Tagged: balanced scorecard

Sixty eight

BB’s “Social Business #Fail Of The Week” is a popular read on our social network in which he documents, with biting humor, his grievances with organizations that don’t appear to be working hard at social business just yet. He refers to them collectively as the Antis, as in anti-social, and the inevitability of their decline (or at least of their current way of doing business) as The Extinction.

He told me he finally appreciates the Balanced Scorecard, attributing that to the simple fact that we now have worthwhile mission and vision. I suspected there was more to it than that and he took my provocation as a theme for his weekly ‘column’. He pursued the theme over a couple of months, eliciting comments and contributions from his colleagues, or “my readers” as he likes to say with a feigned journalistic twinkle in his eye.

This thematic series of posts concluded with a surprising description of social business as BB sees it – a business of the people, by the people, for the people. He made sure to define ‘the people’ as all stakeholders. Paraphrasing Abraham Lincoln’s commitment to the principles of human equality like this is a powerful device and I’ve made a note on my to-do list to explore the relevance and ramifications of this viewpoint more deeply.

We didn’t know BB had such talent as a copywriter – actually I’m not sure he did either – and Michelle is increasingly tapping this talent.

Sixty one

It’s nine months since that lunch with William and chat with Saket, and nearly a year since the pivotal away day. Of course, a large part of events has been change management. I won’t dwell on change management here but suffice to say our biggest challenges and opportunities in that respect have been people, people and people. And tech. As my old plant manager would say, we’re all in change management.

I’m wondering whether an organization designed around influence flows might find change management easier. It’s too early for me to conclude with certainty but it looks like it could.

Marcus, John, Georgio, Michelle, Yvonne, Tom and I form the steering team. We invite Saket in once a month to challenge our analyses, assumptions, conclusions and plans. He’s rather good at that, as you’ve seen.

We outlined a project plan to execute the influence strategy. We qualified the investments required in people, process and technology courtesy of our strategy maps. And we identified the dependencies and the timeline.

We developed a role and person specification for an individual to lead the transition, and it rapidly became clear that it had Marcus’ name all over it. We promoted two of his operations team to take up much of his existing mantle, leaving him with the majority of his time to crack on with social business. He has a team of four working with him in The Nerve Center, as it’s been named, and they obviously lean heavily on the steering team for our respective disciplinary expertise.

Note that I don’t write ‘functional expertise’. It has become increasingly clear that the typical functions in organizations really are a manifestation of the 20th Century perspective of business, a result of the tectonic forces of that period, and not necessarily the organs demanded of a 21st Century entity. Don’t get me wrong, I’m not saying that there’s a radical departure necessarily, just that the norms we associate with today’s functional labels narrow our view of how the business might operate.

Interestingly, Marcus’ team had been seconded to The Nerve Centre as if they would return to their previous departments at some point. It took a week to put ourselves right about that.

Marcus owns the Influence Scorecard. He maps influence flows on to our strategy map and, to paraphrase the Balanced Scorecard creators, helps us define the marching orders we need to become a social business.

Forty four (ii)

How might we go about socializing the enterprise?

We need to improve our understanding of influence flows first off, and our facility to think and behave in these terms universally (as opposed to just in marketing and PR). And develop our assets accordingly.

Sarah commented that the Balanced Scorecard approach considers how best to develop three types of assets in improving an organization’s capabilities to execute the strategy. They are human capital, information capital and organization capital. The first needs no explanation. The second refers to IT capabilities, and the third to the leadership, culture, teamwork and alignment of the organization and activities to the strategy.

So, it seems logical that we might consider the process of becoming a social business in terms of developing the human, information and organization capital appropriately.

We thought about ‘influence flows’ as a strategy that we can run through the normal strategy maps and Balanced Scorecard process. But then we noted that the flows of time, money and materials weren’t strategies, so why would influence flows constitute a strategy per se. Rather, strategy is defined as identifying those processes that the organization decides it should do better than the competition in order to secure it the advantage it desires in the marketplace.

In short, focusing on influence flows isn’t a strategy, determining which influence mechanisms and processes to improve is.

I was excited about where this was going but time was flowing by. So, with an hour of the day remaining, I asked who’d like to go out to dinner that evening, if they didn’t have prior commitments of course, to seize the momentum. Everyone was up for it and I made a reservation at Vincenzo’s. But we weren’t done at the hotel just yet.

Saket introduced everyone to the Influence Scorecard approach, which, like the Balanced Scorecard, is a management approach rather than a yardstick per se.

The Influence Scorecard can be considered as a subset or augmentation of the Balanced Scorecard containing all the influence-related objectives and metrics extracted from their functional silos.

Once a company’s influence strategy is defined and influence objectives articulated – by each of the six influence flows and by stakeholder – influence flows can be drawn explicitly in the enterprise strategy map.

Sarah asked if the Balanced Scorecard was a prerequisite of the Influence Scorecard. Saket replied that any organization that hadn’t yet implemented well defined and disciplined business performance management wasn’t yet in the best position to socialize the enterprise effectively. And transitioning to social business cannot be accomplished in a week or two; it will take place over a number of years although strategic value should be derived each and every quarter if the process is managed well.

ACTION: Sarah, Yvonne, Michelle to work with Saket and learn more about the Influence Scorecard.


Sarah let me know during our meeting that she’d asked Saket Sahni to introduce himself that afternoon. Saket is the consultant that had helped define and design Attenzi’s Balanced Scorecard, and he was coming in specifically to do some work with Michelle (CMO).

Only two things appear to ring Saket’s bell – business performance management and the movies. “What we’ve got here is failure to communicate – Cool Hand Luke, 1967”, is just one of the ways Saket refers to organizations without strategy maps and effective BPM. He’s also convinced that Captain Jean-Luc Picard’s USS Enterprise employs the Balanced Scorecard despite there being, unsurprisingly, no reference as such in the Star Trek corpus.

Now what would life be without such characters as Saket? The meeting was memorable.

Saket challenges business dogma. I didn’t find him prescriptive, unless his prescription entails leaving you with a dose of great questions:

In the current times, if we don’t know what the world will look like next month let alone two quarters down the line, why do we develop twelve-month tactical plans?

The ‘market’ is the name we give to individual human agents in the aggregate, so what do we want each of those humans to do exactly? Do current statistical analyses really capture market patterns?

“Aboard ship there’s a danger in having too much of anything for then one is bound to have too little of something else – Mutiny on the Bounty, 1962”; does the good ship Attenzi have the right balance?


Attenzi’s strategy was well articulated and well mapped, if lacking what a serious management consultant might call va va voom. The Balanced Scorecard was, in my opinion, well formed to guide organization-wide performance in executing the strategy. And generally most targets were mostly met most of the time. But let me be more exact.

The strategy was, as one would expect of any decent firm, customer-centric in character. The concept of customer-centricity emerged with the advent of integrated marketing communications during the mid-90s, replacing the traditionally inward looking nature of large firms. This new emphasis aimed to place the customer’s concerns and happiness slap bang at the centre of business decision-making.

So yes indeed, Attenzi sought customer insights to inform new product development. It pursued product design that would exceed the customer’s expectations for style, usability and durability. It trained sales staff to match the specific customer’s needs with specific product features. It maintained a CRM system and followed up proactively as best it could post-sale to ascertain customer happiness. It geared post-sales service to cause the customer minimal pain.

And so on.

And so forth.

I know that we’re nearly two decades through customer-centricity, and if you haven’t seen it lived universally, you will have at least heard it spouted universally.

Eleven (ii)

The Balanced Scorecard is the dominant BPM framework. There are other approaches to business performance management, and they share similar traits.

I remember wondering out loud, if three of the four Balanced Scorecard perspectives are non-financial, why was the process ‘owned’ by the CFO necessarily. Sarah didn’t know exactly, so we just assumed it was a sort of default situation.

Eleven (i)

I’ll jump forward a few weeks shortly, but sometimes a lot happens in 24 hours, and this was one of those 24 hours. Not that I’m Jack Bauer or anything.

My meetings with Sarah had focused on the profit and loss, balance sheet, and cash flow statement. This one was going to be our first joint in-depth review of the company’s strategy map and Balanced Scorecard.

The Balanced Scorecard has gained traction as the dominant business performance management (BPM) approach, and my predecessor and Sarah’s had introduced it to Attenzi. I’ll explain what it is here in brief, but you can find a longer summary online by clicking here if you’re interested.

Fundamentally, traditional financial accounting is all well and good when you want to know how well you did last month, last quarter, last year, but it’s not ideal when it comes to understanding how today’s performance might pay off financially next quarter, or next year. In the jargon of business performance management, it’s a lagging indicator. Managing a company by financial reports alone is like trying to drive a car with only the rear mirror to go by. As the saying goes, don’t try that at home.

What’s more, 20th Century business was founded on tangible assets (land, plant and machinery). The 21st Century business is more reliant on intangibles (intellectual property, brand, reputation), for which traditional accounting analyses are poorly designed.

So the Balanced Scorecard approach aims to get a balance of measures – as the name implies – complimenting the financial metrics with non-financial measures associated with customers, internal processes, and aspects of learning and organizational growth. These are called leading indicators, and each of these groups (or “perspectives” in the jargon) supports the one before it.

The precise mix and definition of measures depends entirely on what your organization is setting out to achieve, and the strategy it has developed in order to achieve it. And you can map your strategy onto your operations with appropriately named strategy maps, helping you identify the things you need to invest in to improve business performance.

Give anyone the incentive to maximize one metric and they’ll blast it, most likely with collateral damage to other important aspects of the work in question. Ask any individual to maximize six-dozen metrics in harmony and they won’t know where to start. People appreciate a small, select, balanced set of metrics to guide performance, to provide sensory feedback so to speak.