As part of the process of implementing the Balanced Scorecard or Balanced Scorecard by its name in English, we must consider as input what companies have defined as their Strategic Plan.
Most of them have a clear focus, but in some we find a series of elements that differ in some way from what is our approach.
Mission:
Some companies first define the Vision and then the Mission, which to the best of our knowledge is a contradiction, since first is the reason why we exist, and then how we want to be recognized in the future or what we aspire to. When we review the missions of many companies, the doubt jumps if that is their reason for being or if that is what they aspire to, in some cases after a review they rethink some elements of their Mission, passing them to what the Vision is. In general, missions begin with the phrase “We are one….”, Which is correct, others, mainly public ones, begin with “Our reason for being…..”, which generally obeys the law or decree that creates them.
View:
In few cases we have found visions that are described in the present tense, the vast majority are considered as a future aspiration of what they want their organization to be, but what worries the most are repeated words and phrases, since all will be leaders, without defining in which. When we prepare the scorecard, from the customer perspective, we seek that companies define their business strategy or value proposition. It is at that moment when they fall into doubt, whether they will be leaders in everything for everyone or will they focus on a specific aspect.
SWOT-SWOT.
In a few cases, we have found that when making their first analysis of the environment, they do it before having defined the Vision of the company, with which they make the mistake of setting their Vision in what the environment provides them and not what they really aspire to be. The correct thing to do is first define the Vision and based on this, evaluate what are the changes in the environment that will contribute positively or negatively to the achievement of the Vision. The foregoing allows us to take advantage of those opportunities that will help us achieve the Vision and stop worrying about those threats that do not affect the future condition that we have defined.
On the other hand, we find a number of strengths and weaknesses, which are not related to the critical elements necessary to achieve the defined Vision, but are generally a criticism of all the things that the company lacks. Many of the so-called weaknesses are not related to the Vision and the great strengths of the past, nor do they allow the development of a better future.
The correct thing is to first define the "Critical Success Factors", elements necessary to achieve the Vision that we have defined within the business we are in, which was clearly stated in the Mission. It could be that factors that were a requirement for the achievement of a previous strategy, now and even worse, in the future, are not differentiating elements for the sustainability of the new strategy.
Those critical factors that the company has in a degree superior to the competition, will be its strengths, on the contrary, those factors that it lacks will be its weaknesses. A strength must fundamentally be an essential element for the achievement of the new strategy, otherwise that strength is worth little. We remember a client of ours who had defined within their strengths that they had ample parking for their clients, which was valid as long as they were a cement and brick organization, but in the new strategy of a virtual organization, where income will be promoted of customers electronically (telephone, email, Internet), parking makes little sense. We must remember that the strategy defines both the structure and the physical and IT infrastructure.
In other cases we have found an interesting effort to combine opportunities with weaknesses as well as strengths with threats or any combination of the above, which loses sense, if the Vision has not previously been landed on specific objectives, which determine in a better way what the company wants to achieve.
The SWOT analysis does not determine the objectives to be achieved, on the contrary the objectives come out of the Vision and on these is that the SWOT analysis is validated, which if it has any impact, will become the necessary initiatives to achieve the vision.
Objectives and indicators:
The Strategic Planning process is similar to what is done with ISO in most of the companies evaluated, with few exceptions. In ISO 9000 a policy is defined, objectives are defined and then a set of indicators, without the two events being related. They are isolated elements that are not related to each other, which occurs due to a light reading of what the standard raises and due to the lack of criticality of the auditors that certify the companies. The ISO 9000 standard clearly defines how the process should be developed. Unfortunately, some consider the standard a mere “check list” that must be met. They know the norm, but they don't know about business or how to create value for the company.
Defining the cause-and-effect relationship between the perspectives as a way of posing the hypothesis on which your strategy is based, the following is to define objectives, which in a simple and concrete way land what the Vision proposes. For each objective, the variables that demonstrate achievements are determined, thereby facilitating the establishment of indicators that are generally result.
If it were clearly understood what the process approach raises, as defined in ISO, we would know that the results, defined in the indicators, can only be achieved through a process approach, so for each objective and indicator of As a result, we must identify the related processes. These identified processes must be measured in terms of their contribution to the achievement of planned results, for which objectives and indicators are established for each process in a cascade effect between objectives and organizational levels.
For many of those who know the Balanced Scorecard, they know that it is developed from the Strategic Plan of the Organization, however many of the plans do not contribute to the achievement of the strategy, so it is preferable to ignore it and start the BSC as if it does not exist.
The Strategic Plan, like the BSC or ISO, are mere tools that contribute to the continuous improvement of organizations, but like everything else, the instruments are not responsible for success or failure, but not due to the ability of the instrumentalists to do a correct implementation of such valuable tools. Unfortunately, you read a book, you attend a course and we are already specialists on the subject. Then we regret the results of its implementation.
We conclude this article with a phrase from Dr. Robert Kaplan (M. Bower Prof. of Leadership Development, Harvard Business School), "Having good indicators does not make anyone rich, make better decisions if", the subject of our next installment.
Grupo Kaizen SA has contributed to the training and implementation on the subject of the BSC (Balanced Scorecard), throughout the Central American area, and in countries such as Mexico and Ecuador, ask for information at [email protected]
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