Who is responsible for BSC implementation?
In order to make Balanced Scorecard project work it is necessary to assign tasks and responsibilities. At that there are many factors and aspects to be taking into account here. Every manager in the department is responsible for strategy maps use. There also should be a person who will be responsible for terms, format, graphs and assessments. Usually this is employee from control department. Promotion of strategy maps and Balanced Scorecard and education of personnel during the first two years should be controlled. This task may require creation of a special team which must be close to top management. If the company chooses to use IT solutions then someone should be responsible for this (as a rule this is employee from IT Dept). Since information is gathered on different indicators there should be a person who would perform analysis of cause and effect ties. Such analysis will make it possible to understand whether or not proposed cause and effect ties have worked. It will also help decide on changes in BSC.
Efficiency and implementation costs of Balanced Scorecard project will be influenced by the way roles and responsibilities will be shared. Key success factors imply the fact that top management has understood these roles in the correct way. People who will assume such responsibilities should possess sufficient knowledge and occupy relevant position in the company. Most of them will not spend their entire working time for strategy maps and Balanced Scorecard. That’s why top management should make sure that people involved in implementation of Balanced Scorecard will have enough time to assume these responsibilities.
Moreover, these people should be properly motivated and understand their tasks. It may take a long time before everybody in the company understands strategic concepts and the way their everyday job contributes to implementation of strategic goals. During this time it is imperative that everyone in the organization feels the top management truly believes in values, ideas and philosophy characteristic of Balanced Scorecard and strategy maps. People responsible for implementation and promotion of Balanced Scorecard should act like preachers, in a good sense of this word.
One of the major preliminarily tasks is involvement of personnel in implementation of Balanced Scorecard and information support of the vision and strategic goals in the company. Most companies that implement Balanced Scorecard focus on agreement between strategic goals and goals of individual departments and business units. That’s why it is important that most of the personnel participates in development of strategy maps which begins from description of the company strategic vision. The organization should discuss how every employee may contribute to implementation of strategic goals. If that early stages company manages to find human resources and time to discuss strategy and get personnel involved it will be possible to save time in future. If Balanced Scorecard and strategy maps have a declarative character and are used in an inappropriate way, company personnel will consider it just another tool to control them.
It is extremely important that top management is able to explain the goals of the project and its ties with other control tools and previously implemented projects that initiated changes inside the company. For instance, if the company has already worked with performance metrics within the framework of total quality management company top managers may use this experience to show advantages of Balanced Scorecard.
Implementation of Balanced Scorecard in huge corporations requires well coordinated internal marketing. In order to achieve success, employees who assume responsibility for strategy maps development should form a common project team, learn from one another and develop and an agreed concept of using Balanced Scorecard. It is impossible to suggest the perfect size of such group. However, it is important to keep a reasonable size and prevent the groove from growing as this will limit its efficiency and freedom of decision-making. At the same time the working group shouldn’t be too small as some departments will fail to have their representatives there, which is definitely not a good thing. One of the most important tasks of such a team is information support and education. It is important that information on Balanced Scorecard concept is always available and understood for everybody. Education and information may be provided by guides, booklets, local network resources, seminars etc. Experience shows that groups consisting of less than 20 members better “absorb” information. In larger groups people are often reluctant to ask questions and doubt basic ideas of BSC. Critical thinking is very important!
Many companies choose to hire external advisors at the early stages of BSC implementation. Advisers may use their experience of BSC implementation in other companies, share received knowledge on business strategy and do the bulk of job. It is important to understand that BSC projects must reflect “local” conditions and “belong” to all employees in the company. External advisors should take into account individuality of every business but not just follow patterns and models.
It is possible to distinguish five categories of employees responsible for implementation of Balanced Scorecard. Smaller companies may combine these responsibilities in a variety of different ways.
- Business stakeholders in departments are using strategy maps. In fact, strategy maps should serve as a format that is used in discussion of plans or department financial results. Responsible employee is the head of department or a group of managers.
- Developers of strategy maps responsible for their structure, contents, terminology, graphic format and other fundamental elements of strategy maps. In terms of practice they are not very important, but still can have a great impact on perception and use of Balanced Scorecard in implementation of IT solutions. It is very important to define a unified organization terminology, especially if strategy maps are used in all departments and business units of the company. At the initial stage the company often appoints project leader with a broad authority. This is strategy maps boss or an analytical team.
- Information providers are responsible for accuracy of results and efficiency evaluation. Sooner or later the company will require IT solutions for performance evaluation and information support. So, part two responsibilities will be assumed by IT managers. Ordinary employees will require to collect and sometimes edit information to make it readable and usable. Proper motivation and complete involvement of personnel is a key success factor. It can be even considered as broadening of controlling process and inclusion of nonfinancial information in it.
- Analysts are responsible for adequacy of strategy maps as a major managerial control tool. Having a set of indicators is not enough. Interest in strategy maps will determine their efficiency. Success is not guaranteed just buy compliance with budget, and managers should remind personnel and themselves the strategy maps are their common position on the tasks and results of different departments. It is sometimes necessary to amend reward systems to get personnel motivated.
- Education pilots are tutors who are responsible for metrics use in order to educate personnel. In course of time strategic maps are reviewed amended and rejected if necessary. That’s why experience should be assigned to different areas of responsibilities.
Analysts and business stakeholders should discuss the process of running business, and they should decide whether or not strategy maps are doing their job well. Designers of strategy maps can also join this discussion. The following contacts can be identified during this discussion:
- Business stakeholders and tutors should discuss what can be learned about assumptions implanted in the strategy maps. Information providers may join this discussion since the company may need excess to other databases to perform comparative analysis.
- Developers of strategy maps and information providers should find effective ways to collect and share information. They should influence the process of measuring indicators, and that’s why this process may concern interested business participants.
It is important to realize importance of such contacts when sharing roles and responsibilities. Small organizations often assign these responsibilities to controlling specialist. Then this employee is engaged in system design, collection and sharing all information, discussion of indicators values, education etc. If such specialist is enthusiastic enough the system will work for some time. But there is a great risk that this project will become his personal issue that has nothing to do with something that is discussed by top managers and employees since one person cannot be everywhere, and thus he can not participate in all discussions of Balanced Scorecard.
Summary
It is obvious that the size and organization structure of the company will influence the process of sharing tasks and responsibilities. There are several factors that require a special attention:
- Competence. It rarely happens that specialized knowledge on Balanced Scorecard is needed. But at the same time it is important to have a general concept of the company and its internal processes, as well as be aware of previously used control and management systems, IT Systems etc.
- Availability. As already said above some companies believe that work with Balanced Scorecard require full time jobs, at least during several first years. It is important to understand whether or not candidates for this position can take this job.
- Stages in organization. It sometimes happens that person responsible for implementation of Balanced Scorecard is not necessarily and the company top management.
- Ardent supporter and preacher. Enthusiasm is very important, and both top management and ordinary employees should have a true faith in Balanced Scorecard.
