Building & Implementing a Balanced Scorecard:Nine Steps to Success®

Step 1: Assessment

� Development Plan, Strategic Elements &Change Management

Step 2: Strategy

� Customer Value, Strategic Themes & ResultsStep 3: Objectives

� Strategy Ac tion ComponentsStep 4: Strategy Map

� Cause-Effec t LinksStep 5: Performance Measures

� Performance Measures & TargetsStep 6: Initiatives

� Strategic ProjectsStep 7: Automation

� Software, Performance Reporting &Knowledge Sharing

Step 8: Cascade

� Alignment through Unit &Individual Scorecards

Step 9: Evaluation

� Strategy Results & Revised Strategies

The Institute s award-winning framework,, is a disciplined, practical approach to developing a

strategic planning and management system. Training is anintegral part of the framework, as is coaching, changemanagement, and problem solving. Emphasis is placed onteaching clients to fish, not handing them a fish , so thescorecard system can be sustained.

A key benefit of using a disciplined framework is that it givesorganizations a way to connect the dots between thevarious components of strategic planning and management,meaning that there will be a visible connection between theprojects and programs that people are working on, themeasurements being used to track success, the strategicobjectives the organization is trying to accomplish and themission, vision and strategy of the organization.

Nine Steps to

Success®

©1997-2009 Balanced Scorecard Institute, a Strategy Management Group company. All rights reserved.

Balanced Scorecard ComponentsThe balanced scorecard is a strategic planning andmanagement system that helps everyone in anorganization understand and work towards a sharedvision. The components of the management system areshown in the figure below. Starting at high “strategicaltitude”, Mission, Vision, and other planning elementsare translated into desired Strategic Results. Theorganization’s “Pillars of Excellence”, or StrategicThemes, are selected to focus effort on the strategies thatmatter the most to success. Strategic Objectives are usedto decompose strategy into actionable components thatcan be monitored using Performance Measures. Measuresallow the organization to track results against targets, andto celebrate success and identify potential problems earlyenough to fix them. Finally, Strategic Initiatives translatestrategy into a set of high-priority projects that need to beimplemented to ensure the success of strategy. Once thestrategic thinking and necessary actions are determined,annual program plans and projects can be developed andtranslated into budget requests.

Figure 1: Logic of Balanced Scorecard Strategic Planning

The Nine Steps to Success®

Step One

Step Two

Step Three

Step Four

Step Five

of the scorecard building process starts with anassessment of the organization’s Mission and Vision,challenges (pains), enablers, and values. Step One alsoincludes preparing a change management plan for theorganization, and conducting a focused communicationsworkshop to identify key messages, media outlets, timing,and messengers.

In , elements of the organization’s strategy,including Strategic Results, Strategic Themes, andPerspectives, are developed by workshop participants tofocus attention on customer needs and the organization’svalue proposition.

In , the strategic elements developed in StepsOne and Two are decomposed into Strategic Objectives,which are the basic building blocks of strategy and definethe organization's strategic intent. Objectives are firstinitiated and categorized on the Strategic Theme level,categorized by Perspective, linked in cause-effect linkages(Strategy Maps) for each Strategic Theme, and then latermerged together to produce one set of Strategic Objectivesfor the entire organization.

In , the cause and effect linkages between theenterprise-wide Strategic Objectives are formalized in anenterprise-wide Strategy Map. The previously constructedtheme Strategy Maps are merged into an overall enterprise-wide Strategy Map that shows how the organization createsvalue for its customers and stakeholders.

In , Performance Measures are developed foreach of the enterprise-wide Strategic Objectives. Leadingand lagging measures are identified, expected targets andthresholds are established, and baseline and benchmarkingdata is developed.

In , Strategic Initiatives are developed that supportthe Strategic Objectives. To build accountabilitythroughout the organization, ownership of PerformanceMeasures and Strategic Initiatives is assigned to theappropriate staff and documented in data definition tables.

In , the implementation process begins byapplying performance measurement software to get theright performance information to the right people at theright time. Automation adds structure and discipline to thesystem and helps people make better business decisions.

In t, the enterprise-level scorecard is ‘cascaded’down into business and support unit scorecards, meaningthe organizational level scorecard (the first Tier) istranslated into business unit or support unit scorecards (thesecond Tier) and then later to team and individualscorecards (the third Tier). Cascading translates high-levelstrategy into lower-level objectives, measures, andoperational details and is the key to organization alignmentaround strategy..

In , an Evaluation of the completed scorecard isdone. During this evaluation, the organization tries toanswer questions such as, ‘Are our strategies working?’, ‘Arewe measuring the right things?’, ‘Has our environmentchanged?’ and ‘Are we budgeting our money strategically?’

If you would like to learn more about how the BalancedScorecard Institute can help your organization becomemore strategy-focused, contact the Institute via phone at(919) 460-8180 or visit .

Step Six

Step Seven

Step Eigh

Step Nine

www.balancedscorecard.org

©1997-2009 Balanced Scorecard Institute, a Strategy Management Group company. All rights reserved.