Balanced Scorecard
Collaborative
The organization Balanced Scorecard
Collaborative, which was formed by Kaplan & Norton (the
co-founders of the Balanced Scorecard Concept) was created to
establish and nurture the practice of Balanced Scorecard
implementation within organizations. The article announces the
launch of a new book "The Strategy Focused Organization: How
Balanced Scorecard companies thrive in the new business environment.
Devising strategies to generate superior
performance has been a major focus among management, consultant’s
etc. However, the article points out that good strategy are not
enough. Many times, companies’ strategies fail, not because the
strategies are not good ones, but rather implementation is a
top-down, financially driven and tactical approach. Some statistics
given in the article include:
·
Only 25% of managers have incentives linked
to strategy
·
60% of organizations do not link budgets to
strategy
·
85% of executive teams spend less than one
hour per month discussing strategy
The Balanced Scorecard Collaborative is an
essential element to have to examine and pinpoint an area to observe
in detail, but it should not and can not be the only tool an
organization uses to evaluate their organizational issues or create
their organizational strategies. One should also examine key
financials (balance sheet, cash flow statement, ROA, ROE, etc.),
operation standards, workforce and many other elements that comprise
the organization
Balanced Scorecard
Collaborative Planning and Performance Management: The Balanced Scorecard Collaborative
Planning and Forecasting blueprint integrates a company's strategy
definition and planning process with that of its partner, with
respect to both sourcing and sales/distribution. The scenario
consists of two cycles: The first one covers strategic planning and
strategy modeling, and takes place every three or six months. The
second one covers operative planning and rolling forecasting, and
takes place on a monthly basis.
In the strategic cycle, the company makes a
proposal for a collaborative strategy between the sourcing partner,
the sales/distribution partner and itself. This proposal is modeled
in a Balanced Scorecard and is sent by e-mail to the partners. This
e-mail includes a link to the SAP SEM system where the Balanced
Scorecard Collaborative runs. This ensures that the partners can
give their feedback directly and change data online. All
participants then meet at the company's site in a Management Cockpit
Room to discuss and finalize the definition of the strategy and the
Balanced Scorecard, including strategic objectives and measures.
They also agree on a strategic plan, quantify targets for several
measures, and cascade the Balanced Scorecard into three individual
scorecards for each participant.
In the Balanced Scorecard Collaborative
operative planning and forecasting cycle, every participant collects
market data and speaks to their partners. For example, the partner
responsible for distribution discusses plan data and sends a
planning sheet to the retailers for their input. Partners
responsible for sourcing must discuss plan data with manufacturers
in order to get information about their capacities.
As a result of these discussions and feedback
sessions, an operative plan is drawn up. Once again all participants
meet in the Management Cockpit Room to finalize and agree on this
operational plan. Furthermore, they compare the strategic plan with
the operational plan and make sure that the two are in line with one
another. In the next step, actual data is collected and consolidated
in the consolidation engine. This consolidated data can be compared
in the Corporate Performance Monitor/ Balanced Scorecard
Collaborative, and action must be taken if there is any deviation.
This cycle occurs on a monthly basis and, every three months, the
operational plan is compared with the strategic
plan.
