Sunday, October 5, 2014

Balanced Scorecard approach to Strategy

This time Bill chose to write about Strategy.  With his military background, his perspectives about strategy planning and execution, that he shared here, is very unique and insightful.  I have listed below some of the key take away points, from his post, where he cleverly blends strategy with quality:

  • Split the strategy planning time by involving the team - supervisor and the level of command - collaboration is important
  • Start the strategy planning process by writing down the facts and assumptions - factor hidden assumptions
  • Validate whether the components of strategy will get you where you wanted to go - understand the vital aspects clearly and early
  • Perform the feasibility test of the strategy and, only on success, proceed further - better to be practical  
  • Question those activities performed outside the strategy framework - stay 100% focused
  • Review, obtain feedback and improvise the strategy before proceeding with deployment - continuously improve and incorporate actions

I think that Bill's approach towards strategy is solid, very practical and many of these points come from his varied experience and background.

I have used another approach for strategy planning and execution which works fairly well, especially in the Information Technology industry, - the Balanced Scorecard (BSC) approach.   A typical BSC comprises of a list of organization goals, for a financial year,  along with defined targets.   The BSC is capable of measuring and providing feedback to organizations in order to meet the set goals.

The four strategy areas that the BSC focus are : i) Customer, ii) Finance, iii) Internal functions and iv) Learning & Growth.   For a financial year, the process starts with the setting of goals and associated targets at the organizational level.  The BSC is appropriately cascaded down to the bottom levels of the organization structure.  Subordinate's goals are aligned to supervisor's goals.  The measurement of goals against targets are captured and reviewed, on a quarterly basis.  Gaps, if any, are documented and used as a feedback to come up with suitable action items to catch-up or fix these gaps.

BSC also serves as an effective data collection tool that quantifies performance results.   Since the BSC aligns to one's performance goals, it gets the right importance at all levels and is found to be effective.  

BSC can become a much powerful tool for strategy planning and execution if we incorporate the key insights shared by Bill, into it, at the early stages of planning.  As Bill rightly suggested, it is important to collaborate during the goal setting and target definition process to make it much more effective.   Assumptions, especially any hidden ones, must be understood to the best possible extent. Review the BSC and come up with associated actions and tweak to improve the BSC appropriately, during the initial 1 or 2 months.  Encourage employees to stay focussed and avoid deviating from the set BSC strategy.    


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Unknown said...

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Evan Raymonds said...

Strategic planning is a review and planning process, which consists of decision making and different projects or activities, carried out by organizations to achieve its overall long-term goals. Find these usable strategy planning templates to be used freely.

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