and I have been friends for several years. His style is a valuable mix
of technicality and simplicity. This particular "Balanced Score Card" is one of the best samples of what I have just
mentioned. I am sure you will find it very illustrative and easy to
understand and use in your implementations.
You can email Bill,
he always answers your questions, and I recommend that you also Visit his
Thank you Bill!
During times of increasing
competition, companies need to be on the constant lookout for competitive
techniques and tools that will help them create and maintain their competitive
Of all the competitive
techniques I implemented while in industry, kaizen and performance management
were by far the most effective. They helped my teams stay focused on getting the
Today, "The Balanced Score Card" is the performance measurement system employed by winners. If
your company wants to stay ahead of their competition, be sure to read this
week's bulletin, "Without data, you're just another opinion."
BALANCED SCORECARD BASICS
"Without data, you're
just another opinion."Financial numbers may tell
us we're winning the war, but it takes performance management to show us how to
focus our energy and efforts to win each of the battles along the way.
Bob Gee, a good friend and
coworker, once said, "You can't control what you don't measure."
Imagine trying to fly an airplane across the country and the cockpit has no
dashboard, no gauges and no idiot lights. You may get it up off the ground but
without performance measurement the chances of getting to where you want to go
are slim to none. Business success may not be a life-death situation but like
piloting an airplane it takes performance management to get you to where you
want to go.
Performance measurement can
be motivational or de-motivational. The individual goal setting of the 80's is a
good example of de-motivational measurement. It tested one individual or group
against the other, and while satisfying some individual egos, it provided little
contribution to company growth and profit objectives.Today, the balanced
scorecard is a performance management system that helps companies pursue their
key success factors. The scorecard uses both internal and external benchmarking
and employs a relevant cascading method of performance goal setting.
Achievements are acknowledged and celebrated on a "real time" basis
and not at the traditional annual review.For a balanced scorecard
process to be motivational it must provide timely and accurate data. Simplicity
is a key to the validity of measurements and the tractability of problems to
their root cause. Data collection design must employ simple and easy to maintain
databases to assure data integrity.
When people are trained in
this process and are permitted to participate in relevant goal setting,
performance management can motivate teams to higher achievements - including the
exceeding of growth and profit expectations.
FIVE KEYS TO
BALANCED SCORECARD SUCCESS
1. Establish a "no status-quo" mind-set - if you're not winning... you're
company "key success factors" - examples:
3. Identify realistic stretch goals that are relevant to the company's "key
training/coaching programs - Education is the pathway to Excellence
5. Celebrate each goal achievements and constantly raise the bar... don't
wait until next year.
For a mature performance
management process, "benchmarking" has become the standard for
establishing performance objectives. Benchmarking is still one of the most
ill-defined management concepts and is one of those words that mean different
things to different people. Our preferred definition comes from Xerox, who
describes benchmarking as: "The continuous process of measuring our
products, services and business practices against the toughest competition and
those companies recognized as industry leaders."The objective of
benchmarking is to build on the ideas of others to improve future performance.
The expectation being that by comparing your processes to best practice - major
improvements can be realized.
You should not consider
carrying out external benchmarking until you have thoroughly analyzed your
internal operations and an effective system of internal measurement has been
WHAT'S IN IT FOR US?
So what kind of results can
you expect when a management team introduces the process of the Balanced Score Card?
People will become motivated
and focused on the continuous improvement of their company's critical success
and team achievements will become recognized and rewarded - creating an
exciting, winning, work environment. Teamwork will improve and employee
retention will rise. Finally, and most important is the company-wide euphoria as
"bottom line" results improve and financial pressures no longer create
a stressful and defensive work environment.