Throughout the business environment it seems that almost every profession has some means of communicating clearly to the end user. However, for people engaged in strategic planning there has been an on-going dilemma. The finished product, the strategic plan, has not been communicated well enough to reach the end user. Strategic plans may be great to look at, full of bar charts, nice covers, well written, and professionally prepared; but they often fall short and fail to impact the people who must execute the strategic plan. The end result has been poor execution of the strategic plan throughout the entire organization; and execution is everything. Upper management creates the strategy, but execution takes place from the bottom up. According to the Balance Scorecard Collaborative, there are four barriers to strategic implementation:
• Vision Barrier – No one in the organization understands the strategies of the organization.
• People Barrier – Most people have objectives that are not linked to the strategy of the organization.
• Resource Barrier – Time, energy, and money are not allocated to those things that are critical to the organization. For example, budgets are not linked to strategy, resulting in wasted resources.
• Management Barrier – Management spends too little time on strategy and too much time on short-term tactical decision-making.
Implementing the Balanced Scorecard as a management tool creates clarity in the communication of strategy. By using measurements and targets, employees can relate to what must happen and the result is higher productivity that results in the achievement of company goals. This is achieved through four strategic objectives:
• Financial – Delivering expected financial results for investors. • Customer – Delivering value and benefits for customers. • Internal Processes – The set of processes that must be in place in order to meet the requirements of customers. • Learning and Growth – the set of values and principles related to intangibles (employees, systems, and organization), supporting and providing the required internal processes.
The financial and customer perspectives represent the deliverables, and the internal processes and learning and growth perspectives represent those things the organization must do.
Balanced Scorecards tell you the knowledge, skills and systems that your employees will need (learning and growth) to innovate and build the right...