“Balanced Scorecard is a framework that translates an organization’s strategy into a set of objectives and measures, and aligns the organization to them though it’s planning and control processes”— David Norton
Less than 10% of strategies effectively formulated are effectively executed – Fortune Magazine
The six-step strategy management process of “Execution Premium (XPP)” explains the robust methodology to execute strategies.
The first step is developing strategy: In this step, the mission, vision, and values are revised and drafted if don’t have one. This becomes the foundation and direction for all subsequent strategy management exercises. Projecting the value gap as per the vision and understanding how to close the value gap is critical.
The second step is to translate the strategy: The strategy is translated through a strategy map with a clear link to cause and effects for achieving the desired strategy. The Balanced Scorecard is drafted for the objectives identified in the strategy map. A balanced scorecard defines the metrics for each objective.
The third and fourth steps cover the alignment of everything else to the strategy. Key planning processes, key business processes, and employees are aligned with the strategy. Business planning and budgeting have to be aligned to the strategy.
The fifth step is to establish a monitoring and learning process to help manage the strategy execution process. Effective strategy review meetings are critical for strategy execution. All operational reviews are to be aligned to the strategy.
The last step is to test and adapt the strategy. The strategic choices and assumptions made earlier are tested and results are reviewed including emerging strategies.
Challenges in Balanced Scorecarding through spreadsheets
The majority of organizations use spreadsheets for performing strategy execution through the BSC process. The key challenges faced are as below
No standardization in the strategy processes:
Spreadsheets, by design, are ad-hoc and individual.
Email substitutes for any systematic workflow and time are often wasted on data contributions and review.
The traceability of the template version is a big problem.
Formulas written in excel files are extremely error-prone and hence take more time for data validations.
Lack of data integrity and transparency:
Data security is a big challenge in the spreadsheet-based BSC process.
Version control is nearly impossible.
An audit trail is required by the BSC team but is very difficult to achieve if not impossible.
Lack of collaboration:
Collaboration is a major challenge in the spreadsheet-based BSC process.
Timely response by demand and supply teams is a challenge.
Speed is not a spreadsheet’s strong suit:
Handling large volumes of data is a challenge.
Data connectivity to multiple data sources is very complex for business users.
Aggregation and application maintenance:
Consolidating different worksheets is very complex and needs a lot of coding.
What if scenarios and simulations are not easy in spreadsheet-based planning.
If you are starting the journey of the Strategy Execution Process, the following steps could help you as a quick starting point.
Develop strategy maps with perspectives, themes, and objectives in alignment with strategy planning.
Develop a Balanced Scorecard with objectives, measures, targets, initiatives, and owners
Connect to different data sources (ERP, Excel, etc.) to populate planned and actual performance
Manage initiatives through performance reporting
Prepare for a strategy review meeting to measure performance and initiative performance
Conduct strategy review meetings and note comments.
Make sure that there is no debate on the measure formula and data. The discussion should be only on numbers.
Inputs & Enablers to BSC process:
The following are key enablers for the strategy execution process
Value gap analysis
Business Plan & budgets
Actual performance numbers
Strategic initiative performance
Dashboards & reports
Strategy communication & action items
fruiStrategy empowers you to execute strategies consistently by linking strategy plan to strategy execution and aligning the whole organization’s actions towards the strategic direction. You can establish a robust strategy execution process empowered by plug-and-play modules to achieve overall organizational transformation in a systems driver approach.
It is a comprehensive strategy execution solution built on Dr. Kaplan & Dr. Norton’s Execution Premium Methodology and powered by proven best practices in OKR, Project Management, Risk Management, Strategy Planning, People Performance, and Organizational Performance.
fruiStrategy enables you to integrate all systems to record actual performance of measures, perform strategy review meetings effectively, review the cause and effects of strategic outcomes against measures, and link business planning, budgeting, and operational planning processes.
Please contact Shaik Abdul Khadar, Strategy Management Expert at [email protected] or +917799798333 for a quick demo or more information.