Implementation Tips From Paul Arveson

The Balanced Scorecard: Not Just Another Project

By Paul Arveson

Managers in many government agencies have been reared on project management. It is the way they think about achieving their mission. In the Defense Department, project or program management has been the framework for development of every system costing from ten thousand dollars to ten billion dollars. There is a long-established tradition of on-the-job training and experience for young people to learn and be mentored by experienced project managers. Many guidebooks, manuals, software programs, and other means have been devised to aid the project manager.

Project management has been in the management culture for decades, and the federal government has thousands of project managers who are routinely capable of amazingly complex achievements. In fact, many project managers may have never seen or considered any other way to get things done.

Although it is not necessary here to describe project management in detail, a simple diagram will help to show its general features.

The figure represents a time line or GANTT chart. All projects (or programs) have a definite start time (green) and a definite stop time (red) when the final deliverables (products, services, documents, decisions, etc.) are delivered to the customer. The goal is to meet customer requirements. The initial stage requires establishment of a precise budget and a plan of action and milestones (POA&M). The work is focused on the actual mission of production undertaken for the customer. It may be broken down into a hierarchy of subtasks, called an Engineering Schedule Work Breakdown Structure (ESWBS). Status and review meetings are scheduled at regular intervals throughout the project. Usually some kind of final report is written as one of the deliverables. The goal is to reach the end point on time and within budget, since there are usually other projects that are depending on input from the deliverables of this project. So project management is the effort to manage work within a finite, clearly scoped, hierarchically-structured, linear development process with a definite beginning and end.

The balanced scorecard management system is not just another project. It is fundamentally different from project management in several respects. To illustrate the radical nature of this difference, a diagram is shown of the BSC performance measurement process, as it would run when installed in an organization.

The first thing to notice is the topology: the balanced scorecard management process, derived from Deming's Total Quality Management, is a continuous cyclical process. It has neither beginning nor end. Its task is not directly concerned about the mission of the organization, but rather with internal processes (diagnostic measures) and external outcomes (strategic measures). The system's control is based on performance metrics or "metadata" that are tracked continously over time to look for trends, best and worst practices, and areas for improvement. It delivers information to managers for guiding their decisions, but these are self-assessments, not customer requirements or compliance data.

People trained only in project management may have difficulty in figuring out how to accomplish the BSC, simply because it is such a different kind of management paradigm. One of the key practical difficulties is to figure out how to get the process started in the first place. If this is not a project, where does one begin? What kind of plan is appropriate for deployment of the balanced scorecard system?

If we want to ride a rotating merry-go-round, we had better not attempt to just hop on. We will probably get hurt -- and won't get on. The situation is similar with the balanced scorecard. To get on the merry-go-round, we have to accelerate in the same direction for awhile, then hop on when our speed equals that of the circular floor. In other words, there needs to be a ramp-up phase, where everyone "comes up to speed." This includes training or retraining of project managers, and probably focused deployment of pilot efforts before attempting to cover an entire large agency. Sustained, patient leadership will be needed before the payoff is attained.