Sculpting the Perfect Balanced Scorecard

Sculpting the Perfect Balanced Scorecard

The French aviator and writer Antoine de Saint Exupery once noted,

“Perfection is not when there is no more to add, but no more to take away.”

That sentiment seems rather quaint, or at least iconoclastic, when placed in the context of today’s marketplace that constantly bombards us with new products, new features, new ideas, and always more, more, more. In this era of mass customization, we can have whatever we want, whenever we want it, and most of us want more of what we want. But upon quiet and careful reflection I believe Exupery’s suggestion of ‘less being more’ is absolutely the case – in all facets of our lives.

Let’s focus our discussion on the world in which I’ve been dwelling predominantly over the past 15 or so years – that of the Balanced Scorecard. When Kaplan and Norton developed the Scorecard system back in 1990 they were attempting to solve a measurement problem – “How do we balance the historical accuracy and integrity of financial metrics with the drivers of future financial success?” Their simple, yet revolutionary, response was the Scorecard framework which prompted organizations of all sizes, shapes, and colors to generate performance measures in four balanced perspectives, derived from the organization’s unique strategy. Early adopters garnered swift results from the tool using a palette of often just 10 to 15 measures. However, as the Scorecard gained rapid acceptance users began to opine, “If 15 measures are good, 30 would be even better!” Eventually, many organizations saw their metric populations swell to over 50 or even 60 indicators. Certainly not a manageable number, and not a useful device when attempting to tell a coherent story of your strategy.

The history of Strategy Maps followed a similar trajectory. Originally, proponents of these powerful communication tools attempted to depict their strategies using no more than 20 objectives spanning the four perspectives. But soon the tempting call of more, more, more proved too powerful to resist and many Strategy Maps began to feature well over 30 objectives swimming in a sea of arrows, lines (some dotted some straight), and assorted geometric shapes. Instead of providing a simple and clear way to describe and articulate strategy to a workforce starving for simplicity these dizzying charts produced nothing but headache-producing cases of MEGO – my eyes glaze over.

When we overstuff our Strategy Maps and Balanced Scorecards with ever-increasing numbers of objectives and measures we’re falling prey to Peter Drucker’s admonition of creating ‘hero sandwiches of good intentions” – layering on heaping helpings of expectations that cannot possibly be fulfilled. In my experience as a consultant, working with organizations around the world, I have found there is an almost overwhelming temptation when creating these tools to not leave anything out, as if that would represent the cardinal sin of strategy execution. Most clients believe that by simply listing something on the Map or creating a corresponding measure it will magically lead to execution, no questions asked. But real life doesn’t work that way, and in fact crowding the Map and Scorecard with extraneous objectives and measures violates the number one rule of strategy and strategy execution – focus. Strategy, as is often pointed out by the pundits, is as much about what not to do, as it is about what to do.

A great sculptor, regardless of the medium of choice – wood, clay, stone – begins with an amorphous mass of material in front of them. Slowly they chip away, guided by a clear and compelling vision in their head that directs each stroke of the hammer or knife, until from that nebulous form their work of pure art emerges. Creating a Strategy Map and Balanced Scorecard is no different. We must be diligent in constantly focusing on our vision and strategy when crafting these tools of strategy execution. The question to guide us as we sculpt, as Exupery astutely notes, is not how much more we can add, but how much we can take away. Keep chiseling at your strategy, continue to refine until you reach your unique essence. Ask yourself at the insertion of every new objective, is this a critical enabler of our strategy? Will achieving this objective lead us to our strategy and ultimately our vision? Is the objective consistent with others and a key chapter in our strategic story?

Sounds easy enough, right? In fact, this should give you a leg up because you don’t have the pressure of generating a great number of objectives and measures. Well, in fact, it’s far more difficult. There is an old story, variously attributed to Mark Twain, Pascale, and others that goes something like this, Twain (my choice) once wrote a long letter to a friend which he opened by saying, “I tried to write a short letter, but it was too hard, so I wrote a long one.” Whenever we’re forced to exercise true strategic choice, ranking the possibilities and applying preferences, the stakes are raised, and the work becomes significantly more challenging. In our case, creating Strategy Maps and Balanced Scorecards, from a vast universe of possibilities we must cut through the clutter, ruthlessly wielding our strategic machetes until we uncover just those objectives and measures that truly tell our strategic story.

As with most things in life, when the challenges are amplified the rewards are commensurately satisfying. You’ll discover that by critically examining your assumptions, challenging your existing beliefs, and steadfastly focusing on your strategy you will ultimately create a set of objectives and measures that represents your unique essence as an organization and will clearly and powerfully communicate your strategy. Happy sculpting!

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