspects like performance planning, communication, organizational culture, budgeting and feedback processes. In short, the scorecard became an essential tool for managing the organization, from setting priorities to allocating resources to managing performance. 

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    In 2006, the Christchurch City Council was the only organization awarded Business Excellence New Zealand’s Performance Excellence Study Award (PESA). Sponsored by the New Zealand Government and businesses, the Award uses the internationally recognized Malcolm Baldrige National Quality Award Criteria.

    The Christchurch City Council has a vision aligned to the city’s vision. To manage performance, the Council has a Balanced Scorecard known as ‘Horizon’ that resonates with the multi-layered performance management horizons and cycles the organization must work to and integrate. Horizon functions as the Council’s business intelligence system, capturing details of performance against strategic and operational plans. Customized for the Council’s context of multiple and competing outcomes, Horizon offers a simple yet highly effective scorecard solution.

    Horizon’s focus on business results and openness helps create an organization-wide, performance-oriented culture. What’s more, going beyond KPIs, Horizon also shows the operational tasks and action programs that support scorecard targets.

    At the strategic level, reporting from Horizon is also customized, leading to a laser-like focus. Experts believe that this focus on inculcating exemplary performance management is driving exceptional results. Surveys show that 70% of Christchurch residents are very satisfied with the city as a place to work, live and play. Customer satisfaction with service at first point of contact is consistently over 95%. What’s more, the Council has maintained a Standard and Poors AA+ rating in delivering these results. The Horizon Balanced Scorecard solution also works in tandem with the Malcolm Baldrige Framework, adding muscle to each of the six Baldrige criteria that lead to outstanding business results (process management, human resources, measurement and knowledge management, customer and market focus, strategic planning, and leadership). Summing up the Christchurch City Council’s experience and success, experts point out that the Council’s implementation of the Balanced Scorecard offers key lessons for achieving scorecarding success.

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    In the 1990s, BKK, a Norwegian producer of electrical power, became a vertically integrated provider and also diversified to capitalize on emerging market opportunities such as broadband services. As a result, BKK faced a challenge in aligning managerial principles and approaches across the group. In response, BKK successfully implemented a bottom-up, group-wide process improvement program, driven by the identification of Critical Success Factors (CSFs) and Key Performance Indicators (KPIs).

    The group also initiated a data warehousing program. Following these initiatives, the group felt a need to drive alignment to the next level, by developing a strategic view of performance. In 2003, BKK introduced the Balanced Scorecard methodology for Enterprise Performance Management. After a successful proof of concept exercise in two group companies, management went group-wide with the methodology. The group chose Corporater’s Balanced Scorecard solution, for its ability to work with the data warehouse and meet other key requirements.

    BKK found that the Corporater solution needed minimal training. Using the solution then, BKK was able to develop superior Strategy Maps than before and create a top-level Balanced Scorecard, with targets and strategic initiatives. Subsequently, using a combination of metrics, checklists and strategic initiatives, the group has tracked strategic objectives. Importantly, BKK was able to use the solution for the different needs of different user groups.

    The Corporater Balanced Scorecard software is linked to BKK’s data warehouse and integrates data from a wide range of sources to generate scorecards. This has given BKK an excellent foundation for enterprise performance management. Further, with the solution, BKK has been able to define and put in place a highly effective plan-action-results-plan cycle. The most important benefit according to BKK is that the solution links metrics to strategy. Looking ahead, BKK is working on giving better shape to strategic initiatives.

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