implementing unbalanced scorecard

Tathagat Varma, Sr. Director,

Yahoo! Strategy Execution 2013

Conference (c)

Implementating UnBalanced Scorecard

– A Case Study

•  Balanced Scorecard •  Strategy Map •  Our Journey •  Challenges •  Results •  Learnings

Strategy Execution 2013 Conference (c)

Discussion Topics


Balanced Scorecard

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•  Started in mid-2010 through 2012 •  Pragmatic and empirical approach •  Excellence program to reflect KRAs •  KPIs aligned with priorities and goals •  Goals for product and support groups •  QBRs to track and review


Our Journey

• status on implementaHon of planned iniHaHves

• effecHveness of results accomplished on a quarterly basis

• strategic iniHaHves across various product and support groups in a highly matrixed organizaHon

• execuHon to the R&D center charter and overall organizaHonal strategy

Align Coordin-‐ate

Track Review

•  Balanced vs. Unbalanced: “The most valuable use of a scorecard is as a driver of a strategically focused improvement process and as such need not and usually should not be “balanced””

•  Vital Few vs. Trivial Many: “Only a pattern of out-of control situations that can't be resolved by existing recovery processes should be a candidates for scorecard inclusion”

•  Financial vs. Non-financial: “OK, I'll admit it right up front: I still don't understand why we need financial measures on a scorecard at all”

•  Internal vs. External: “scorecard metrics, taken in their entirety, should be unbalanced in favor of internal or process metrics”

•  Leading vs. Lagging: “You can not manage lagging indicators ... they are inherently after-the-fact measures”

•  Short-term vs. Long-term: “Long-term objectives run the high risk of inadvertently incenting short-term inaction”

•  “In my opinion, most scorecards should be unbalanced toward internal, leading, short-term metrics.”


Our approach

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•  Delivering world-class performance by applying systems thinking approach to achieve •  a winning culture that promotes continuous

learning, personal growth and inter-group collaboration, and makes us “Proud to be a Yahoo!”

•  an execution system that supports operating as one product team to achieve agility, faster innovation, meaningful risk-taking and consistent delivery of world-class products with “wow” user experience

•  an operational model that makes best usage of company resources to provide a wow experience to employees and leaders


Excellence Program

Cornerstones of Excellence program were broken down into “strategic horizontal programs”

Culture

Retain

Develop

Hire

Brand Leadership

Innova6on

IP Program

InnovaHon Program

Technology Thought

Leadership

Execu6on

Agility

Dev Excellence

Service Engineering & OperaHons

Opera6ons

FaciliHes Survey

Feedback

Fiscal Discipline

SLA Performance

1.  Unbalancing the Scorecard 2.  Vertical vs. Horizontal Goals 3.  Organizational changes 4.  Execution, Execution, Execution 5.  Effectiveness review

Challenges

Unbalancing the Scorecard

Beware: The Unbalanced Scorecard – David P Norton

Effectiveness Reviews

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•  There is no one-size-fits-all •  ‘Balanced’ has limited appeal •  Leadership’s role is critical •  Strategic PMO to coordinate •  Execution is the key •  Trends are more useful •  Constant realignment is needed •  Double-loop learning is beneficial


Learnings

•  “If a good scorecard consists of 23–25 measures, all but five of them should focus on customers, internal processes, and learning and growth.” – David P. Norton, 2000

•  “Our work in innovation makes clear that unless companies differentiate beyond the norms of the competitive set in which they participate, they cannot get paid a differential return.” – Geoffrey Moore, 2005

Some parting thoughts

•  http://www.schneiderman.com/Concepts/The_First_Balanced_Scorecard/How_the_Scorecard_Became_Balanced.htm

•  http://www.slideshare.net/Managewell/strategic-alignment-of-horizontal-and-vertical-pmo-goals-final

•  http://www.schneiderman.com/AMS_publications/Unbalanced%20Scorecard/unbalanced_scorecard.htm

•  http://www.schneiderman.com/Concepts/The_First_Balanced_Scorecard/BSC_INTRO_AND_CONTENTS.htm

•  http://geoffmoore.blogs.com/my_weblog/2005/11/unbalanced_scor.html


References

Tathagat Varma http://managewell.net


implementing unbalanced scorecard

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