As an American who recently celebrated the 4th of July, or our Independence Day, I am reminded of a quote by John Gunther. “Ours is the only country deliberately founded on a good idea.” It reminds me that as an American it is in our DNA to always try and find a better way. We are an innovative and idealist nation and have been so since our birth 236 years ago. It is in that spirit of innovation and improvement that I want to revisit a previous topic that I blogged about a few months back, Business Balanced Scorecards. It was one of our most read blogs so we want to take a deeper dive into this subject matter. If you haven’t read “Drawbacks of the Business Balanced Scorecard” I highly recommend that you do so (or any of our blogs for that matter).
The image below is from Bain Consulting on Business Balanced Scorecard adoption and satisfaction.
Again, business balanced scorecards were developed 20 years ago to help organizations to better articulate their strategy. It is organized into four main categories (financial from lagging indicators of financial performance to leading indicators of customer performance). This was truly a break through idea on improving execution and communication of strategy. So much so that 50% of all Fortune 1000 companies were using a version of the Business Balanced Scorecard by 2000 and that number has stayed steady since then(per both Bain Consulting and Gartner).
Some other facts:
- 90% of all well formulated strategies fail
- 27% of a typical company’s employees have access to it’s strategic plan
- 60% of organizations do not link their strategic priorities to their budget
- 95% of all employees do not understand their organization’s strategy
- 7 out of 8 companies failed to achieve profitable growth despite 90% of the same companies having strategies with higher targets
Given these frightening statistics have Business Balanced Scorecards achieved their goal especially when so widely adopted for so long? Let me be clear, using a BBS is better than not using any tool however, in the spirit of America being founded on a good idea and constantly looking for a better way there is clearly room for improvement! Even if you are a big fan of BBS you have to agree with that.
We highlighted some of the problems with this tool in a previous blog so I won’t get deep into that. Many organizations in my time implementing Business Balanced Scorecards for multi-billion dollar corporations take time aggregating the data and review it in frequently. By that time what is intended to be a leading indicator of strategy execution is old news and the BBS doesn’t give much as to the cause. You also have 4 main categories but several KPI’s per category to review performance on. This in our opinion doesn’t cut it in the 21st Century, an age of information, speed, big data, and for executive teams with little time.
We at CNC Strategy Cloud Solutions, Inc have found a better way that allows companies to see a snapshot of their business by logging onto a website that is updated in real-time. We have the data aggregated in finance, people, and processes. This allows a company to course correct if necessary and dramatically increases their odds of executing on their stated strategies and actually does what the Business Balanced Scorecard was meant to do.
“You can’t expect to meet the challenges of today with yesterday’s tools and expect to be in business tomorrow.” Unknown Author
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