Agility is a broad concept: the term itself became a buzz word with a wide range of meanings from a software development technique to a general business management practice. Agility is not just about making things faster, I’d say that the most important benefit of agility is a cultural shift:
- Focusing on delivering value rather than on “doing the job,”
- Implementing retrospective reviews and transparency rather than mandating goals and using formal reporting.
Strategy or balanced scorecards incorporate many ideas of agility, but even the best training and respective implementation won’t be able to change the culture in the companies where a certain level of business maturity was not yet achieved.
We implemented a strategy scorecard, but…
Business professionals often say that the scorecard was successfully implemented in their company, but…
- Employees don’t want to get involved,
- Top managers are not that engaged as they were in the beginning,
- Scorecard was not updated for a long time,
- The list goes on…
How to fix these problems?
Scorecards are a business “hardware,” a culture is a business “software”
Let’s start with an agreement that we actually faced with two types of problems. I’ll use an analogy to illustrate my point: in computers we have hardware, but hardware is useless without software. The same applies to the business performance management:
- Scorecards and supporting performance data are the “hardware” of your business, but they are useless without…
- “Soft” parts – culture, values, and management skills.
When analyzing the issues mentioned above we see that some of them appeared because of the problems with strategy maps and performance indicators (“hardware” part of the scorecard), but in the most cases the real problem is with the management culture in the company or what we call “soft” parts of the scorecard.
The solution is to work on the “soft” parts of the scorecard, and implement some ideas promoted under the “agile” buzz word.
Step 1 – Make sure there is a good “hardware” part
The first important step in achieving agility is to understand that business scorecard with supporting data form a “hardware” part. Make sure that you have a good “hardware”:
- A well-described strategy with business goals and with the cause-and-effect logic that stands behind these goals.
- A set of well-defined leading and lagging indicators aligned with important business goals.
- A formal accountability via action plans aligned with business goals and performance indicators.
- A good balanced scorecard software is used (try our BSC Designer) for strategy visualization and automation of the data input.
This “hardware” part is a necessary base to develop a “soft” part.
Step 2 – Identify cultural problems that affect execution excellence
For sure, the “soft” part is the most challenging one. You might face such problems as:
- Missing employees’ buy-in and motivation to use the business scorecard,
- Lack of sponsorship by the top managers, and
- The problems with continuous usage of the scorecard.
Instead of fixing the mentioned problems (they are actually just the symptoms), I’d suggest to focus on the leading factors. In 99% of the cases the problem is actually at the cultural level.
Let me share some of the examples:
A company wants to improve customer service by focusing on “Time to resolve problem rate” indicator; but employees start calling to each other with the only goal being one to game the indicator.
Get rid of the KPIs that are the part of “carrot and stick” motivation model! The execution is not just about monitoring indicators value – properly defined and explained business goals are much more important.
A company wants employees to take into account business context and collaborate with other departments when working on the project, but when we review the actual work flow, we see that it looks like isolated silos where teams are at war and don’t exchange any ideas.
Break silos! Get people from different business units into one room, start the discussion around your strategy and how you are going to execute it!
Employees are asked to achieve excellence in whatever they do, but was the excellence achieved in the management itself?
The execution is not just about setting stretch goals and assigning budgets, it is more about the discussion and education that leads people to understand the problem better and come up with a good solution. Learn to execute! (See Step 4 below).
Step 3 – Update company’s culture; introduce transparency
Prepare an action plan to address the problems identified before. Here are some books about organization culture that I do recommend:
- Organizational Culture and Leadership by Edgar H. Schein
- Delivering Happiness: A Path to Profits, Passion, and Purpose by Zappos CEO Tony Hsieh
- Tribal Leadership: Leveraging Natural Groups to Build a Thriving Organization
One of the things that you might change right away is to introduce more transparency to your business by start talking about your strategy.
- In agile, the term “transparency” is used often. It doesn’t mean you need to publish all your plans on the Internet and ask your competitors to review them. No, we don’t want to reduce things to the absurd. But how can you possibly ask your team members to contribute when they don’t have a clear picture of where the company is going.
Think about this! The next time you are going to talk with your team about “objectives” and “tasks” make sure that you have explained the strategy context well enough.
Consider achieving more transparency in other aspects – from marketing to the incentives and rewards. It’s not about letting people know your secrets or not, it is more about building trust between leader and the team.
Step 4 – Execution via… Socratic dialogs
What about execution? I assume you don’t have any difficulties in setting business goals, and aligning specific action plans with these goals. Hopefully you’ll achieve success, but what will you do if you don’t?
- Do you actually lead your team or just give out orders? Look at your strategy map! Are those cause-and-effect links between business goals defined on high-level only (=useless) or there is good understanding of why and how your team is going to achieve these goals?
This understanding is achieved via the discussions around various aspects of the strategy. Running these discussions is another soft skill that one needs to master. I find the “format” of Socratic dialog very helpful in this case:
- Ask questions to your team,
- Help them to find the answers, and to formulate the new questions,
- Understand nuances of the challenge and respectively come up with better solutions.
That’s what execution is, it is about educating your team, not about mandating goals from top to bottom and waiting for the KPIs to return into the green zone.
Do you need a starting point for those Socratic dialogs? Review your old plans and commitments (it’s very similar to the retrospective in agile):
- Were agreed goals achieved? What was done well? Where can be improved?
- What story do performance indicators tell you today?
One of the best books on the topic of execution is “Execution – The discipline of getting things done” . It is an excellent real-life guide on improving execution style. Before reading the book, I recommend starting with this short interview  with one of the co-authors – Larry Bossidy – to make sure that your management style actually resonates with his ideas.
Step 5 – Implementing the culture of repetitive excellence
And that’s it? We implement these ideas and everything suddenly starts working properly? Not yet! What we want to build is not just some culture, but a culture of excellence. Such big changes are not done in one day… I like this saying very much:
We are what we repeatedly do. Excellence, then, is not an act, but a habit.
Think about the habits that exist in your company:
- If they actually support the culture that you want to build?
- If your leadership efforts create the right habits?
Probably instead of finding another KPI you’d better find a keystone habit like we discussed in this article before.
I hope with these 5 steps you’ll be on the right track in achieving agility for your business scorecard. It’s just the beginning of a very interesting journey (don’t forget to share your thoughts and road stories in the comment box below), that hopefully will not only update your performance management approach, but will bring a culture of continuous excellence to your team.
- ^ Strategy Maps: A Guide for Getting Started, Aleksey Savkin, bscdesigner.com
- ^ Leading Measures – Specific Recommendations to Find Them, Aleksey Savkin, bscdesigner.com
- ^ “Execution: The Discipline of Getting Things Done,” Larry Bossidy, Ram Charam, Random House Lcc, 2003
- ^ Larry Bossidy: The Thought Leader Interview, Strategy + Business, 2002
- ^ Will Durant, The Story of Philosophy: The Lives and Opinions of the World’s Greatest Philosophers (1926) summation of Aristotle‘s ideas