Creating a Command Board seems to be a great intellectual achievement. What an unmatched challenge for a team: determine the critical aspects of an organization and how to measure them.
The problem is clear: regardless of how many people you assign to the team, you will only have access to a tiny portion of your organization's knowledge; therefore, certain aspects that are critical to the success of the organization are more than likely to be overlooked.
We have discovered that a trick to creating a great Command Board is to assemble the structure or frame first, as if it were a house. Instruct the team to build the structure of a Dashboard of Excellence, just like the structure of a house, and then give it to members of the organization and ask them to add the details to the rough dash.
Going back to the house metaphor, the board design team members are like the concrete managers, who must lay the foundation for the structure. The organization's task is to add pipes, electrical conduits, walls, paint, wallpaper, etc.
How do you do this task of creating the dashboard structure?
About the 5 steps
There are 5 different tasks that provide the necessary understanding framework for a Dashboard creation process and performance measurements.
These steps are typically completed in one day, and the entire process is completed in one business week, Monday through Friday. However, in some cases, the culture and pace of an organization may require that the process be spread over five weeks or… five months. The principle is that it should be much faster than one initially thinks.
The trick, like creating the structure of a house, is to build it quickly so that it can support itself. If too long a pause is made in any of the steps, the entire program will most likely fail as the organization begins to "question" elements of the board before the entire structure is built and understood.
Step 1: Build the strategy links
Step 1 is to capture the existing strategy and document it in a whole new way. This is called creating a strategy map. The strategy map is the essential "secret ingredient" on every good Dashboard.
Doctors Kaplan and Norton often cite a Fortune magazine article that reveals that 90% of strategies fail, not because they are not robust enough, but simply because they are not being practiced. Given such a failure rate, the organization's greatest benefit will come from executing the existing strategy, not from designing a better strategy.
Don't let your Dashboard project drift into another "strategic planning" activity. Take your organization's strategy, whatever it is, and capture it. (After using your dashboard for six months, you will have enough information to hold a meeting where strategic planning is discussed.)
Much has been written about creating strategy maps, including the latest book by Drs Kaplan and Norton, called Strategy Maps (certainly required reading). (Kaplan and Norton's book provides a description of the Pm2. Look for the MDS section on Strategy Maps.)
The strategy map describes what the organization must do to achieve success. By creating a simple map of little consequence, the senior team can create alignments between its various areas and an overall action plan, without determining specific actions, levels of performance or ownership. The strategy map then becomes a low-risk tool to engage the management sector in agreements on the steps to be followed.
As the organization learns and needs to refine its strategy or direction, the strategy map becomes the tool to capture and communicate these changes.
The creation of the strategy map is a task of the senior team of the area to which the Command Board will be applied. The measurement team may or may not participate in the session.
Step 2: Determine the indicators of success
A good Dashboard starts with indicators, not measurements. What is an indicator? Think of the concept of "kilometers per liter" or "liters per 100 km." This is an indicator of the car's performance, but it is not intended to specifically diagnose what can go wrong with it. The fact of traveling a few kilometers per liter may be due to poor engine performance, poorly inflated tires, poor driving habits, etc.
Many of our clients use employee absenteeism as an indicator of their level of satisfaction. It is not very exact, but many organizations have found that employees who are not happy with their work tend to ask for more days of sick leave. Therefore, they monitor the indicator periodically with more rigorous analysis, for example, a survey distributed among employees, to ensure that the indicator is reliable.
By using indicators and not measurements, many benefits can be obtained:
- Greater breadth of board coverage with fewer indicators. Because the indicator covers a variety of possible causes, a single indicator offers broad coverage. (For example, absenteeism may be due to poor management, changes in the organization, lesser prizes, etc.) Possibility of starting to use the board immediately. There are always indicators within the organization that can be immediately used on the dashboard.
It is important to select the indicators after the strategy map has been created. The organization should not adjust its strategy simply because there are no obvious measurements. It is important not to confuse the two concepts.
Step 3: Identify processes, projects and measurements
The board's promise is to turn strategy into action. An important result of any Dashboard process should be the link between the strategy and what we do, that is, the processes we work on daily.
In the third step, the team in charge of the Dashboard should generate a short list of fundamental processes, identify which ones are critical to each strategic objective of the strategy map, and then assign a rating or weight to the capacity of the processes to achieve said objective..
This will allow the organization to identify the strategic impact of each process. Processes that are highly weighted but offer little support are performance risks for the organization.
Likewise, all significant processes must also be assigned a rating or hierarchy based on their impact to improve the performance of each strategic objective.
Ideally, projects will provide greater support to processes identified as weaker; otherwise, the organization has not correctly aligned the projects with the strategic needs.
It is very common to see that 40 to 60% of existing projects are not linked to strategic objectives. Such projects should be discontinued immediately, so as not to divert resources from those that will contribute to the execution of the strategy.
At the end of step 3, the team will have a preliminary analysis that will show the "execution gap", that is, the gap that opens between what the strategy calls for and the capabilities of existing processes and projects.
Step 4: Create the Dashboard processes
To reap the full benefits of the Dashboard, management must learn new techniques. The dashboard needs to be integrated (slowly) with other existing processes, such as responsibility planning and financial planning, and certain efforts must be made to shift the focus of the organization to that of a performance-based culture.
Processes should be designed for monthly data collection and feedback from the 'owners' of the targets. Step 4 consists of determining where the data comes from, who writes the comment, when it should be done, and how it is published.
On the management process side, as stated by Drs Kaplan and Norton in the Strategy-Focused Organization, one should begin to make the "strategy a continuous process" and the "work of all".
For this, it is essential to add a new class of quarterly management meeting, a Strategic Management Process, where the strategy map and the weighting of the objectives are reviewed to ensure continuous monitoring and in the best possible way for the organization.
Based on work done in step 3, the organization can begin to link the strategy at the team or individual employee level by assigning case responsibilities for each livelihood process and project, which, in turn, is linked to each strategic objective.
Step 5: Launch
It is important to put the Dashboard in the hands of the organization as soon as possible.
Two problems can occur if it takes too long for the organization to start using the dashboard:
- The organization begins to feel that the dashboard is becoming a punishment tool for its 'red' indicators and, The team in charge of the dashboard begins to think that they have the right answer and become reluctant to modify it regardless of comments on such a sense of organization.
The dash launch has three components:
- develop a presentation to the entire organization (multiple times), have the management team openly endorse the board, and reach agreement on next steps to take.
