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A hurdle that many new BSC users / practitioners must confront is the confusion associated with the term "Objective" as it is used within the context of a balanced scorecard. This confusion stems from the learning concept of the Law of Primacy which essentially states “what is first learned is best learned”. Association with the term previously used in a similar, yet distinct manner, causes interference with the listeners or learners ability to distinguish between an Objective, measure, target, initiative or goal.
Often the term Objective is associated with an “desired end-state”, in which case the phrase "attaining our objectives" would be appropriately applied. Certainly in Military terms, reaching an objective is often associated with attaining control over and area that was previously under the opposing forces control. Other industries also use the term "objective" in a similar manner. Business objectives are often goal related. At times they are quantitatively expressed as in financial objectives or other performance objectives such as production cycle time goals, process, product or service quality standard goals, goals for the reduction of waste or other process efficiency measures. Sometimes they are project related, such as in deploying a new product or service. In all these cases the can be "accomplished" or "attained".
The key to understanding the term Objective within the context of the BSC is to think of an Objective as a "continuous improvement activity"; one about which we will want answer the question “How are we doing in this activity over the long run?” rather than “Has it been reached?” Here we can see that we really never "achieve" or "attain" our objectives, but rather improve, maintain or degrade our objective performance over time. What we are really interested in, with regards to our Objectives, are the associated performance trends in relation to our stated performance targets of these continuous improvement activities and how the performance of one Objective impacts other Objectives. None operate in isolation as collectively our Objectives enable us, as I am fond of saying, to complete our Mission today and achieve our Vision tomorrow.
Have you faced this challenge with the understanding of the term "Objective" in your organization or in the organizations you work with?
If so, what ways have you found to help overcome this hurdle?
Think of Objectives as the "DNA" of a business strategy. The inter-related Objectives, when linked in cause-effect relationships, form a Strategy Map that describes how an organization creates value for customers and stakeholders (and for the owners of the business for private sector firms). We find it useful to comapre team-developed Objectives against "best practices" developed in other engagenents. Here are some characteristics of "good" that you can use as a checklist to compare against the Objectives you developed.
Some characteristics of "good" Objectives: Action oriented activities that indicate what must be done to be successful Show continuous improvement potential over time A simple statement of intent, starting with an action verb Easy to understand, with Objective commentary to describe the details
The test for "good" Objectives is to make sure they convey the intent of continuous improvement, and that they are not start/stop projects or tasks. One way to ensure that the discussion around Objectives stays focused around continuous improvement is to minimize the discussion around what the organization is currently doing now. If there is too much discussion around "what we do now" it is much harder to get folks thinking about the future. Remember, building a balanced scorecard system is about the future. Strategy is about the future, and asks the quesiton: "What does our organization need to do to be successful and acheive our future vision?"
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