Situation: A company is investigating Balanced Scorecards as a management tool. They want to get the perspective of others who have used Balanced Scorecards on how these are used and where they are effective and ineffective. Do Balanced Scorecards aid decision-making?
Advice from the CEOs:
- To make good decisions in times of uncertainty one needs readily available up-to-date information on the key drivers of the business. Balanced Scorecards answer four important questions:
- How does the customer view us? (Customer metrics)
- At what must we excel? (Key Performance Indicators and Internal Business Processes)
- How do we continue to improve and create value? (Learning/Growth & HR metrics)
- How do we look to our investors? (Financial metrics)
- To effectively use Balanced Scorecards employees must be empowered to make necessary changes, and there must be an effective system for prioritizing efforts – so that when a company has multiple opportunities they can decide what to do first, second, and so on.
- Empowering people to make a necessary change
- To improve project estimating systems, identify those who are best at estimating project timelines and costs. Have them develop a template of their process, focusing on how they complete projects on schedule. Implement this template across your estimating function.
- To improve project on-time completion, shift the development focus to calendar and, if necessary, narrow specs to hit the deadlines.
- To focus scope of work issues, decide test procedures up-front then work on deliverables that will determine whether requirements have been met. From this, develop project assumptions and budgets. Create a template that focuses on internal best practices and clones these for other projects.
- Queuing Systems & Priorities
- Define the vision of success. Then drill down to what’s most important. Look at impact of different options on the organization and performance. Finally, force this issue – if we can only do three projects what will they be?