This article seeks to document and share my experience and knowledge with designing and implementing scorecard systems in organisations.
The first order of business before embarking on a scorecard implementation is to conduct a thorough literature review regardless of how much you think you know about the BSC.
The literature review will inform or validate the choice to implement the BSC. The organisation should be very clear on if they are using the BSC as performance management tool or as a strategic management tool and they must understand the difference and its implications.
The BSC implementation is not the whole responsibility of the Human Resource department. One organisation actually placed this responsibility initially within HR and the results were disastrous especially since the entire leadership team were not in full support of the BSC. An Executive Sponsor should be appointed to drive the implementation. Many case studies cited the formation of a steering committee as being very helpful to dislodge obstacles and to drive acceptance and buy-in.
The impetus for the implementation should originate from the top. The executive team should be in agreement about adopting the BSC. A key success factor in any BSC implementation is visible leadership support. Many political battles are avoided or minimised when top-level management sponsors the initiative from the onset, and publicise its benefits and importance to the rest of the organisation.
The reasons for the implementation and the benefits to both the organisation and the employees must be communicated, communicated and communicated. You need to constantly and consistently communicate using the various media available to you. Don’t make the mistake to think, “well I did a session on the BSC two months ago, how is it they still asking questions”. One should explore using the company’s newsletters, intranet, posters, stationery, emails, novelty items etc. How one communicates, what one communicates and to whom one communicates, all depend on the culture and the politics of the organisation.
Reasons for adopting the scorecard maybe categorised into two main areas, they are operational and strategic. The operational reasons may include:
- Need to be able to measure people and projects
- Need to measure performance at different levels of the organisation
- Need to develop a systematic way to collect and present information in a way that facilitates easy and quick decision making
- Need to correlate measures
- Need to enforce and monitor regulation compliance
- Need to track progress toward achievement of organisational goals
- Need to link compensation to performance
Typical strategic reasons for adopting the BSC are:
- Need to make strategy everyone’s job
- Strategy and objectives are too abstract
- Need to communicate strategy to everyone simply and clearly
- Translating strategy into operational terms is difficult
- Need to align employee behaviour with strategic objectives
- Need to link and align the organisation around strategy
The above reasons relate to the reasons why the organisation may opt to implement the BSC. We will discuss the “what is in it for me” approach aimed at gaining employee buy-in in a future article.