The Strategic Dilemma and Critical Operational Barriers
A Monologue on
The Balanced Score Card: Translating Strategy Into Action
Robert S Kaplan, in one of his articles explains how to effectively manage Strategy and Operations. This wonderful work chalks out a five stage system deployment of the Balanced Scorecard. Each of the stages has crystal clear deliverables, while connecting ends beautifully.
By my study of various Operations and their struggle in getting their Balanced Scorecard moving, I tried testing a simple & popular analogical model to see if it works. The Success has been pleasantly surprising.
Organisations (read Visionaries) start with a loud bang, however many whimper down when they face operational barriers & conflicting short term goals. This leads to a Strategic Dilemma in forging ahead the Balanced Score Card. Now seriously, come to think of it; should we say forging ahead who, many would liken to a ruthless warrior mad with personal glory in mind or a Great One with small wins of Land & Friends along the way?
Kaplan begins with Strategy Development as the stage 1 of this system. Of course he talks about the Organisation’s Vision, Mission and Value Statements at this stage. These are the deliverables expected from this stage. What’s important is the process of arriving at these guiding principles. I tested the SWOT Analysis Tool (Strengths, Weakness, Opportunities & Threats) to drive this process. Success has been inciting confidence.
Stage 2 is about translating these guiding principles of Vision & Mission into Objectives and Programs. General Objectives only move a notch above the Vision Statements. My tests have shown that, by arriving at SMART (Specific, Measurable, Achievable, Realistic and Time-bound) Targets, Organisations have been able to put their thoughts into manageable chunks of Actions. Results have been highly convincing when these objectives are linked to performance Metrics
Let me talk about the simple analogical tool mentioned in the beginning of this monologue for a minute. We have heard of Deming’s PDCA Cycle. (Plan –Do – Check – Act). Can we not beautifully utilise the Planning phase of this cyclic tool in accomplishing these Objectives. Well I did try this. The Balanced Scorecard is Strategy Deployment & needs a detailed fool proof plan to be successful. The 80-20 rule (read Pareto) aptly worked. This is the Stage 3 of Kaplan’s System. Teams spent value adding time on developing these Plans. Organisations need not disturb the running operations till a workable Plan is in place. A well thought out plan debated healthily & agreed by leaders made the transition into Kaplan’s next stage relatively less thorny.
Stage 4 is all about Action. The ‘Do’ Phase of the Deming’s cycle is nothing but operationalising (or implementing) the Plan. Organisations that had extensively covered aspects and potential risks along with mitigation plans in the Planning phase, fared decently in deploying the actions. Teams & Individuals bought the ideas rather than being sold or coaxed into it. Vibrations were felt in the floor & Positive results started pouring in
Reports start coming out. These are sliced and diced around. Analysis of Cost-Benefit, Profitability & Time Correlations of Performance, before and after Strategy Deployment is drawn. These are further tested and actions are modified / intensified based on the results. This is the final Stage of Kaplan’s System. So is the Check and Act Phase of Deming’s PDCA Cycle
The Strategic Dilemma occurs when Visionaries fault in moving ahead with an inadequate & opaque plan, thereby disturbing the apple cart and attracting ire of the operational teams. Operational Barriers will occur & did occur during the implementation and my tests. However these were less of a surprise and more to do with activating the mitigation plans and cushioning the impact profoundly.
The Balanced Scorecard is a wonderful methodology for Strategy Deployment. The world will miss the utility of this if they are disorderly operationalised. Employing the SWOT Analysis, SMART Objectives, Pareto & PDCA helps the organisations in effectively implementing this. Experts’ and my own tests have vindicated this stand.