Balanced Scorecard is Just Too Much

One of the important elements to getting an aligned, coordinated, synchronized organization is to get everyone focused on one or two strategic directions. For over a decade and countless organizations, Kaplan's and Norton's Balanced Scorecard has provided guidance on maintaining focus on many facets of your business. In concept, it sounds wonderful. There are many aspects of the business that shouldn't be neglected. However, they don't need to be measured and reported, or elevated to a strategic direction. Inherently, the power of becoming a strategy is diluted through a balanced scorecard approach. Success will be elusive to those who don't focus on one or two strategies.

Assume you want to keep sight of five facets of your business: operational, financial, environmental, regulatory compliance, and employee satisfaction. In any given year or biennium, perhaps you decide on 2 or 3 goals within each facet. That's a total of 10-15 goals. Each of your eight department heads will need one or two (or more) goals to support each of those goals, and create action plans around them. Thus, the departments have 20-30 goals.

Individuals or sub-departmental teams will have one to two goals or action plans to support the departmental goals. Now they have 20-60 action plans. If they are good team players, they will also support other departments' efforts to make improvements. Any one person is trying to be intentional to improve 40-120 areas of the business.

There are only 250 working days, typically. How much time do you think will be devoted to each of the goals or action plans? With a little bit of time, how successful will you be at significantly improving any one aspect of your business?

A better tact would be qualify function deployment (or hoshin kanri, as it's been known for decades). Pick one, maybe two, strategic directions and focus the whole organization on it. It should be significant in that a substantial improvement will dramatically change your market placement or your operational effectiveness.

At several companies, I know, this practice has allowed for a greater allocation of resources being targeted in key areas. Those companies have been able to gain market share and become more profitable.

At this time of year, you probably have already set your goals for the year. However, because the business world is so dynamic, it's preferable to make some mid-year corrections. Consider reducing the focus to one or two and make a remarkable change in your business by the second half of the year.