Tip #1: Start with the right content
A well-designed Balanced Scorecard reflects your company’s strategy − so make sure your strategy is clear at the start. If it isn’t, take the time needed to make it clear. The quality of the strategy cascade can only be as good as the quality of the strategy it starts from. Challenge your strategy for inconsistencies and loopholes. A strategy map can be a useful tool for this.
Tip #2: Manage the introduction of the Balanced Scorecard as a change project
The Balanced Scorecard impacts the way your managers manage − so, it demands a change effort from everyone. Increase your success rate dramatically by managing your project as a change effort rather than as a technical introduction.
Tip #3: Managing change requires strong leadership
There is no change without strong leadership. It’s as simple as that. You read this a lot when you look at scorecard tips − and we can confirm that it’s crucial − but the ‘how to’ isn’t included.
The trick is to work on the leadership style elements first. Start from your company’s current leadership framework, or select a new one. The outcome should be a consensus on the behaviour that is needed for operating within a new style and identification of a common and individual process for tackling the gaps.
Tip #4: Communicate process before content
Don’t wait until you have the content ready − start right away by communicating the advantages, project timings, roles and responsibilities of the Balanced Scorecard. Pro-active, no-nonsense communication prevents misunderstandings and creates buy-in. Take a look at some of the communication best-practices in change projects − they’re quite useful.
Tip #5: Be sure you know what you want to achieve
A Balanced Scorecard can serve many purposes. Depending on what you want to achieve, one approach towards introducing it can be more affective than another. But once you have chosen a particular direction, it’s hard to shift to another one. So, do some research on the 3 generations of management control to see some of the options you have.
Tip #6: Avoid classic pitfalls
Many companies have gone through the process of introducing the Balanced Scorecard. It’s a good idea to do some research to get a feeling for your organisation’s particular situation. This will help you avoid some of the classic pitfalls.
Typical mistakes companies make include:
- Senior management is not convinced and shows little commitment
- The scorecards are developed by ‘the happy few’
- The internal/external project members have limited or only theoretical knowledge
- The Balanced Scorecard is only used by top management
- The Balanced Scorecard stays too long in the development stage before it’s launched and used
- There are not enough links to the strategy and planning processes
- The content of the Balanced Scorecard is unrealistic
- The Balanced Scorecard is only used for remuneration purposes