The Balanced Scorecard Manager: A New Profession for the Knowledge Era
Much has been written over the last fourteen years about the Balanced Scorecard. Yet virtually all of the millions of words describe the concept itself and the structural process of cascade and implementation. Remarkably little has been written about the roles and responsibilities of the Balanced Scorecard Manager.
Given that expertise in strategy management is the most critical success prerequisite in the knowledge era, this failure to focus attention on the role of the Balanced Scorecard Manager is a glaring and dangerous oversight. The originators of the scorecard concept, Drs Norton and Kaplan, are beginning to redress the oversight through the promotion of what they call the Office of Strategy Management (1).
The failure to focus attention on scorecard management is a primary reason why Balanced Scorecard programs eventually wither and die within most organizations (irrespective of how successful a tool the scorecard has been). When the BSMS sponsor and/or Balanced Scorecard Manager leave the company, it is common that there are no remaining sufficiently trained or experienced staff members to pick up the reigns of scorecard leadership, management, and change agency at senior and middle levels.
Succession planning is rarely applied to scorecard management positions. This is partly because there is no commonly agreed definition of the standard roles, qualifications, and capabilities of a Balanced Scorecard Manager. Some readers might argue that there should not. Just as the levers for successful strategy implementation are specific to each organization, the managerial skills for facilitating that execution must also be uniquely configured, they might claim.
While to a degree we would concur, we also maintain that conventional functions such as finance and HR have as a background set of skills and competencies that are universal. It is how organizations align those common capabilities to their specific performance requirements that differentiates a world-class function from an also ran.
Based on our analysis of high-performing Balanced Scorecard Managers in industries and sectors as varied as local government, healthcare, transportation, and manufacturing and from locations in North America, Australasia, Asia, and Europe, we have identified the skills, competencies and personal characteristics that make these managers benchmarks in their field. Remarkably, our research finds that a select few hard and soft skills constitute the core capabilities of each of these managers which mean these abilities are transportable.
It might seem unnecessary to state that for a Balanced Scorecard Manager to successfully dispatch their duties they must possess an excellent understanding of the scorecard. But too often the role is filled by a person without more than a cursory knowledge. This is not surprising as organizational leaders often come to the scorecard with an equally vague appreciation.
With the requisite knowledge, the scorecard manager is chiefly responsible for translating vision into results. To do this they must be able to bridge the strategy and operational worlds and feel at ease in each. To move with ease between these worlds, the Balanced Scorecard Manager has to have an excellent understanding of the business and fully understand what the organization is trying to achieve strategically – and why. Business/strategic understanding is crucial for identifying and suggesting appropriate top-level and devolved
Balanced Scorecard managers should also possess a firm grounding in understanding the science of measurement – metrology. To the mantra ‘what gets measured gets done,’ organizations have rushed to populate their management processes with metrics. Yet rarely do these companies invest time in truly understanding the science of measurement. Formulating and applying measures involves concepts such as precision, accuracy and bias. It also calls for knowledge around what drives measures –dependent and independent components.
A further skill is in target setting, most notably being able to facilitate the setting of stretch targets. The manager has to be able to show how the scorecard will track progress towards strategic goals two to three years out. Although the scorecard is a strategy implementation framework, getting across the importance of the longer-term perspective can be a challenge.
The Balanced Scorecard Manager must also be cognizant as to how strategic initiatives will eventually impact performance. They should develop a robust process for initiative rationalization and thus be able to objectively recommend to management teams which ideas should be green-lighted, held in reserve or dismissed.
Furthermore, the scorecard manager must ensure that data is collected according to defined schedules and reported accordingly. And they must ensure that the data and commentary provided is clear, concise and appropriate for decision-making purposes. Smooth processes for data collection and performance reporting brings us to the skill requirement of knowing when and how to deploy a Balanced Scorecard software solution.
For a scorecard manager, a first requirement here is knowing what they want to achieve through scorecard automation. If, for example, there is a requirement to reengineer the whole data infrastructure, then that speaks to one solution. However, if that has been done and the requirement is more geared to generating reports, then that speaks to a different solution.
Possibly the greatest single benefit of scorecard automation is that it enables the placement of scorecard on everyone’s desk. This means that people throughout the world can enter into rich strategic dialogues and at the touch of a button share new strategic learning and best practices. However it enables the rapid dissemination of performance results (as shown on scorecards) across the enterprise, which may not sit well with the existing culture. An organization must decide on the amount of performance transparency it is willing to allow, and the Balanced Scorecard Manager should facilitate this discussion. This will be key in deciding how far down the organization to devolve automated scorecards and how to define security levels.
The Balanced Scorecard Manager must then take charge of the process of vendor selection. Although they should include representatives from IT, the task should not be delegated to IT. The manager should look to identify a solution that meets the organization’s particular strategic management and communication requirements and not something that as a first priority is a perfect fit with present systems or includes myriad, and costly, functionality that may appeal to a technophile but be of little or no interest to organizational managers.
Change Management Skills
Scorecard failure is more likely to be because of cultural reasons, rather than structural or process difficulties. Therefore, contending with the continued cultural and change management challenges of the scorecard is a critical part of the job of the Balanced Scorecard Manager.
Mastery of change management requires a plethora of interlocking skills. It’s important to be good communicators, and be able to do so in a compelling way to different audiences – from the senior executive team to front-line employees. A scorecard manager must be able to communicate and work with the executives to develop the top-down view, and also work with the employee base to sync up the bottom-up knowledge that knowledge workers today possess.
Being a good communicator is key to being an effective facilitator, which is crucial for driving the process of building business unit and devolved Strategy Maps and Balanced Scorecards. Other required change skills are coaching, maintaining the scorecard focus over the longer-term, managing internal politics, and possessing good skills in diplomacy. Therefore, a good scorecard manager will typically possess excellent networking skills.
To conclude, the Balanced Scorecard Manager is fast becoming a key role in organizations looking to ramp up the likelihood of strategic success. Over the coming years, those with the skills described in the article will be among the most sought after of all employee groups.
- Robert Kaplan, David Norton, Office of Strategy Management, Harvard Business Review, October, 2005.
A full description of the Office of Strategy Management can be read in the white paper ‘The Balanced Scorecard Manager: A New Profession for the knowledge era.’