Strategic Alignment is achieved in the Balanced Scorecard:
The Strategy Map defines the Strategic Direction and it's primary output are the Objectives.
It is the job of the Balanced Scorecard to manage how these Objectives are applied to different staff members and departments.
The Scorecard is in the form of a table and each row takes as its first column one of the Objectives. This row is then applied to a person using additional columns that are defined in the Options Module.
Employees and Departments can only select from the pre-defined Strategic Objectives. Hence the Strategy Map Objectives are said to be cascaded into the Balanced Scorecard table column 1.
Balanced Scorecard Rows:
For each employee we will create some Scorecard rows.
A Department or Region is considered as a container and its scorecard rows are the sum of all their member scorecard rows.
The Total Organization Scorecard rows are then the sum of all Region and Department rows.
Objective Grid Rows can easily be re-allocated to a different person anywhere in the organization.
Primary Balanced Scorecard Columns:
Moving Left to Right, the first column is the Strategy Map Objective and the second column defines how this Objective applies to an employee.
This column is critical and many organizations use the term KPI (Key Performance Indicator) whilst others use KRA (Key Responsibility Area) and some simply use Target.
Either way the contents of this column must apply the Objective to the Person.
The two other common columns are the measure and score plus we recommend the Numeric Gauge.
[ Objective | KPI | Measure | Score | Gauge ]
Objectives and Initiatives Table Grids:
We refer to the Tables as Grids because they are dynamic and have varying cell capabilities.
The row and column together define a Grid Cell and the cell type is known as the Cell Style.
Person -> Objective Grid Rows (One to Many).
Objective -> Initiative Grid Rows (One to Many).
Initiative -> two Optional Monthly Grids each with up to 36 months.
The Initiative Grid columns are typically the Initiative Text, followed by a Date Range and whatever Financial or Gantt information you require.
[ Initiative text | Account Code | Date-Range | Financial Planning | Monthly Planning ]
List-Based or Free Text Column Types:
Cells can either be chosen from a list or typed in each time. This is known as List-Based or Free Text.
The Objective column is list-based because it is pre-defined in the Strategy Map. Other columns that have shared cell contents should also be List-Based. It is much faster to simply make a selection plus they can be cross-referenced in the Drill-Down Dashboard module. Free Text Columns are only ever used when the cell contents are rarely shared. (An example of this is the Initiatives Text Column).
Balanced Scorecard Diagram for South West Airlines
Grid Cell Styles:
There are a variety of Cell Styles to choose from. The Objectives and Initiatives grid design selections are made in the Options Module.
The majority of cells in the Objectives grid are common text with the one exception being the Gauge icon. This Icon represents the numeric success value and can be chosen from several icon types or a percent(%) value.
The Initiatives Grid has the same selections plus Date-Range and several numeric financial planning columns.
The Monthly Grids also have several selections however the Finance grid can only be numeric.
The Finance Grid Row Totals can also be displayed as numeric cell values in the Initiatives Grid.
All free-text columns can be designated as Links to external documents or web sites.
Monthly Grids & Actual/Planned:
Each monthly grid can be different according to the requirements.
There are grids for Planned and Actual thus allowing you to calculate Actual/Planned Percent values.
There is a concept called Month-Valid which determines if the Actual/Planned value should be calculated.
Strategy Map WYSIWYG - Closed Loop Learning:
If you choose to have Gauge columns in both the Objectives and Initiatives grids then you have a means for averaging the Initiative progress against each Objective and representing this back in the Strategy Map.
If you are using Monthly Grids you can choose a row average as the driver for the Initiative Grid Gauge.
The Gauges can be displayed in the Strategy Map next to the Objective and when you click on the Objective, all Objective rows with their own Gauges can be displayed.
This allows you to track down any problem areas quickly and make the necessary adjustments immediately.
(WYSIWYG = "What you see is what you get" which implies "The Strategic Picture you are seeing is Real".)
Drill-Down Dashboard Module:
The Dashboard Module is a cross-referencing utility that can represent Balanced Scorecard data according to a search condition.
One facility that is very popular is to show all employees how they are working towards the same Objective as this defines their teamwork.
There are also many other ways to cross-reference and this includes numeric and financial searches.