Description
The balanced scorecard methodology builds on some key concepts of previous management ideas such as Total Quality Management (TQM), including customer-defined quality, continuous improvement, employee empowerment, and -- primarily -- measurement-based management and feedback.
Balanced Scorecard
The balanced scorecard is a new management concept which helps managers at all levels
monitor results in their key areas. An article by Robert Kaplan and David Norton entitled "The
Balanced corecard ! "easures that Drive #er$ormance" in the %arvard Business Review in
&''( sparked interest in the method) and led to their business bestseller) "The Balanced
corecard* Translating trategy into Action") published in &''+.
There,s nothing new about using key measurements to take the pulse o$ an organi-ation. .hat,s
new is that Kaplan and Norton have recommended broadening the scope o$ the measures to
include $our areas*
• $inancial per$ormance)
• customer knowledge)
• internal business processes)
• learning and growth.
This allows the monitoring o$ present per$ormance) but also tries to capture in$ormation about
how well the organi-ation is positioned to per$orm well in the $uture.
Kaplan and Norton cite the $ollowing bene$its o$ using the balanced scorecard*
• /ocusing the whole organi-ation on the $ew key things needed to create breakthrough
per$ormance.
• %elping to integrate various corporate programs) such as 0uality) re!engineering) and
customer service initiatives.
• Breaking down strategic measures to local levels so that unit managers) operators) and
employees can see what,s re0uired at their level to roll into e1cellent per$ormance overall.
Similarity to Hoshin Planning
The balanced scorecard has strong similarities to %oshin #lanning or hoshin kanri) the
organi-ation!wide strategic planning system used widely in 2apanese companies. Both seek
breakthrough per$ormance) alignment) and integrated targets $or all levels. The balanced
scorecard suggests which speci$ic areas should be measured $or a balanced picture) but this
isn,t contradictory to %oshin #lanning. 3ne thing that the 2apanese emphasi-e is "catchball") the
process o$ give and take between levels that helps to de$ine strategy in 2apanese companies.
The balanced scorecard method seems to be more o$ a one!way street !! the e1ecutive team
creates the strategy) and it cascades down $rom there.
One cautionary note
4ou tend to get what you measure $or) since people will work to achieve the e1plicit targets
which are set. Dr. Deming $eared this e$$ect) noting that people would skew their work to meet
particular incentive pay targets. /or e1ample) emphasi-ing traditional $inancial measures tends
to encourage short!term thinking ! like rigging shipping schedules to make the monthly sales
look good) or aggressively discounting to meet year!end targets. Kaplan and Norton) recogni-ing
this) urge a more balanced set o$ measurements) which is good. 5ven so) people will work to
achieve their scorecard goals) and may ignore important things which are not on the scorecard.
3r) i$ the scorecard is not re$reshed o$ten enough) what looked like an important goal in 2anuary
may not be very germane in 2une. Kaplan and Norton recogni-e these risks) and they don,t
pretend that they have said the $inal word on scorecards.
Balanced Scorecard
The balanced scorecard $orces managers to look at the business $rom $our important
perspectives. 6t links per$ormance measures by re0uiring $irms to address $our basic 0uestions*
7a8 %ow do customers see us9 ! :ustomer perspective
7b8 .hat must we e1cel at9 ! 6nternal perspective
7c8 :an we continue to improve and create value9 ! 6nnovation ; learning perspective
7d8 %ow do we look to shareholders9 ! /inancial perspective
Balanced Scorecard
The Balanced corecard is a management tool to mobili-e employees to $ul$ill the
mission o$ the organi-ation. 6t is $ounded on principles developed by Robert .
Kaplan and David #. Norton) and published in their book) The Balanced
corecard* Translating trategy into Action.
The scorecard is a method o$ designing) organi-ing and communicating
per$ormance measures across multiple perspectives 7i.e. customer) $inancial)
business process and learning and growth8) utili-ing both short and long term time
hori-ons. The scorecard conveys the strategic plan to organi-ation members) and
it monitors each perspective simultaneously so that each perspective
continuously supports the strategic plan.
The scorecard is an analysis techni0ue to translate an organi-ation,s mission
statement and overall business strategy into speci$ic) 0uanti$iable goals and to
monitor the organi-ation,s per$ormance in terms o$ achieving these goals. The
Balanced corecard is an integral part o$ 3#<.
Measures
At its simplest) measures are the 0uanti$ication o$ an action or activity. Di$$erent
measurements occur at di$$erent organi-ational levels. ome measurements are
lagging) and some measurements are leading* A good scorecard has a balance
o$ both. Both outcomes and per$ormance drivers should be included in each
business unit,s balanced scorecard.
• Outcomes are lagging indicators) and are the $inal results o$ all o$ an
organi-ation,s products and services. 51amples would be* enhanced
mobility) sa$e drinking water) and increasing the 0uantity and 0uality o$
open space.
• Performance drivers) also known as leading indicators or inputs) are
measures that are uni0ue to each organi-ation or business unit.
#er$ormance drivers and inputs measure the employee and unit activities)
which in turn) result in outcomes.
Perspectives of the Balanced Scorecard:
Businesses too $re0uently use only $inancial and process measures to evaluate
their per$ormance. The balanced scorecard approach broadens the measurement
o$ per$ormance by looking at work $rom multiple perspectives*
• customer perspective
• $inancial perspective
• business process perspective
• learning and growth perspective
Best practices of the Balanced Scorecard include:
• "easure per$ormance o$ all strategic goals
• "aintain a balanced set o$ measures
• #eople are held personally accountable $or results
• Develop solid baseline data
• "atch resources to goals and ob=ectives
Effective measures should be:
• Aligned with enterprise strategy.
• upported by leadership.
• :lear and understandable.
• A balance o$ lagging and leading indicators.
• >inked to individuals and?or teams) with organi-ational goals in!sight.
• A centerpiece o$ the management process.
Barriers to successful measurement include:
• 6nability to reach consensus on goals or measures.
• 6nsu$$icient involvement o$ end users o$ the measurement system.
• Routine habits) in$le1ible processes) cherished systems) and static culture
are all obstacles to success$ul measurement.
• /ear or unwillingness to change.
• "easuring what is easy or known) rather than identi$ying what needs to be
measured.
Cause-and-effect relationships:
"5very measure selected $or a Balanced corecard should be an element o$ a
chain o$ cause!and!e$$ect relationships that communicates the meaning o$ the
business unit,s strategy to the organi-ation."
-- The Balanced Scorecard, Kaplan and Norton
(p. 149)
Learning more about the Balanced Scorecard
The book) The Balanced corecard* Translating trategy into Action) by Robert .
Kaplan and David #. Norton is a great starting point to learn more about
perspectives and measures.
3ther sources $or learning may be $ound on the internet. :lick this link $or more
in$ormation about on!line learning opportunities.
The customer perspective:
.ho is your customer9 .hat services or products do they e1pect $rom you9
%ow do you listen to and learn $rom your customer9 %ow do you retain and
ac0uire new customers9 %ow do you meet your customers needs9 %ow do you
measure customer satis$action and dis!satis$action9
The financial perspective:
There is a broad range o$ traditional $inancial 0uestions that can be asked. The
0uestions can address short and long!term time hori-ons. Depending upon the
standards in your industry) return on investment 7R368) revenue enhancement
and growth) risk) and improved productivity are all reasonable $inancial
measures. The measures $rom other scorecard perspectives should be linked in
a cause!and!e$$ect relationship towards achieving the desired $inancial
outcomes.
The business process perspective:
.hat products or services will your customers value in the $uture9 .hat
processes best deliver the outcomes desired by the customers9 >ooking into the
$uture) what are the new business processes that you must e1cel at9 .hat will
be valued in the $uture) and how will innovation deliver $uture values9
The learning and growth perspective:
The learning and growth perspective supports the other three perspectives.
@ltimately) i$ the work$orce is not enabled with knowledge) innovation and
advanced skill sets) the work$orce will be unable to build and enhance innovative
business processes) that in!turn will help retain and ac0uire new customers) and
ultimately achieve $inancial ob=ectives.
"A core group o$ three employee!based measures!!satis$action)
productivity and retention!!provide outcome measures $rom
investments in employees) systems and organi-ational alignment."
-- The Balanced Scorecard, Kaplan and
Norton (p. 146)
What is the Balanced Scorecard?
A new approach to stategic management was developed in the early 1990's by Drs.
Robert Kaplan (Harvard !siness "chool# and David $orton (alanced "corecard
%ollaborative#. &hey named this system the 'balanced scorecard'. Recogni'ing
some o( the wea)nesses and vag!eness o( previo!s management approaches* the
balanced scorecard approach provides a clear prescription as to what companies
sho!ld meas!re in order to 'balance' the +nancial perspective.
&he balanced scorecard is a management system (not only a meas!rement
system# that enables organi'ations to clari(y their vision and strategy and translate
them into action. ,t provides (eedbac) aro!nd both the internal b!siness processes
and e-ternal o!tcomes in order to contin!o!sly improve strategic per(ormance and
res!lts. .hen (!lly deployed* the balanced scorecard trans(orms strategic planning
(rom an academic e-ercise into the nerve center o( an enterprise.
Kaplan and $orton describe the innovation o( the balanced scorecard as (ollows/
0&he balanced scorecard retains traditional +nancial meas!res. !t
+nancial meas!res tell the story o( past events* an ade1!ate story (or
ind!strial age companies (or which investments in long2term capabilities
and c!stomer relationships were not critical (or s!ccess. &hese +nancial
meas!res are inade1!ate* however* (or g!iding and eval!ating the
3o!rney that in(ormation age companies m!st ma)e to create (!t!re
val!e thro!gh investment in c!stomers* s!ppliers* employees*
processes* technology* and innovation.0
&he balanced scorecard s!ggests that we view the organi'ation (rom (o!r
perspectives* and to develop metrics* collect data and analy'e it relative to each o(
these perspectives/
• The Learning and rowth Perspective
• The Business Process Perspective
• The Customer Perspective
• The !inancial Perspective
The Balanced Scorecard and Measurement-Based
Management
&he balanced scorecard methodology b!ilds on some )ey concepts o( previo!s
management ideas s!ch as &otal 4!ality 5anagement (&45#* incl!ding c!stomer2
de+ned 1!ality* contin!o!s improvement* employee empowerment* and 22 primarily
22 meas!rement2based management and (eedbac).
Double-Loop Feedback
,n traditional ind!strial activity* 01!ality control0 and 0'ero de(ects0 were the
watchwords. ,n order to shield the c!stomer (rom receiving poor 1!ality prod!cts*
aggressive e6orts were (oc!sed on inspection and testing at the end o( the
prod!ction line. &he problem with this approach 22 as pointed o!t by Deming 22 is
that the tr!e ca!ses o( de(ects co!ld never be identi+ed* and there wo!ld always be
ine7ciencies d!e to the re3ection o( de(ects. .hat Deming saw was that variation is
created at every step in a prod!ction process* and the ca!ses o( variation need to be
identi+ed and +-ed. ,( this can be done* then there is a way to red!ce the de(ects
and improve prod!ct 1!ality inde+nitely. &o establish s!ch a process* Deming
emphasi'ed that all b!siness processes sho!ld be part o( a system with (eedbac)
loops. &he (eedbac) data sho!ld be e-amined by managers to determine the ca!ses
o( variation* what are the processes with signi+cant problems* and then they can
(oc!s attention on +-ing that s!bset o( processes.
&he balanced scorecard incorporates (eedbac) aro!nd internal b!siness process
outputs* as in &45* b!t also adds a (eedbac) loop aro!nd the outcomeso( b!siness
strategies. &his creates a 0do!ble2loop (eedbac)0 process in the balanced scorecard.
Outcome Metrics
8o! can't improve what yo! can't meas!re. "o metrics m!st be developed based on
the priorities o( the strategic plan* which provides the )ey b!siness drivers and
criteria (or metrics managers most desire to watch. 9rocesses are then designed to
collect in(ormation relevant to these metrics and red!ce it to n!merical (orm (or
storage* display* and analysis. Decision ma)ers e-amine the o!tcomes o( vario!s
meas!red processes and strategies and trac) the res!lts to g!ide the company and
provide (eedbac).
"o the val!e o( metrics is in their ability to provide a (act!al basis (or de+ning/
• Strategic feedback to show the present status of the organization from many perspectives for
decision makers
• Diagnostic feedback into various processes to guide improvements on a continuous basis
• Trends in performance over time as the metrics are tracked
• Feedback around the measurement methods themselves, and which metrics should be
tracked
• Quantitative inputs to forecasting methods and models for decision support systems
Management by Fact
&he goal o( ma)ing meas!rements is to permit managers to see their company more
clearly 22 (rom many perspectives 22 and hence to ma)e wiser long2term decisions.
&he aldrige %riteria (199:# boo)let reiterates this concept o( (act2based
management/
05odern b!sinesses depend !pon meas!rement and analysis o(
per(ormance. 5eas!rements m!st derive (rom the company's strategy
and provide critical data and in(ormation abo!t )ey processes* o!tp!ts
and res!lts. Data and in(ormation needed (or per(ormance meas!rement
and improvement are o( many types* incl!ding/ c!stomer* prod!ct and
service per(ormance* operations* mar)et* competitive comparisons*
s!pplier* employee2related* and cost and +nancial. Analysis entails !sing
data to determine trends* pro3ections* and ca!se and e6ect 22 that might
not be evident witho!t analysis. Data and analysis s!pport a variety o(
company p!rposes* s!ch as planning* reviewing company per(ormance*
improving operations* and comparing company per(ormance with
competitors' or with 'best practices' benchmar)s.0
0A ma3or consideration in per(ormance improvement involves the
creation and !se o( per(ormance meas!res or indicators. 9er(ormance
meas!res or indicators are meas!rable characteristics o( prod!cts*
services* processes* and operations the company !ses to trac) and
improve per(ormance. &he meas!res or indicators sho!ld be selected to
best represent the (actors that lead to improved c!stomer* operational*
and +nancial per(ormance. A comprehensive set o( meas!res or
indicators tied to c!stomer and;or company per(ormance re1!irements
represents a clear basis (or aligning all activities with the company's
goals. &hro!gh the analysis o( data (rom the trac)ing processes* the
meas!res or indicators themselves may be eval!ated and changed to
better s!pport s!ch goals.0
The Balanced Scorecard -- Not Just Another
Project
© aul !rveson "##$
5anagers in many government agencies have been reared on pro3ect management.
,t is the way they thin) abo!t achieving their mission. ,n the De(ense Department*
pro3ect or program management has been the (ramewor) (or development o( every
system costing (rom ten tho!sand dollars to ten billion dollars. &here is a long2
established tradition o( on2the23ob training and e-perience (or yo!ng people to learn
and be mentored by e-perienced pro3ect managers. 5any g!ideboo)s* man!als*
so(tware programs* and other means have been devised to aid the pro3ect manager.
9ro3ect management has been in the management c!lt!re (or decades* and
the (ederal government has tho!sands o( pro3ect managers who are ro!tinely
capable o( ama'ingly comple- achievements. ,n (act* many pro3ect managers may
have never seen or cosidered any other way to get things done.
Altho!gh it is not necessary here to describe pro3ect management in detail* a simple
diagram will help to show its general (eat!res.
&he +g!re represents a time line or <A$&& chart. All pro3ects (or programs# have a
de+nite start time (green# and a de+nite stop time (red# when the +nal deliverables
(prod!cts* services* doc!ments* decisions* etc.# are delivered to the c!stomer. &he
goal is to meet c!stomer re1!irements. &he initial stage re1!ires establishment o( a
precise b!dget and a plan o( action and milestones (9=A>5#. &he wor) is (oc!sed on
the act!al mission o( prod!ction !nderta)en (or the c!stomer. ,t may be bro)en
down into a hierarchy o( s!btas)s* called an ?ngineering "ched!le .or) rea)down
"tr!ct!re (?"."#. "tat!s and review meetings are sched!led at reg!lar intervals
thro!gho!t the pro3ect. @s!ally some )ind o( +nal report is written as one o( the
deliverables. &he goal is to reach the end point on time and within b!dget* since
there are !s!ally other pro3ects that are depending on inp!t (rom the deliverables o(
this pro3ect. "o pro3ect management is the e6ort to manage wor) within a +nite*
clearly scoped* hierarchically2str!ct!red* linear development process with a de+nite
beginning and end.
The balanced scorecard management system is not just another project. ,t
is (!ndamentally di6erent (rom pro3ect management in several respects. &o ill!strate
the radical nat!re o( this di6erence* a diagram is shown o( the "% per(ormance
meas!rement process* as it wo!ld r!n when installed in an organi'ation.
&he +rst thing to notice is the topology/ the balanced scorecard management
process* derived (rom Deming's &otal 4!ality 5anagement* is a continuous
cyclical process. ,t has neither beginning nor end. ,ts tas) is not directly concerned
abo!t the mission o( the organi'ation* b!t rather with internal processes (diagnostic
meas!res# and e-ternal o!tcomes (strategic meas!res#. &he system's control is
based on per(ormance metrics or 0metadata0 that are trac)ed contino!sly over time
to loo) (or trends* best and worst practices* and areas (or improvement. ,t delivers
in(ormation to managers (or g!iding their decisions* b!t these are sel(2assessments*
not c!stomer re1!irements or compliance data.
9eople trained only in pro3ect management may have di7c!lty in +g!ring o!t how to
accomplish the "%* simply beca!se it is s!ch a di6erent )ind o( management
paradigm. =ne o( the )ey practical di7c!lties is to +g!re o!t how to get the process
started in the +rst place. ,( this is not a pro3ect* where does one beginA .hat )ind o(
plan is appropriate (or deployment o( the balanced scorecard systemA
,( we want to ride a rotating merry2go2ro!nd* we had better not attempt to 3!st hop
on. .e will probably get h!rt 22 and won't get on. &he sit!ation is similar with the
balanced scorecard. &o get on the merry2go2ro!nd* we have to accelerate in the
same direction (or awhile* then hop on when o!r speed e1!als that o( the circ!lar
Boor. ,n other words* there needs to be a ramp-up phase* where everyone 0comes
!p to speed.0 &his incl!des training or retraining o( pro3ect managers* and probably
(oc!sed deployment o( pilot eforts be(ore attempting to cover an entire large
agency. "!stained* patient leadership will be needed be(ore the payo6 is attained.
Management Approaches
© aul !rveson "##$
<overnment agencies cannot live by pro3ect management alone. %ongress* in the
<9RA* the ?-ec!tive ranch in the Reinventing <overnment initiative* and DoD
"ecretary %ohen in the De(ense Re(orm ,nitiative* are as)ing !s to +nd ways to
increase prod!ctivity and e7ciency* while maintaining mission e6ectiveness. &hat is
where the new management approaches come in 22 they are more applicable than
pro3ect management to the )inds o( internal improvements that are needed.
&he table below s!mmari'es comparisons o( three di6erent management
approaches or methodologies. &he comparisons are shown (or several di6erent
(eat!res. ,t is evident (rom this comparison that 9, and the alanced "corecard are
1!ite di6erent in most respects (rom pro3ect management. &hey have di6erent
p!rposes and meet di6erent needs.
Project
Management
Business Process
Improvement
Balanced Scorecard
Age of
Approach
Decades egan in DoD 199C egan in 1990
Prime
Customer
?-ternal "ponsor ,nternal Director
?-ternal ,<* ,nternal
Director
oal
!e"nition
9ro3ect Re1!irements*
5ission $eeds
%ost* cycle time
red!ctions
"trategic management
system
"tatement
#ocus &echnical 5ission !siness 9rocesses 5!ltiple perspectives
Scope "peciali'ed !nit !nit to enterprise !nit to enterprise
Plans
9lan o( Action >
5ilestones
9rocess ,mprovement
9lan
"trategic 9lan*
9er(ormance 9lan
Schedule
.or) rea)down
"ched!le* Action
,tems
&eam directed
&eams* CD2month
sched!le (rom "% boo)
Managemen
t Activities
&eam b!ilding*
!dgeting* &as)
&rac)ing* Reviews
aseline process
analysis* to2be process
design* a!tomation
De+ne metrics* collect
data* analy'e data*
decide on changes
Tools $see
lin%s&
5icroso(t 9ro3ect*
9rimavera
&!rbo9R* ,D?E0
9AR2F* <entia* intranet
G database
Measures of
success
Deliverables on time*
on b!dget
%ost red!ctions min!s
cost o( 9, e6ort
4!antity o( data*
improved res!lts on
many metrics
,n attempting to implement the newer management methodologies in a traditional
pro3ect management organi'ation* there are two possible options/
"% train the managers in the new approaches and techni&ues'
(% translate the new approaches into familiar pro)ect form, and treat them as conventional
pro)ects%
=ption 1 is always recommended. &he problem with that is that we do not have the
time or money to spend on a lot o( training in new techni1!es.
=ption C is something that hasn't been s!ggested be(ore* to my )nowledge. , don't
)now i( it is (easible* or even i( it ma)es sense. !t i( it co!ld be done* it wo!ld save
a lot o( time in deploying the new initiatives.
=ption C was act!ally s!ggested by the DoD's 199H 9er(ormance 9lan* in which one
o( the top level mission goals was '%ost Red!ction'. ,n other words* the DoD
management recogni'es that this is in itsel( worthy o( being a strategic goal on the
level o( its other missions* not 3!st an internal e7ciency need.
Selecting a Management Approach
© aul !rveson "##$
=ne o( the reasons why managers are having s!ch di7c!lty in applying
management methods to government problems is this/ there are many di6erent
schools o( tho!ght on management approaches* and each o( these schools has its
own proponents. <enerally* an original proponent ma)es his or her name in that
partic!lar concept* and becomes an 'e-pert' and a 'g!r!' o( it. &here is little
incentive to integrate this one approach with others.
&hat 3ob is le(t to the poor managers who have to +g!re o!t how to apply what
theory to their b!siness problems. &hey have heard something abo!t 5=* &45*
9R* ,"=29000* %55* A%* "%* and all the other b!'' words and acronyms o(
management 22 b!t they have received precio!s little g!idance as to what to select
that best +ts their b!siness needs* and the top2level re1!irements s!ch as the <9RA.
@s!ally* however* managers will tend to !se the approach with which they are most
(amiliar* which is probably pro3ect management or program management.
At any point in time* management c!lt!re tends to be dominated by one school o(
tho!ght. %!rrently an emerging idea is the 'balanced scorecard'. &he boo) on this
theory by Kaplan and $orton is c!rrently one o( the top 10 best sellers in the +eld.
5anagement cons!ltants and writers tend to adopt the theory that is c!rrently in
vog!e* and its pop!larity th!s tends to grow rapidly to a pea)* !ntil it is s!perseded
by the ne-t new idea. &he schools come and go appro-imately every 10 years. A
similar phenomenon seems to ta)e place in other social sciences* s!ch as
psychology* sociology* and ed!cation.
&homas K!hn's boo) The Structure of Scientifc Revolutions analy'ed this
phenomenon. Altho!gh its concl!sions may be ta)en too (ar* the general description
o( the process seems tr!e eno!gh/
"% ! revolutionary new idea comes out of the blue, and champions and followers arise to
promote it%
(% ! school of thought and literature arises around the sub)ect%
*% The idea becomes so popular that it becomes part of the +establishment+% ,ts view is
un&uestioned and it dominates the scene for awhile%
-% !nomalies, countere.amples and new ideas emerge that cause the original idea to be deeply
&uestioned%
/% ! period of conflict between proponents and opponents prevails%
0% 1ne of the new ideas takes over the field, e.cept for a few die2hards who have little but
historical influence%
3% The old idea may not be forgotten, but is absorbed into the new idea as a +special case+ or a
+useful fiction+ that may be helpful in certain situations% 4This appears to be the current status
of Freudian theory within psychotherapy, for e.ample5%
Management #le'i(ilit)
A manager who only has e-perience in one approach* s!ch as pro3ect management*
may have di7c!lty in adapting to changing demands. A manager can be m!ch more
e6ective i( he or she is able to select a management approach that is most
appropriate to the desired need or goal. &his adaptability or 'eclectic' Be-ibility may
prove very !se(!l in the changing government management environment.
&here is no good reason why managers m!st (ollow the latest school o(
management tho!ght. =n the other hand* 3!st beca!se an idea is new does not
mean that it sho!ld be dismissed. &here are reasons why one partic!lar approach is
better than another depending on the strategic goal or need. &he alanced
"corecard* (or instance* appears to be a very appropriate techni1!e (or meeting the
!rgent management needs o( many <overnment agencies* s!ch as their need to
comply with the re1!irements o( the <9RA. However* this need sho!ld not blind
managers to other* perhaps even more pressing goals o( their organi'ation that may
re1!ire a di6erent approach.
&he (ollowing table was developed to aid in selection o( a management approach*
depending on the conditions and need o( the organi'ation (strategic goal#. &he
conditions will partly determine the best option. (&he terms are de+ned here.#
Time
*ori+on
$)ears&
Strategic oal
Change
,eadiness
Technical
-evel
,is%
Tolerance
,ecommended
.ption
C2I <9RA %ompliance 5oderate High 5oderate
alanced
"corecard
I2D
JI0K cost
red!ctions*
s!rvival
High High High 9R
12I
C0K %ost
red!ctions
5oderate 5oderate 5oderate 9,
Long term
%ontin!o!s
improvement
5oderate 5oderate Low &45
C2I
aldrige score
elevation
5oderate High Low
alanced
"corecard G A%
C2M
"trategic
alignment
Low 5oderate 5oderate
alanced
"corecard
C2M
5ar)eting
credibility
Low Low 5oderate
,"=29000*
incremental
C2M
,ncreased
capabilities
5oderate High Low %55
$ote that not all possible combinations o( conditions are incl!ded in the table. ,(
yo!r conditions are beyond the levels indicated here (e.g. low ris) tolerance when
I0K cost red!ctions are needed#* then it is li)ely that a 'best option' does not e-ist
(or yo!r sit!ation. 8o! may need to gain additional senior management s!pport and
tolerance (or ris) be(ore cond!cting strategic activities.
Details abo!t each o( these approaches may be (o!nd in boo)s and at web sites
listed in the Lin)s.
What is HR Scorecard.com?
HR "corecard.com is an online* 1!estionnaire2based s!rvey instr!ment which
e-amines the internal wor)ings o( an organisation and identi+es bloc)ages to
growth. Developed by the %entre (or =rganisational ,nnovation 9ty Ltd* and based
on the alanced "corecard* it meas!res employee attit!des to the three )ey areas o(
organisational e6ectiveness N strategic intent* b!siness processes and
c!lt!re;behavio!r.
HR "corecard.com has been designed to give yo! timely* acc!rate in(ormation to
help yo! manage the growth o( yo!r b!siness. ,ts delivery thro!gh a sec!re*
password protected web site means that data collection and analysis is simple and
(ast.
?mployees can complete HR "corecard.comOs con+dential s!rvey anywhere where
they can access the internet N (rom their des)s* at their home or even in an internet
ca(P. &he con+dential* anonymo!s nat!re o( the s!rvey means employees (eel they
can answer tr!th(!lly* which gives yo! power(!l data abo!t the health o( yo!r
organisation.
doc_803141376.doc
The balanced scorecard methodology builds on some key concepts of previous management ideas such as Total Quality Management (TQM), including customer-defined quality, continuous improvement, employee empowerment, and -- primarily -- measurement-based management and feedback.
Balanced Scorecard
The balanced scorecard is a new management concept which helps managers at all levels
monitor results in their key areas. An article by Robert Kaplan and David Norton entitled "The
Balanced corecard ! "easures that Drive #er$ormance" in the %arvard Business Review in
&''( sparked interest in the method) and led to their business bestseller) "The Balanced
corecard* Translating trategy into Action") published in &''+.
There,s nothing new about using key measurements to take the pulse o$ an organi-ation. .hat,s
new is that Kaplan and Norton have recommended broadening the scope o$ the measures to
include $our areas*
• $inancial per$ormance)
• customer knowledge)
• internal business processes)
• learning and growth.
This allows the monitoring o$ present per$ormance) but also tries to capture in$ormation about
how well the organi-ation is positioned to per$orm well in the $uture.
Kaplan and Norton cite the $ollowing bene$its o$ using the balanced scorecard*
• /ocusing the whole organi-ation on the $ew key things needed to create breakthrough
per$ormance.
• %elping to integrate various corporate programs) such as 0uality) re!engineering) and
customer service initiatives.
• Breaking down strategic measures to local levels so that unit managers) operators) and
employees can see what,s re0uired at their level to roll into e1cellent per$ormance overall.
Similarity to Hoshin Planning
The balanced scorecard has strong similarities to %oshin #lanning or hoshin kanri) the
organi-ation!wide strategic planning system used widely in 2apanese companies. Both seek
breakthrough per$ormance) alignment) and integrated targets $or all levels. The balanced
scorecard suggests which speci$ic areas should be measured $or a balanced picture) but this
isn,t contradictory to %oshin #lanning. 3ne thing that the 2apanese emphasi-e is "catchball") the
process o$ give and take between levels that helps to de$ine strategy in 2apanese companies.
The balanced scorecard method seems to be more o$ a one!way street !! the e1ecutive team
creates the strategy) and it cascades down $rom there.
One cautionary note
4ou tend to get what you measure $or) since people will work to achieve the e1plicit targets
which are set. Dr. Deming $eared this e$$ect) noting that people would skew their work to meet
particular incentive pay targets. /or e1ample) emphasi-ing traditional $inancial measures tends
to encourage short!term thinking ! like rigging shipping schedules to make the monthly sales
look good) or aggressively discounting to meet year!end targets. Kaplan and Norton) recogni-ing
this) urge a more balanced set o$ measurements) which is good. 5ven so) people will work to
achieve their scorecard goals) and may ignore important things which are not on the scorecard.
3r) i$ the scorecard is not re$reshed o$ten enough) what looked like an important goal in 2anuary
may not be very germane in 2une. Kaplan and Norton recogni-e these risks) and they don,t
pretend that they have said the $inal word on scorecards.
Balanced Scorecard
The balanced scorecard $orces managers to look at the business $rom $our important
perspectives. 6t links per$ormance measures by re0uiring $irms to address $our basic 0uestions*
7a8 %ow do customers see us9 ! :ustomer perspective
7b8 .hat must we e1cel at9 ! 6nternal perspective
7c8 :an we continue to improve and create value9 ! 6nnovation ; learning perspective
7d8 %ow do we look to shareholders9 ! /inancial perspective
Balanced Scorecard
The Balanced corecard is a management tool to mobili-e employees to $ul$ill the
mission o$ the organi-ation. 6t is $ounded on principles developed by Robert .
Kaplan and David #. Norton) and published in their book) The Balanced
corecard* Translating trategy into Action.
The scorecard is a method o$ designing) organi-ing and communicating
per$ormance measures across multiple perspectives 7i.e. customer) $inancial)
business process and learning and growth8) utili-ing both short and long term time
hori-ons. The scorecard conveys the strategic plan to organi-ation members) and
it monitors each perspective simultaneously so that each perspective
continuously supports the strategic plan.
The scorecard is an analysis techni0ue to translate an organi-ation,s mission
statement and overall business strategy into speci$ic) 0uanti$iable goals and to
monitor the organi-ation,s per$ormance in terms o$ achieving these goals. The
Balanced corecard is an integral part o$ 3#<.
Measures
At its simplest) measures are the 0uanti$ication o$ an action or activity. Di$$erent
measurements occur at di$$erent organi-ational levels. ome measurements are
lagging) and some measurements are leading* A good scorecard has a balance
o$ both. Both outcomes and per$ormance drivers should be included in each
business unit,s balanced scorecard.
• Outcomes are lagging indicators) and are the $inal results o$ all o$ an
organi-ation,s products and services. 51amples would be* enhanced
mobility) sa$e drinking water) and increasing the 0uantity and 0uality o$
open space.
• Performance drivers) also known as leading indicators or inputs) are
measures that are uni0ue to each organi-ation or business unit.
#er$ormance drivers and inputs measure the employee and unit activities)
which in turn) result in outcomes.
Perspectives of the Balanced Scorecard:
Businesses too $re0uently use only $inancial and process measures to evaluate
their per$ormance. The balanced scorecard approach broadens the measurement
o$ per$ormance by looking at work $rom multiple perspectives*
• customer perspective
• $inancial perspective
• business process perspective
• learning and growth perspective
Best practices of the Balanced Scorecard include:
• "easure per$ormance o$ all strategic goals
• "aintain a balanced set o$ measures
• #eople are held personally accountable $or results
• Develop solid baseline data
• "atch resources to goals and ob=ectives
Effective measures should be:
• Aligned with enterprise strategy.
• upported by leadership.
• :lear and understandable.
• A balance o$ lagging and leading indicators.
• >inked to individuals and?or teams) with organi-ational goals in!sight.
• A centerpiece o$ the management process.
Barriers to successful measurement include:
• 6nability to reach consensus on goals or measures.
• 6nsu$$icient involvement o$ end users o$ the measurement system.
• Routine habits) in$le1ible processes) cherished systems) and static culture
are all obstacles to success$ul measurement.
• /ear or unwillingness to change.
• "easuring what is easy or known) rather than identi$ying what needs to be
measured.
Cause-and-effect relationships:
"5very measure selected $or a Balanced corecard should be an element o$ a
chain o$ cause!and!e$$ect relationships that communicates the meaning o$ the
business unit,s strategy to the organi-ation."
-- The Balanced Scorecard, Kaplan and Norton
(p. 149)
Learning more about the Balanced Scorecard
The book) The Balanced corecard* Translating trategy into Action) by Robert .
Kaplan and David #. Norton is a great starting point to learn more about
perspectives and measures.
3ther sources $or learning may be $ound on the internet. :lick this link $or more
in$ormation about on!line learning opportunities.
The customer perspective:
.ho is your customer9 .hat services or products do they e1pect $rom you9
%ow do you listen to and learn $rom your customer9 %ow do you retain and
ac0uire new customers9 %ow do you meet your customers needs9 %ow do you
measure customer satis$action and dis!satis$action9
The financial perspective:
There is a broad range o$ traditional $inancial 0uestions that can be asked. The
0uestions can address short and long!term time hori-ons. Depending upon the
standards in your industry) return on investment 7R368) revenue enhancement
and growth) risk) and improved productivity are all reasonable $inancial
measures. The measures $rom other scorecard perspectives should be linked in
a cause!and!e$$ect relationship towards achieving the desired $inancial
outcomes.
The business process perspective:
.hat products or services will your customers value in the $uture9 .hat
processes best deliver the outcomes desired by the customers9 >ooking into the
$uture) what are the new business processes that you must e1cel at9 .hat will
be valued in the $uture) and how will innovation deliver $uture values9
The learning and growth perspective:
The learning and growth perspective supports the other three perspectives.
@ltimately) i$ the work$orce is not enabled with knowledge) innovation and
advanced skill sets) the work$orce will be unable to build and enhance innovative
business processes) that in!turn will help retain and ac0uire new customers) and
ultimately achieve $inancial ob=ectives.
"A core group o$ three employee!based measures!!satis$action)
productivity and retention!!provide outcome measures $rom
investments in employees) systems and organi-ational alignment."
-- The Balanced Scorecard, Kaplan and
Norton (p. 146)
What is the Balanced Scorecard?
A new approach to stategic management was developed in the early 1990's by Drs.
Robert Kaplan (Harvard !siness "chool# and David $orton (alanced "corecard
%ollaborative#. &hey named this system the 'balanced scorecard'. Recogni'ing
some o( the wea)nesses and vag!eness o( previo!s management approaches* the
balanced scorecard approach provides a clear prescription as to what companies
sho!ld meas!re in order to 'balance' the +nancial perspective.
&he balanced scorecard is a management system (not only a meas!rement
system# that enables organi'ations to clari(y their vision and strategy and translate
them into action. ,t provides (eedbac) aro!nd both the internal b!siness processes
and e-ternal o!tcomes in order to contin!o!sly improve strategic per(ormance and
res!lts. .hen (!lly deployed* the balanced scorecard trans(orms strategic planning
(rom an academic e-ercise into the nerve center o( an enterprise.
Kaplan and $orton describe the innovation o( the balanced scorecard as (ollows/
0&he balanced scorecard retains traditional +nancial meas!res. !t
+nancial meas!res tell the story o( past events* an ade1!ate story (or
ind!strial age companies (or which investments in long2term capabilities
and c!stomer relationships were not critical (or s!ccess. &hese +nancial
meas!res are inade1!ate* however* (or g!iding and eval!ating the
3o!rney that in(ormation age companies m!st ma)e to create (!t!re
val!e thro!gh investment in c!stomers* s!ppliers* employees*
processes* technology* and innovation.0
&he balanced scorecard s!ggests that we view the organi'ation (rom (o!r
perspectives* and to develop metrics* collect data and analy'e it relative to each o(
these perspectives/
• The Learning and rowth Perspective
• The Business Process Perspective
• The Customer Perspective
• The !inancial Perspective
The Balanced Scorecard and Measurement-Based
Management
&he balanced scorecard methodology b!ilds on some )ey concepts o( previo!s
management ideas s!ch as &otal 4!ality 5anagement (&45#* incl!ding c!stomer2
de+ned 1!ality* contin!o!s improvement* employee empowerment* and 22 primarily
22 meas!rement2based management and (eedbac).
Double-Loop Feedback
,n traditional ind!strial activity* 01!ality control0 and 0'ero de(ects0 were the
watchwords. ,n order to shield the c!stomer (rom receiving poor 1!ality prod!cts*
aggressive e6orts were (oc!sed on inspection and testing at the end o( the
prod!ction line. &he problem with this approach 22 as pointed o!t by Deming 22 is
that the tr!e ca!ses o( de(ects co!ld never be identi+ed* and there wo!ld always be
ine7ciencies d!e to the re3ection o( de(ects. .hat Deming saw was that variation is
created at every step in a prod!ction process* and the ca!ses o( variation need to be
identi+ed and +-ed. ,( this can be done* then there is a way to red!ce the de(ects
and improve prod!ct 1!ality inde+nitely. &o establish s!ch a process* Deming
emphasi'ed that all b!siness processes sho!ld be part o( a system with (eedbac)
loops. &he (eedbac) data sho!ld be e-amined by managers to determine the ca!ses
o( variation* what are the processes with signi+cant problems* and then they can
(oc!s attention on +-ing that s!bset o( processes.
&he balanced scorecard incorporates (eedbac) aro!nd internal b!siness process
outputs* as in &45* b!t also adds a (eedbac) loop aro!nd the outcomeso( b!siness
strategies. &his creates a 0do!ble2loop (eedbac)0 process in the balanced scorecard.
Outcome Metrics
8o! can't improve what yo! can't meas!re. "o metrics m!st be developed based on
the priorities o( the strategic plan* which provides the )ey b!siness drivers and
criteria (or metrics managers most desire to watch. 9rocesses are then designed to
collect in(ormation relevant to these metrics and red!ce it to n!merical (orm (or
storage* display* and analysis. Decision ma)ers e-amine the o!tcomes o( vario!s
meas!red processes and strategies and trac) the res!lts to g!ide the company and
provide (eedbac).
"o the val!e o( metrics is in their ability to provide a (act!al basis (or de+ning/
• Strategic feedback to show the present status of the organization from many perspectives for
decision makers
• Diagnostic feedback into various processes to guide improvements on a continuous basis
• Trends in performance over time as the metrics are tracked
• Feedback around the measurement methods themselves, and which metrics should be
tracked
• Quantitative inputs to forecasting methods and models for decision support systems
Management by Fact
&he goal o( ma)ing meas!rements is to permit managers to see their company more
clearly 22 (rom many perspectives 22 and hence to ma)e wiser long2term decisions.
&he aldrige %riteria (199:# boo)let reiterates this concept o( (act2based
management/
05odern b!sinesses depend !pon meas!rement and analysis o(
per(ormance. 5eas!rements m!st derive (rom the company's strategy
and provide critical data and in(ormation abo!t )ey processes* o!tp!ts
and res!lts. Data and in(ormation needed (or per(ormance meas!rement
and improvement are o( many types* incl!ding/ c!stomer* prod!ct and
service per(ormance* operations* mar)et* competitive comparisons*
s!pplier* employee2related* and cost and +nancial. Analysis entails !sing
data to determine trends* pro3ections* and ca!se and e6ect 22 that might
not be evident witho!t analysis. Data and analysis s!pport a variety o(
company p!rposes* s!ch as planning* reviewing company per(ormance*
improving operations* and comparing company per(ormance with
competitors' or with 'best practices' benchmar)s.0
0A ma3or consideration in per(ormance improvement involves the
creation and !se o( per(ormance meas!res or indicators. 9er(ormance
meas!res or indicators are meas!rable characteristics o( prod!cts*
services* processes* and operations the company !ses to trac) and
improve per(ormance. &he meas!res or indicators sho!ld be selected to
best represent the (actors that lead to improved c!stomer* operational*
and +nancial per(ormance. A comprehensive set o( meas!res or
indicators tied to c!stomer and;or company per(ormance re1!irements
represents a clear basis (or aligning all activities with the company's
goals. &hro!gh the analysis o( data (rom the trac)ing processes* the
meas!res or indicators themselves may be eval!ated and changed to
better s!pport s!ch goals.0
The Balanced Scorecard -- Not Just Another
Project
© aul !rveson "##$
5anagers in many government agencies have been reared on pro3ect management.
,t is the way they thin) abo!t achieving their mission. ,n the De(ense Department*
pro3ect or program management has been the (ramewor) (or development o( every
system costing (rom ten tho!sand dollars to ten billion dollars. &here is a long2
established tradition o( on2the23ob training and e-perience (or yo!ng people to learn
and be mentored by e-perienced pro3ect managers. 5any g!ideboo)s* man!als*
so(tware programs* and other means have been devised to aid the pro3ect manager.
9ro3ect management has been in the management c!lt!re (or decades* and
the (ederal government has tho!sands o( pro3ect managers who are ro!tinely
capable o( ama'ingly comple- achievements. ,n (act* many pro3ect managers may
have never seen or cosidered any other way to get things done.
Altho!gh it is not necessary here to describe pro3ect management in detail* a simple
diagram will help to show its general (eat!res.
&he +g!re represents a time line or <A$&& chart. All pro3ects (or programs# have a
de+nite start time (green# and a de+nite stop time (red# when the +nal deliverables
(prod!cts* services* doc!ments* decisions* etc.# are delivered to the c!stomer. &he
goal is to meet c!stomer re1!irements. &he initial stage re1!ires establishment o( a
precise b!dget and a plan o( action and milestones (9=A>5#. &he wor) is (oc!sed on
the act!al mission o( prod!ction !nderta)en (or the c!stomer. ,t may be bro)en
down into a hierarchy o( s!btas)s* called an ?ngineering "ched!le .or) rea)down
"tr!ct!re (?"."#. "tat!s and review meetings are sched!led at reg!lar intervals
thro!gho!t the pro3ect. @s!ally some )ind o( +nal report is written as one o( the
deliverables. &he goal is to reach the end point on time and within b!dget* since
there are !s!ally other pro3ects that are depending on inp!t (rom the deliverables o(
this pro3ect. "o pro3ect management is the e6ort to manage wor) within a +nite*
clearly scoped* hierarchically2str!ct!red* linear development process with a de+nite
beginning and end.
The balanced scorecard management system is not just another project. ,t
is (!ndamentally di6erent (rom pro3ect management in several respects. &o ill!strate
the radical nat!re o( this di6erence* a diagram is shown o( the "% per(ormance
meas!rement process* as it wo!ld r!n when installed in an organi'ation.
&he +rst thing to notice is the topology/ the balanced scorecard management
process* derived (rom Deming's &otal 4!ality 5anagement* is a continuous
cyclical process. ,t has neither beginning nor end. ,ts tas) is not directly concerned
abo!t the mission o( the organi'ation* b!t rather with internal processes (diagnostic
meas!res# and e-ternal o!tcomes (strategic meas!res#. &he system's control is
based on per(ormance metrics or 0metadata0 that are trac)ed contino!sly over time
to loo) (or trends* best and worst practices* and areas (or improvement. ,t delivers
in(ormation to managers (or g!iding their decisions* b!t these are sel(2assessments*
not c!stomer re1!irements or compliance data.
9eople trained only in pro3ect management may have di7c!lty in +g!ring o!t how to
accomplish the "%* simply beca!se it is s!ch a di6erent )ind o( management
paradigm. =ne o( the )ey practical di7c!lties is to +g!re o!t how to get the process
started in the +rst place. ,( this is not a pro3ect* where does one beginA .hat )ind o(
plan is appropriate (or deployment o( the balanced scorecard systemA
,( we want to ride a rotating merry2go2ro!nd* we had better not attempt to 3!st hop
on. .e will probably get h!rt 22 and won't get on. &he sit!ation is similar with the
balanced scorecard. &o get on the merry2go2ro!nd* we have to accelerate in the
same direction (or awhile* then hop on when o!r speed e1!als that o( the circ!lar
Boor. ,n other words* there needs to be a ramp-up phase* where everyone 0comes
!p to speed.0 &his incl!des training or retraining o( pro3ect managers* and probably
(oc!sed deployment o( pilot eforts be(ore attempting to cover an entire large
agency. "!stained* patient leadership will be needed be(ore the payo6 is attained.
Management Approaches
© aul !rveson "##$
<overnment agencies cannot live by pro3ect management alone. %ongress* in the
<9RA* the ?-ec!tive ranch in the Reinventing <overnment initiative* and DoD
"ecretary %ohen in the De(ense Re(orm ,nitiative* are as)ing !s to +nd ways to
increase prod!ctivity and e7ciency* while maintaining mission e6ectiveness. &hat is
where the new management approaches come in 22 they are more applicable than
pro3ect management to the )inds o( internal improvements that are needed.
&he table below s!mmari'es comparisons o( three di6erent management
approaches or methodologies. &he comparisons are shown (or several di6erent
(eat!res. ,t is evident (rom this comparison that 9, and the alanced "corecard are
1!ite di6erent in most respects (rom pro3ect management. &hey have di6erent
p!rposes and meet di6erent needs.
Project
Management
Business Process
Improvement
Balanced Scorecard
Age of
Approach
Decades egan in DoD 199C egan in 1990
Prime
Customer
?-ternal "ponsor ,nternal Director
?-ternal ,<* ,nternal
Director
oal
!e"nition
9ro3ect Re1!irements*
5ission $eeds
%ost* cycle time
red!ctions
"trategic management
system
"tatement
#ocus &echnical 5ission !siness 9rocesses 5!ltiple perspectives
Scope "peciali'ed !nit !nit to enterprise !nit to enterprise
Plans
9lan o( Action >
5ilestones
9rocess ,mprovement
9lan
"trategic 9lan*
9er(ormance 9lan
Schedule
.or) rea)down
"ched!le* Action
,tems
&eam directed
&eams* CD2month
sched!le (rom "% boo)
Managemen
t Activities
&eam b!ilding*
!dgeting* &as)
&rac)ing* Reviews
aseline process
analysis* to2be process
design* a!tomation
De+ne metrics* collect
data* analy'e data*
decide on changes
Tools $see
lin%s&
5icroso(t 9ro3ect*
9rimavera
&!rbo9R* ,D?E0
9AR2F* <entia* intranet
G database
Measures of
success
Deliverables on time*
on b!dget
%ost red!ctions min!s
cost o( 9, e6ort
4!antity o( data*
improved res!lts on
many metrics
,n attempting to implement the newer management methodologies in a traditional
pro3ect management organi'ation* there are two possible options/
"% train the managers in the new approaches and techni&ues'
(% translate the new approaches into familiar pro)ect form, and treat them as conventional
pro)ects%
=ption 1 is always recommended. &he problem with that is that we do not have the
time or money to spend on a lot o( training in new techni1!es.
=ption C is something that hasn't been s!ggested be(ore* to my )nowledge. , don't
)now i( it is (easible* or even i( it ma)es sense. !t i( it co!ld be done* it wo!ld save
a lot o( time in deploying the new initiatives.
=ption C was act!ally s!ggested by the DoD's 199H 9er(ormance 9lan* in which one
o( the top level mission goals was '%ost Red!ction'. ,n other words* the DoD
management recogni'es that this is in itsel( worthy o( being a strategic goal on the
level o( its other missions* not 3!st an internal e7ciency need.
Selecting a Management Approach
© aul !rveson "##$
=ne o( the reasons why managers are having s!ch di7c!lty in applying
management methods to government problems is this/ there are many di6erent
schools o( tho!ght on management approaches* and each o( these schools has its
own proponents. <enerally* an original proponent ma)es his or her name in that
partic!lar concept* and becomes an 'e-pert' and a 'g!r!' o( it. &here is little
incentive to integrate this one approach with others.
&hat 3ob is le(t to the poor managers who have to +g!re o!t how to apply what
theory to their b!siness problems. &hey have heard something abo!t 5=* &45*
9R* ,"=29000* %55* A%* "%* and all the other b!'' words and acronyms o(
management 22 b!t they have received precio!s little g!idance as to what to select
that best +ts their b!siness needs* and the top2level re1!irements s!ch as the <9RA.
@s!ally* however* managers will tend to !se the approach with which they are most
(amiliar* which is probably pro3ect management or program management.
At any point in time* management c!lt!re tends to be dominated by one school o(
tho!ght. %!rrently an emerging idea is the 'balanced scorecard'. &he boo) on this
theory by Kaplan and $orton is c!rrently one o( the top 10 best sellers in the +eld.
5anagement cons!ltants and writers tend to adopt the theory that is c!rrently in
vog!e* and its pop!larity th!s tends to grow rapidly to a pea)* !ntil it is s!perseded
by the ne-t new idea. &he schools come and go appro-imately every 10 years. A
similar phenomenon seems to ta)e place in other social sciences* s!ch as
psychology* sociology* and ed!cation.
&homas K!hn's boo) The Structure of Scientifc Revolutions analy'ed this
phenomenon. Altho!gh its concl!sions may be ta)en too (ar* the general description
o( the process seems tr!e eno!gh/
"% ! revolutionary new idea comes out of the blue, and champions and followers arise to
promote it%
(% ! school of thought and literature arises around the sub)ect%
*% The idea becomes so popular that it becomes part of the +establishment+% ,ts view is
un&uestioned and it dominates the scene for awhile%
-% !nomalies, countere.amples and new ideas emerge that cause the original idea to be deeply
&uestioned%
/% ! period of conflict between proponents and opponents prevails%
0% 1ne of the new ideas takes over the field, e.cept for a few die2hards who have little but
historical influence%
3% The old idea may not be forgotten, but is absorbed into the new idea as a +special case+ or a
+useful fiction+ that may be helpful in certain situations% 4This appears to be the current status
of Freudian theory within psychotherapy, for e.ample5%
Management #le'i(ilit)
A manager who only has e-perience in one approach* s!ch as pro3ect management*
may have di7c!lty in adapting to changing demands. A manager can be m!ch more
e6ective i( he or she is able to select a management approach that is most
appropriate to the desired need or goal. &his adaptability or 'eclectic' Be-ibility may
prove very !se(!l in the changing government management environment.
&here is no good reason why managers m!st (ollow the latest school o(
management tho!ght. =n the other hand* 3!st beca!se an idea is new does not
mean that it sho!ld be dismissed. &here are reasons why one partic!lar approach is
better than another depending on the strategic goal or need. &he alanced
"corecard* (or instance* appears to be a very appropriate techni1!e (or meeting the
!rgent management needs o( many <overnment agencies* s!ch as their need to
comply with the re1!irements o( the <9RA. However* this need sho!ld not blind
managers to other* perhaps even more pressing goals o( their organi'ation that may
re1!ire a di6erent approach.
&he (ollowing table was developed to aid in selection o( a management approach*
depending on the conditions and need o( the organi'ation (strategic goal#. &he
conditions will partly determine the best option. (&he terms are de+ned here.#
Time
*ori+on
$)ears&
Strategic oal
Change
,eadiness
Technical
-evel
,is%
Tolerance
,ecommended
.ption
C2I <9RA %ompliance 5oderate High 5oderate
alanced
"corecard
I2D
JI0K cost
red!ctions*
s!rvival
High High High 9R
12I
C0K %ost
red!ctions
5oderate 5oderate 5oderate 9,
Long term
%ontin!o!s
improvement
5oderate 5oderate Low &45
C2I
aldrige score
elevation
5oderate High Low
alanced
"corecard G A%
C2M
"trategic
alignment
Low 5oderate 5oderate
alanced
"corecard
C2M
5ar)eting
credibility
Low Low 5oderate
,"=29000*
incremental
C2M
,ncreased
capabilities
5oderate High Low %55
$ote that not all possible combinations o( conditions are incl!ded in the table. ,(
yo!r conditions are beyond the levels indicated here (e.g. low ris) tolerance when
I0K cost red!ctions are needed#* then it is li)ely that a 'best option' does not e-ist
(or yo!r sit!ation. 8o! may need to gain additional senior management s!pport and
tolerance (or ris) be(ore cond!cting strategic activities.
Details abo!t each o( these approaches may be (o!nd in boo)s and at web sites
listed in the Lin)s.
What is HR Scorecard.com?
HR "corecard.com is an online* 1!estionnaire2based s!rvey instr!ment which
e-amines the internal wor)ings o( an organisation and identi+es bloc)ages to
growth. Developed by the %entre (or =rganisational ,nnovation 9ty Ltd* and based
on the alanced "corecard* it meas!res employee attit!des to the three )ey areas o(
organisational e6ectiveness N strategic intent* b!siness processes and
c!lt!re;behavio!r.
HR "corecard.com has been designed to give yo! timely* acc!rate in(ormation to
help yo! manage the growth o( yo!r b!siness. ,ts delivery thro!gh a sec!re*
password protected web site means that data collection and analysis is simple and
(ast.
?mployees can complete HR "corecard.comOs con+dential s!rvey anywhere where
they can access the internet N (rom their des)s* at their home or even in an internet
ca(P. &he con+dential* anonymo!s nat!re o( the s!rvey means employees (eel they
can answer tr!th(!lly* which gives yo! power(!l data abo!t the health o( yo!r
organisation.
doc_803141376.doc