A very distraught woman (we’ll refer to her as Vera) recently called the Balanced Scorecard Institute office in panic. Vera:  “Hello?  I need those flags.  Can you please overnight the flags to me?  It’s urgent!” Us:  “Excuse me?  I think you may have the wrong number?” Vera:  “Isn’t this the Balanced Scorecard Institute?” Us:  “Yes, ma’am.  But we don’t sell flags.” Vera:  “Yes, you do.  My boss said so.” Us: “Ummmmm….could you elaborate?” Vera (in an exasperated tone):  “Listen!  My boss just announced that we are going to improve performance using a Balanced Scorecard.  He sent us a memo that said each store is responsible for showing performance by using red, yellow and green flags.  I’m a store manager and I am being held RESPONSIBLE!  I called the other store managers and nobody has the flags.  We all need to order those flags NOW!  You ARE the Balanced Scorecard Institute, are you not?!?” I really am not sure we ever adequately explained to her that the “flags” are a term meaning a visual representation of the level of performance around a target value for a strategic objective or measure, with green generally indicating good performance, yellow generally indicating satisfactory performance, or red indicating poor performance.  And I’m pretty sure she thinks we are idiots for giving a complex response to a simple request to order some flags that she can wave. For the record, I am not making fun of the caller herself.  She was an intelligent woman and obviously a dedicated worker.  But she was dreadfully misinformed and the source of the misinformation is the point of this blog. My point is that her boss created angst and confusion in his organization by making an announcement with no explanation and no context.  HE knows his strategy, HE knows how he wants to measure performance on it, HE created a balanced scorecard to do so (without teaching anyone what that means), and HE announced it to the world and then said “YOU are responsible!” Don’t be that guy. Many bosses / executives / leaders are really smart.  They have a well-thought out strategy in their heads and they can make the leap from planning to execution…in their head.  But they are better at internal conversation (in their own head) than they are at communicating with others.   If this sounds familiar, let us help you bridge the gap between what you say and what your employees hear. I’ve written another blog about this topic (Are Strategic Leaps of Logic Leaving You Dazed and Confused?), because this problem comes up over and over again. Please contact us and let us help. Or to learn more about how to translate your strategy into something that is clear to communicate in a way that employees can understand and effectively contribute to, we invite you to explore The Institute Way:  Simplify Strategic Planning & Management with the Balanced Scorecard.

Some of our clients use Franklin Covey’s methods to improve human and organizational performance, including the use of WIGs (Wildly Important Goals). I’ve wrestled with how to integrate Covey’s approach, which is sometimes loosely or creatively applied, into the balanced scorecard framework in a way that is disciplined, consistent, and simple to understand. Recently, it dawned on me that WIGs are really based on the concept of contribution – a concept we use when measuring performance in the balanced scorecard framework. So first, I need to explain the concept of contribution. I recently wrote a blog (Skinny Jeans and the New Math) in which I was trying to watch my weight but could not directly measure my weight via a scale, so I used a correlate measure based on a pair of skinny jeans in my suitcase.  A different technique to measure something indirectly is to use a contributing measure.  A contributing measure is something you can measure directly and which you believe will influence the results on the thing that you cannot measure directly (in this example, my weight). I actually have two contributing measures that I use while traveling, but until now I haven’t told anyone my secret. Science has shown that several things contribute to weight gain or loss. I have chosen two that are within my control and are easily measurable: (1) How often I eat sweets while on a trip, and (2) How often my gym shoes actually get removed from my suitcase for a brisk walk around the hotel. By setting goals of one or fewer desserts per week (chocolate is my weakness) and using the gym shoes at least once a week, I can keep track of these two contributing measures, both of which will influence what the scale will say when I finally get home. And that’s exactly what Franklin Covey’s WIG approach is.  It’s a series of contributing goals/measures in which one action influences resultant performance on another. So, how can the Covey methodology effectively integrate with the balanced scorecard framework?  Here’s how:  An executive’s WIG must be based on either a strategic performance measure / target or on a strategic initiative.  These are two scorecard elements that are most likely to have actionable contributing factors that an individual can relate to.   The contributing WIGs (which individuals are tasked to create to support the executive’s WIG) are the individual activities or measurable milestones or measurable contributing indicators that ensure individual performance contributes to the overall executive WIG, thereby contributing to the execution of organizational strategy. To further align the Covey execution methods to the organization’s strategy, a disciplined process should be deployed at Tier 3 (individual and team performance objectives for the scorecard system) to ensure that the individual understands the strategic context of their personal and team WIGs. To learn more about how different frameworks integrate into a logical, holistic system to improve organizational performance, we invite you to explore The Institute Way: Simplify Strategic Planning & Management with the Balanced Scorecard.

Have you ever known someone whose brain works faster than they can talk or write?  They often appear to be making leaps of logic when actually, their brain is working through logical steps but they are only communicating their first and last thought in the flow…not the thoughts in the middle.  I have found that many CEO’s suffer from a similar “problem.”  Often, they have a strategy in their heads yet it appears to others that they have made a giant leap from vision to KPIs or initiatives.   So while the CEO usually understands how the pieces fit together, most employees are not mind-readers and cannot follow the “leaps of logic”. This point was vividly illustrated to me in a phone call I had last week.  A CEO called to say he wanted to use a balanced scorecard – he had seen a competitor company achieve outstanding performance which they attributed to their use of balanced scorecard.   Furthermore, he had already figured out the five most important KPIs for his own company…and he asked if we could help him get the managers and employees in his 36 locations to understand and get motivated to take action in alignment with these 5 KPIs. SIGH….I knew it would be a long conversation but he was so sincere and motivated that I dove in and began to try and pull the “middle part” out of his head by asking him questions. He had a very clear picture of the future state of his company and his descriptions were compelling and detailed.  As we talked, I began to loosely translate his word images to strategic objectives…I could almost create a strategy map from his stories.  And that’s ONE point:  A strategy map tells a story, it paints the picture of the organization’s future state and how it plans to get there.  He seemingly skipped this and other important steps when he leaped from vision to KPI’s and, therefore, he was missing the logical linkages. Furthermore as I helped him cross-walk his 5 KPIs to the potential objectives,  I was able to show him that his KPIs were all in the results perspective(financial and customer)…he hadn’t fully considered the  driver KPIs that would be needed until I asked enough questions to start teasing the driver strategic objectives out of his head.  In other words, he was asking his employees to focus on end results without articulating a strategy to achieve those results. After about an hour he said, “I get it.  I skipped the middle part and that’s the MOST important part. I was told that there is a LOT of work to get to meaningful and strategic KPIs but I didn’t understand the middle part.  It is truly important.”   Eureka! And one final point that I made ….and which he definitely understood:  no matter how smart and fast-thinking he is, if he doesn’t involve his team in the creation of strategy and the strategic balanced scorecard, they will be unlikely to buy-into or actively engage in improving the company’s performance.  He knows that he must SLOW DOWN and let other not only catch up, but have a SAY in strategy and KPIs. Are you a fast-thinking CEO who “skips the middle” or do you work for someone who does?  You may enjoy other real stories and examples in the The Institute Way:  Simplify Strategic Planning & Management with the Balanced Scorecard.

How do you deal with an initiative (project) that is a forceful executive’s favorite idea, or, even worse, is something that your organization has spent years to develop BUT is not aligned to your strategy?  Yikes!

I was teaching a class in Atlanta last week and one of the student teams approached me with a question.  They were looking for actions which they could implement to move the needle on a “product variety” objective on a grocer case study.  One of the ideas was an R&D product to produce “blue apples” which led to a discussion of “Special Projects” at their own organizations.

This reminded me of a REAL client who had invested heavily in a special R&D project.

The client, a Fortune 500, had spent several years investing in this super-secret project which they would not reveal even to us, their trusted consultants.  They simply referred to it as “Project X.”

We had been working with this client to develop their Tier 1 scorecard and were onsite for the final executive team session to prioritize strategic initiatives.  Of course, “Project X” was on the list.  We used a 2×2 matrix as our prioritization schema (in which initiatives are placed into one of four quadrants depending on how strategic and how resource consuming they are).  When we finished the calculations, “Project X” was dangling by its fingernails off of the chart – from the furthest corner of the least desirable quadrant.

It was clear that  “Project X” was an expensive and resource-intensive effort yet it was going to provide little to no strategic impact.

As I nervously shared the bad news about “Project X”, the VP in charge of this initiative nodded her head and said, “I saw this coming as we were developing this strategic balanced scorecard.  We have actually already started on a sunset plan.”  I had feared uproar and this quiet affirmation blew me away.

This speaks to the power of inclusion in developing a strategic balanced scorecard.  This team, which had invested millions in “Project X”, had already realized via their participation in strategy formulation that the investment needed to be redirected.  There were no tears, cursing, or arguing.

Which brings me back to Atlanta.  I tried an experiment and tried to bully my student teams into choosing the “blue apple” initiative the next day.  I was shot down…unanimously…by all the teams.  In this case, the logic of a disciplined framework (to align and prioritize initiatives) trumped my argument by vigorous assertion.  Hands down.  The Institute Way works….for many reasons.  To learn more, visit www.balancedscorecard.org/tiw