What is the best strategic model that will help you to link everyday organizational performance with core values thereby, driving your organization towards fulfillment in a long-term?
The answer is 'Balanced Scorecard'.
The balanced scorecard framework will assist you to connect the dots, in turn, creating the common ground between strategic and operational performance management.
The framework solves the issues such as lack of alignment, misallocation of resources, short-term focus, and a failure to perceive risk, among other things.
Organizations typically manage their long-term strategic performance independently from their short-term operational performance. A frequent, unintentional, result of this approach is that strategic objectives are not achieved, and operational objectives are.
This occurs because:
The performance management framework (“balanced scorecard framework”) provides that common ground for discussing and answering these questions and lays down a foundation upon which a successful performance management program can be established.
Performance management is comprised of four major sets of activities:
The framework below shows how alignment is done with the Deming improvement cycle of Plan-Do-Check-Act. The framework also aligns with the four sets of performance management activities. These sets of performance management activities are called phases in the framework. Shortcomings in implementing various aspects of these phases lead to the strategy achievement failures.
Each of the four phases of the framework has strategic and operational components. These components have the same name in each of their respective phases. The components are called Objectives in the Plan phase, Projects in the Do phase, Reports in the Check phase and Reviews in the Act phase.
Planning is the phase where performance objectives and standards are defined, articulated and communicated to the rest of the organization.
The description of the four phases above sounds a lot like any other management methodology. The difference with the performance management framework is that it considers the management of performance to be a system with two major components: strategic and operational.
Just like any system, the interface between the strategic and operational components of each phase of the performance management framework is where success or failure is determined. The framework identifies the practices and methods used to manage the strategic-operational interface within each phase of the Framework.
In the Plan phase, Maps are used to define the relationship between strategic and operational objectives. While there may be local operational objectives that do not necessarily have a relationship to the strategy, the bulk of the operational objectives should be short-term, local versions of the long-term strategic objectives. Maps, strategic and operational, provide a proven and easy-to-use mechanism for articulating and managing the objectives and their interrelationships and alignment.
Maintaining the Balance Determines the Success or Failure
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