Checklist For Implementing a Balanced ScoreCard « ServiceXen Thoughts about Software Strategy, Marketing and Management

Checklist For Implementing a Balanced ScoreCard

August 25, 2008 — servicexen

Communicate the reasons for scorecard implementation, and the benefits to employees and the organization.
Sell and communicate the scorecard concepts and how each scorecard ties to organizational strategy.
Scorecard systems often help to foster a culture shift or change; therefore, change management and effective communication skills are required.

Use a framework that represents the organization’s vision and business model.
The impetus for implementation should come from top-level management.
Focus on key business issues and ‘‘burning platforms’’ the system must address.
Continue to communicate the reasons for scorecard implementation, and the benefits to the employees and the organization.
Use one or more targets where appropriate.
Link performance measures to compensation and rewards—where appropriate.
Align measures and employees to organizational goals.
Advertise successes when they occur.
Choose measures carefully and involve those accountable for them in the selection process.
Communicate how targets are set and from where data is retrieved.
Provide software features that will enable employees to spend their time analyzing and acting on results.

Impetus for implementation should come from top-level management.
Buy-in should occur at the top-level management.
Define and communicate the reasons for and benefits of implementing a scorecard system.
Articulate and communicate the organizational strategy.
Have a strategy champion to maintain the visibility required to be successful.
Encourage employees to accept and use the system.
Use consultants appropriately.
Advertise successes when they occur.
Provide adequate time to implement and realize benefits.
Create a system that is pervasive, but implement in phases.
Create a system that is integrated into the organization’s overall planning and performance evaluation system.

Reflect the business model of the organization accurately to be accepted by the employees and be useful for analysis.
Be adaptable enough to work for both short- and long-term strategic objectives.
Work with reporting on other management initiatives.
Create formal ties between the organizational strategy and the scorecard system.

Choose measures carefully and involve those accountable for them in the selection process.
Align measures and employees to organizational goals.
Align employee performance evaluation measures with scorecard measures.
Balance the scorecard measures (financial versus nonfinancial, leading versus lagging).
Err on the side of tracking fewer measures (you can always add more as needed).
Choose financial measures wisely, they are still very important.
Use one or more targets where appropriate.

Link performance measures to compensation and rewards—where appropriate.
Link the compensation and reward systems (eventually) to the scorecard system, if it is appropriate to your organizational culture.
Ensure that there is congruence between the scorecards and the performance evaluation system.
Provide software features that will enable employees to spend their time analyzing and acting on results.
Align human capital to the strategy.
Use a feedback loop to understand progress and make changes where required.
Implement the system pervasively, but in phases.
Ensure your cost management system adequately supports the scorecard system.
Maintain flexible reporting on key performance indicators and how they roll up through the organization.

Set a realistic time frame for implementation.
Choose the most appropriate approach for your needs: top-down, bottom-up, or pilot project.
Roll out to the organizational level that is appropriate to your ‘‘burning platform.’’
Implement the scorecard system in a limited way initially, and then roll it out as your organization gains scorecard experience.
Consider future roll-out plans.
Have a process to controllably accommodate the updating of scorecards, performance measures, objectives, and accountability.
Use outside consultants to facilitate the implementation process, but they cannot and should not be used to replace the necessary involvement of your own personnel.
Consider the relationship between the scorecard system and other performance/ cost management tools and how/if they can be supportive.
Convene a scorecard system committee comprising the scorecard champion, business users, IT leaders, and power users.
Create processes to update the scorecard system as the organization evolves.

Consider software flexibility in the event that source systems or reporting requirements change.
Gather and support organization requirements in automation features (e.g., Web-based reporting, drill-down to root data, customize reports).
Link scorecards where appropriate, and roll them up.
Access data from legacy systems and other data sources.