Re: Balanced Scorecard

["Allen Woods" <allenwoods@jit-software.com>]

Malcolm,

I was generalising.  The guys from the Balanced Scorecard Collaborative can
build scorecards.  When all is said and done, it is what they specialise in.
No argument, but they are very expensive, and out of the financial reach of
so many organisations who could use their expertise.

It seems to me that there are more than enough people about who say that
they are building a "balanced scorecard" when in reality they are merely
grouping together performance targets into a set of loose collections that
are meant to reflect "what we need to know", but do no such thing and in
fact present summary details of "what can be measured".

I have now built four IT infrastructures to support balanced scorecards.
The reasons I say that people do not know how to build scorecards are
because the following do not seem to form part of any plan.....

a.    As pointed out by someone else, when you define a performance
indicator, a key factor in its specification should be a description of the
mathematics involved, data sources and so on.

b.    Performance Indicators are triggers for investigation, not decision
taking.

c.    No Performance Indicator sits in isolation.  Within a scorecard
framework there are links cross perspective, card to card and so on.  For
example, if you have a training budget of £20m, and  out of that must come
an additional 20 Chartered Engineers.  Then you should be able to see a
detectable improvement in effectiveness and efficiency once you have paid
for and trained your engineers.

d.    Indicators will probably change in importance over time.  It is
unlikely that a set of indicators defined today will be relevant in (say)
five years time.  A lot of "scorecard" systms I have seen are not flexible
enough to cope with this.

e.    If you set out on a scorecard implementation exercise, you will more
than likely end up heavily influencing the design of the IS/IT
infrastructure of the organisation being measured if for no other reason you
will find things that are not measured that need to be.

f.    Designing and defining a set of performance indicators is very often a
project in its own right.

One of the good points about a scoercard design exercise is that it tends to
bring out the benefits of a systematic approach to management planning.

Oh, and for a good general purpose description of the practical problems
that designing scorecards generates, please take a look at
http://www.schneiderman.com. excellent stuff.

Take care

Allen