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Communicating Strategy with the Balanced Scorecard

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One of the most important roles for the balanced scorecard in helping organizations implement the strategy is its use as a communication tool. It's a way for all the employees to see and understand what are the critical objectives. But this is a big problem, it's very hard to communicate the strategy. The balanced scorecard with its system of objectives and measures gives a certain clarity to the strategy that did not exist before. But you still need a process to get that message out to the employees. One CEO is particularly effective with an innovative idea. He made it a point, anytime he visited a regional office, to walk the halls and stop randomly at one of the locations where an employee was working. The employee would look up and see the CEO over his or her shoulder and stop work of course and say 'hello', and the CEO would greet them and say 'Do you mind if I ask you a few questions?' [the employee] 'Oh no go right ahead!' at which point, the CEO reached into his jacket pocket, and opened up a piece of paper. The piece of paper was the strategy map for the company. And he placed the paper in front of the employee and says 'Do you know what this is?' Sometimes the employee would say 'No, I don't know what that is.'. Well that was not a good answer. But it was not the employee's problem it was the employee's supervisor's problem because it was the supervisor who was supposed to get the message out to the employees. Assuming the employee said 'Yes, well that's the company's strategy map and scorecard.' Then he said 'Oh that's terrific! Could you explain it to me?' Now the employee had to explain the strategy to the CEO of the company. Uh, a few failed in that. But some got through that and then CEO said 'OK one more question,' uh he said 'I know I interrupted you and could you explain what you were doing just before I started to talk to you [and] how that related to one or more of the objectives that's on this strategy map?' He said the first several times he did this in the various offices he was disappointed in the answers. He said I also noticed that after he left that office there was a flurry of emails. As all the employees wrote to their friends and colleagues in all the other offices and said 'if the CEO shows up you better be prepared to answer these three questions'. What is the strategy map? What is the strategy? Can you explain to me? And how have I done my job differently as a result of knowing the objectives on that strategy map? And it really emphasized the critical role of communication. It's a novel use of information. Normally we think of accounting information or performance information as something to monitor and evaluate. But it's true power is its ability to communicate strategic objectives to employees and align their day to day activities to the high level objectives. Another company did something also very innovative. They gave every employee a pen. 'Gee that's a very nice pen, thank you very much.' What's the connection? Well, in addition to being a nice pen if you opened it up, inside you could pull out the strategy of the company. So the strategy map was right there and close to their heart. They had something they could always carry around with them. So it's possible to have some fun and still be very effective in communicating strategic objectives and performance measures to all the employees in your company.

Video Details

Duration: 3 minutes and 23 seconds
Year: 2013
Country: United States
Language: English
License: Dotsub - Standard License
Genre: None
Views: 64
Posted by: christineward on Oct 22, 2015

Communicating Strategy with the Balanced Scorecard
Apr 22, 2013

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No changes have been made to the video except the addition of accurate close captioning.

Robert S. Kaplan is the Marvin Bower Professor of Leadership Development, Emeritus at the Harvard Business School.

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