A few months ago, we got a call from a company asking for help with their balanced scorecard – something that happens every day. What was surprising was that the company was one that was a former winner of the Balanced Scorecard Hall of Fame, and one that I had worked with years before.
A lot had happened in eleven years. All the original architects of the balanced scorecard had left for other organizations. It was no longer used as a way to evaluate or update strategy. Having been cascaded down to an individual employee level years before, what they now called “the balanced scorecard” was simply a way to set targets for employees, based on set objectives and measures. It was run out of the HR department, where the caller was a mid-level manager. These objectives and measures had become decoupled from strategy, and had not been reviewed or evaluated in years. What had once been a tool for individual employee alignment with corporate goals was now only a way to set annual targets for individuals. And without ongoing alignment, it was perceived that it was Corporate’s way to get the employees to jump higher every year. HR’s complaint was that only 5% of the employees had responded to the most recent request for their annual targets.
When I asked the person I was talking with about whether there was a possibility of talking with their strategy function, she was surprised - “Balanced Scorecard is an HR tool – I didn’t think it had anything to do with strategy!”
Sustaining a balanced scorecard takes ongoing leadership engagement, and needs to be the basis for ongoing strategic management conversations NOT a once year report card. Not only management, but all employees benefit from being involved in discussing strategy, identifying objectives, measures, targets and strategic initiatives at the level that they impact, and that impacts them.
For more on aligning individual objectives with strategy visit here.