Implementing a Balanced Scorecard Is a Political Act

Joseph Logan

Joseph Logan

You know you need a scorecard. You know that what gets measured gets managed. You have a bunch of things you would like to keep a closer pulse on.

So why is it like pulling teeth to get your people to commit to a simple set of metrics?

One fundamental aspect most executives overlook when embarking on a scorecarding process is the politics of being so specific about strategy and results. It can seem like a fairly straightforward matter to measure sales, customer satisfaction, EBITDA, process performance, recruiting and retention, and other key metrics, but choosing the right metrics is harder than it seems. The reasons for this are simple yet core commitments to the business.

Choosing metrics is a commitment to a strategy. What you choose–and what you omit–for your scorecard shows discipline and choices. It is the clearest signal of what you care about. Choosing customer satisfaction over churn shows a commitment to customer experience. Highlighting innovation projects over cost-cutting measures indicates a commitment to invention. Selecting 8-10 metrics rather than 43 shows a commitment to focus rather than incoherence.

Assigning accountability for metrics is a commitment to how your team works together. It matters who on your executive team is accountable for the metrics you select. Assigning finance metrics to the CFO, HR metrics to the HR VP, and IT metrics to the CIO might seem natural, but this actually reinforces silos. Strategy is the one integrated set of decisions by which the company creates value. Sharing accountability between leaders who need to cooperate shows a commitment to winning together as a team.

Reporting on metrics is a commitment to seeking the truth about the business. It’s easy to commit to a bunch of measures and targets that sound nice enough in theory. It’s a completely different matter to start delivering naked data about your team’s performance on a regular basis. It can be difficult to get some of this information, and there is often a temptation to put the best face on the numbers. Providing (and demanding) fresh, current, and honest information on performance is the best way to begin confronting and managing the realities of the business.

Implementing a balanced scorecard is a political act because it surfaces the underlying dynamics that were in play before the scorecard. The process reveals who cares about what, how clearly they viewed the business before now, and where their commitment and alliances lay. The balanced scorecard can be a powerful tool for managing the execution of strategy, but it demands that executives embrace it with clear eyes and a commitment to winning together.

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3 Responses to Implementing a Balanced Scorecard Is a Political Act

  1. Great points about the Balanced Scorecard. I can especially relate to the point about “seeking the truth about the business” and how political it can become. In general, Enterprise Performance Management has a significant Change Management component to it for it to be truly successful and drive the right kind of behavior.

  2. Great set of points about the Balanced Scorecard process and what it can reveal about a company’s priorities. Definitely agree about “seeking the truth about the business” and how difficult it can be in practice. In general, Enterprise Performance Management requires a transformation effort for it to truly drive the right kind of behavior – it isn’t about merely measuring and tracking some KPIs

  3. Tony says:

    Very Good point made it your article what get measured get managed that my motto, and to keep focus on the task at hand.

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