Apr 22, 2010

Dashboards as a Marketing Strategy

I know there are several organizations that build dashboards for their process improvement initiatives. Any change initiative such as ISO 9001, CMMI, or Balanced Scorecard requires support from the entire organization. Hence marketing the concepts, process and the benefits of the change initiative is essential to reduce resistance to change. Using dashboards to convey the progress can create tremendous interest and involvement from the entire organization.

You can use a dashboard not just for process improvements, but for any service you provide, to create a powerful impact.

What are the characteristics of a good dashboard?

Seth Godin, a marketing genius and author of several best sellers, has made the following observations on dashboards.
  1. If you can add a digital dashboard to your service, do it.
  2. If you can make the dashboard public, it gets more powerful.
  3. Highlight data that changes behavior.
  4. Allow the user to highlight the information that matters to them.

Apr 13, 2010

Develop Your Personal Scorecard

One positive outcome of the recession was several organizations gained inner strength by learning to be better at what they are. Growth without inner strength is dangerous. In my case, two things happened last year that made a huge impact. One was attending an NLP based program ‘Born-to-Win’ that helped me to blast off some of my mind-blocks. Another one was developing a Personal Scorecard for me.

Until last year, I had only new-year resolutions. That had some limited success. In 2009 beginning, I set the goals in a particular format. The format has been evolving for several months. Now it is a one page tabular format and I am calling it as my personal scorecard. It has the following headings:

Vision: What I want to be in the long-term? What I want to be known for?

Mission: What is my core purpose?

Objectives: What are my key objectives in the next few years?

Goals: What are my goals for this year?

Strategies (Key Activities): How am I going to achieve my goals?

Measures: Some simple measures of progress towards my goals that can be tracked monthly.

Both strategies and measures are classified under six categories:
  1. Business
  2. Finance
  3. Health
  4. Family
  5. Self-development
  6. Spiritual/Social
Then I have a list of key activities for the month and also a weekly plan for day-to-day tracking (outside the scorecard).

I have found immense value from this personal scorecard. Even though I am not able to complete all the tasks planned, I can see the definite progress that I am making against each of the goals. What matters is almost always getting done. Also I am not neglecting any area of my life and so it is balanced.

You can see a lot of similarities between the Personal Scorecard and the Balanced Scorecard. Instead of the four perspectives in Balanced Scorecard, I am using six perspectives. This approach of ‘six perspectives’ is pretty standard in personal goal setting, if you refer any self-development book.

Initially my personal scorecard was running to a few pages, now it is just one page, and it is really helping me to focus. My personal scorecard used to be an input to my daily affirmations/ meditation. Now-a-days it is an input once in a week. After a few months of its usage, I could find every activity I pick up is influenced by the scorecard. Every month-end I spend about half-an hour reviewing my scorecard which includes updating the monthly metrics and planning for the coming month. It is pretty exciting to watch the progress. Sometimes it creates pain when I don’t achieve the monthly targets, but it serves as an excellent energy booster. The scorecard has become a rich database of monthly info such as active & passive income, number of blog-articles published, books I read, new skills developed, and so on.

You could try developing your personal scorecard if you want to achieve your goals with certainty. There is so much material available in the internet on how to set ‘SMART’ goals. Please let me know if you find any difficulty in developing your personal scorecard.

Apr 7, 2010

The ‘secret’ behind the power of the Balanced Scorecard

Sometimes we wonder how large organizations with several lakhs/thousands of employees, manage their business and hold its employees together, when small organizations find it difficult to keep even a hundred employees together. After being associated with large organizations such as TCS and Flextronics for several years, and working closely with several mid-size organizations, I find the secret lies in ‘alignment’. There could be chaos at local level, but there is alignment at the overall level; alignment to the values, vision, key objectives, strategy, goals and so on.

How do they bring this alignment? They have established processes for their core business functions and there is a mechanism to measure business performance using proven framework such as Balanced Scorecard.

So many management concepts and fads came and gone in the last few decades, but Balanced Scorecard remains very relevant today and organizations are finding new ways of leveraging it and extending its capability. What makes Balanced Scorecard powerful and relevant even today? (Some aspects of this we have seen in the previous article.)

According to Paul Niven (Management Consultant and author), the tool’s longevity can be traced to its ability to solve several fundamental business issues facing all organizations today. In his article, he highlights the following issues organizations face today while measuring performance.

The Limitations of Financial Measures: Traditional focus on financial measures alone is not suitable for today’s environment. The chief criticism levied at financial measures is that they’re tantamount to driving a car by using only the rear-view mirror. You get a great view of where you’ve been, but little guidance towards where you’re headed. Balanced Scorecard gives a system that balances the historical accuracy and integrity of financial measures with the drivers of future financial success.

The Rise of Intangible Assets: In vast majority of modern organizations, what’s driving your success is not tangible assets, but intangible assets such as employee knowledge, databases full of rich information and culture of innovation that really drive value. Some recent estimates peg the value of intangibles as high as 75 percent of an organization’s true worth. Balanced Scorecard is a performance measurement system that sheds light on the value of intangibles and allows us to predict and drive future economic success.

The Challenge of Executing Strategy: Competition in any industry had significantly increased in the last few years. Hence it is vital to execute your strategy quickly. From an often quoted Fortune magazine study from 1999 found that 70 percent of CEO failures came not as a result of poor strategy, but the inability to execute. In this context, Balanced Scorecard has emerged as powerful strategy execution tool.

Balanced scorecard is centred on organization’s vision and strategy. Unlike traditional performance measurement systems that have financial controls at their core, the Balanced Scorecard begins with an organization’s vision and strategy. Then the vision and strategy are translated into performance measures that can be tracked and used to gauge the success in the successful implementation of vision and strategy.

In the same article, Paul Niven gives an example on how companies use Balanced Scorecard for resource allocation and for controlling expenditure in alignment with the business strategy.

To appreciate the beauty of the Balanced Scorecard, one should look at ‘The Building Blocks of the Balanced Scorecard’ and understand how it supports the core elements of business management - strategy, planning, measurement and reporting.

One notable feature of the Balanced Scorecard is ‘Cascading’, which is very effective in bringing in organizational alignment. Cascading refers to a process of developing Balanced Scorecards at lower levels of your business. It is about translating the corporate-wide scorecard down to first business units, support units or departments and then teams or individuals. These scorecards must align with the organization’s highest level Scorecard. This eliminates issues such as 1) employee actually running counter to the organization’s goals because they have a different understanding of what you are trying to accomplish 2) various departments in your organization focus on activities within their own silo more than on how they support the organization’s mission and vision.

Thus the differentiating features such as focus on strategy and employee alignment around a few key goals make the Balanced Scorecard a very effective performance management tool for modern organizations to achieve breakthrough financial results.