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Do you need a checklist for your Balanced Scorecard?

Posted November 9, 2012 1:23 PM by Ted Jackson

If you have met me or spoken to me about the Balanced Scorecard, I’m sure you have heard me say “the Balanced Scorecard is just a framework for managing your strategy.  It should make managing and achieving your strategy easier.  If you are spending more time on the framework than on your strategy, you are not doing something right.”  So, this week, I was finishing the book “American Icon” by Bryce Hoffman, and I came across a passage that reminded me of another book called “The Checklist Manifesto” by Atul Gawande.  So, what do these books and the Balanced Scorecard have in common?  To me, they are both a reminder that you can’t just have a Balanced Scorecard or just have a strategy.  You actually must do something with it in order to achieve your strategic goals.

Let me clarify a little bit.  The Checklist Manifesto is a book about how creating a simple checklist can help you perform really well.  The two primary examples in the book are about flying a plane and performing surgery in a hospital.  If you have a simple checklist, then you will know the other people in the surgery room, be on the same page for the actual operation, and know many of the primary risks that can go wrong.  The American Icon is about how Alan Mulally came into Ford and saved it from the financial crisis when the other two major auto manufacturers in the US had to be bailed out by the government.  Mr. Mulally instituted weekly management reviews with data driven decision making.  So the paragraph from American Icon that brought it all together for me was one where Hoffman was quoting Mulally.

“You’ve got to trust the process.  You need to trust and nurture your emotional resilience,” he said. “Do you have a point of view about the future? Check. Is it still the right vision today? Check.  Do you have a comprehensive plan to deliver that? Check.  If you get skilled and motivated people working together through this process, you’re going to figure it out.  But you’ve got to trust it.”

So when I read that passage, I thought to myself, do you have a strategy map?  Does the map still reflect the strategy of the organization?  Are your measures and initiatives supporting this map?  Have you aligned divisions and departments around the strategy?  Are you having regular strategy review meetings?  Yes, then you have a much better than average chance of achieving your strategy.

It sounds easy, but this quote from Mulally is from when he is 4-5 years into this process.  It takes work to ingrain a process and get people to trust that it will work.  It took the <a href=http://www.ascendantsmg.com/blog/index.cfm/2012/9/24/What-do-Alabama-Football-and-the-Balanced-Scorecard-have-in-Common>Alabama Football</a> team 3 years and now it is executing like clockwork.

As for the checklist, imagine you went into every strategy review meeting with a checklist.  I’m sure you are doing strategy review meetings either monthly or quarterly.  Before the meeting, have you sent out information in advance? Check.  Have you identified the issue? Check. Do you have the right people in the room to make a decision about the issue?  Check. Do you have a process for following up from the decision with both actions and communications? Check.  OK, you are well on your way to executing your strategy.