Use Balanced Scorecard at most organizational levels – interview with James Creelman
10 questions to Balanced Scorecard Expert James Creelman, independent Balanced Scorecard consultant and author
1. Please, summarize in few words what is your expertise and background with Balanced Scorecard.
I have been involved with the Balanced Scorecard since 1993. I am an author of many Balanced Scorecard books and advise clients throughout the world – several of which have achieved Hall of Fame status. Dr David Norton has called me “the foremost chronicler and historian of the Balanced Scorecard movement.”
2. It is known that Balanced Scorecard is used by more than 50% of Fortune companies. Do you think this concept is for big companies only?
Absolutely not. The Balanced Scorecard is used successfully from companies of any size and in any industries or sectors. If you have a strategy you can successfully deploy the Balanced Scorecard.
3. While BSC concept is popular now, what other business performance measurement concepts can you recommend for companies to consider?
There are several emerging versions of the Balanced Scorecard that are worth looking at: most notably in my opinion the Value Creation Map pioneered by the Advanced Performance Institute in the UK. The scorecard also works well alongside frameworks such as Malcolm Baldrige or EFQM.
4. Please, share your opinion about key ideas that should be kept in mind for successful implementation of BSC?
The most important component of a Balanced Scorecard is the Strategy Map, followed by the strategic initiatives. They are then followed by KPIs/targets. Keep the Strategy Map simple; understand the difference between objectives and initiatives and recognize that cultural barriers will likely pose the greatest barrier to scorecard success.
5. The BSC is a business performance measurement concept, but should only top managers and CEO use it? Or should it be used company-wide? Should BSC be implemented in all departments or for instance only in HR?
Firstly, the Balanced Scorecard is not a business performance measurement concept. It is a strategic performance management framework of which measurement is but one component. A scorecard can be used at most organizational levels from the corporate level down to departmental level. The important question is “what value had the scorecard at this level – how will it improve performance.” There are many examples of good function-level (HR, finance, etc) scorecards.
6. While there are certain benefits of BSC, do you see there any limitations or possible problems? Some areas where BSC does not work properly or is inefficient.
Don’t expect too much of the scorecard – it will not answer all of your problems. And remember it is a strategy management framework not a system for managing operations – you need an operational dashboard for the latter, which is different to a Balanced Scorecard.
7. The BSC concept is discussed widely. What do you think, if most companies understand the importance of BSC development? Are they willing to invest in BSC? Is it hard to get decisions makers to conclusion that it is necessary to use BSC?
Decision-makers will use the Balanced Scorecard if they can see the value. If not, why should they? What we need to do better is get the message across about the value. Remember, CEOs etc get bombarded with lots of ideas. The scorecard has to stand out from the crowd to be of interest. We have enough case studies etc now to make the argument.
8. The practical implementation is always as important as theory itself. There are a lot of ways to implement BSC from simple Excel files to software, web-based services and full integration with company business system. What do you think is the best implementation strategy in terms of quality/price? What type of tools would you use to do implementation?
Start with office tools, etc. After a year or so, migrate to a scorecard automation tool.
Automation enables a company to get the best out of the scorecard – progress tracking and reporting, best practice sharing, etc.
9. There are companies that already use BSC, we read about them in business magazines, we read their case-studies and success stories. What advice would you give companies that just start considering the implementation of Balanced Scorecard concept?
Keep it simple. Understand the importance of strategy maps and that the maps should comprise objectives and not initiatives. Also people will only buy-in to the idea if they can see how it will make their job easier – if it’s just one more thing to do then they will resist: and rightly do. Also remember that the scorecard is not a measurement system – this is the biggest mistake that companies make and stop them securing the real benefits of the approach – which is around step-change, breakthrough performance improvement.
10. Thank you very much for your answers. I think our readers would like to know more about your company and service you provide. If possible share also your detailed experience with Balanced Scorecard here.
Have written 20 management books/reports, eight of which are on the Balanced Scorecard. I have three new scorecard books due for publication this year. I run workshops and conduct consulting assignments for companies throughout the word: two companies that I have advised have received Balanced Scorecard Hall of Fame awards from Dr Kaplan and Norton.
I can be reached at james.creelman<at>googlemail.com