Permanent reminder of a temporary feeling,
Amnesic episodes that never go away.
It's no complex memento, it's no subtle revealing.
Just a permanent reminder of a temporary feeling -- Jimmy Buffett
Businesses must generate more value than the cost of resources consumed in pursuing their mission over time. To do this, they also must identify and track the operational fitness of their existing capabilities so that strategies can be crafted that will maximize this fitness across different customer segments, time horizons, and operating scenarios. It can be difficult to track needed transformations, assure that approriate tradeoffs are evaluated free of bias and self interest, and pursue the opportunities most likely to capture value. Experiments provide a adequate attention crucial to employ facts and data so that these strategies can be adjusted, and so new information is properly incorporated into business plans.
Strategic management involves shaping the fitness of assets to evolving needs and available resources, and consciously dcciding priorities, such what to do more of, and where to pivot from prior decisions. When fitness is poor, performance is likely to suffer. Strategic planning starts with a conscious commitment to identify and understand the critical ingredients for the business's success, establish the relationships between these concepts, and establishing metrics for tracking these measures. balanced scorecards provide a visual dashboard to highlight the most critical measures of effectiveness for the organization, and focus attention on their pursuit. The elements of a business's portfolio should be traceable to strategic objectives, and demonstrate how they contribute to these outcomes. Balanced scorecards are one means of demonstrating these connections to a criitical set of measures of effectiveness and weaving together a set of actions that are capable of achieving target performance over time. A representative depiction of such elements is provided in figure 1.
Sponsors often take necessary but insufficient steps as they organize efforts to implement these strategies in a meaningful way. Intentions to be translated into meaningful actions Closing the loop is the only logical way for . The business needs selection criteria that can be tied to exercisable value, in units and with logic that everyone can recognize.
The antithesis of these selections are platitudes whose functions are not measurable by the business; their connections to strategies are opaque. Balanced scorecards differ from these abstractions by weaving together a collection of collaborative behaviors, and managing each dimension as separate projects of a broader initiative. Customer management, financial management, knowledge management, work management
The dashboard's intention is to integrate these themes to highlight their interdependencies. The benefits must be apparent upon introduction, or will be seen as just one more fad that will pass like many that have come before. The components are a strategy map that tells the story in one page, and capture the goals, initiatives, work packages, and measures of effectiveness.
This balance can be achieved by organizing critical information into different groupings, and elaborating the objectives for each group down specifically allocated paths, so that target outcomes can be verified across organizations and timeframes. The risks of taking such an approach have been studied since the book was first published in xxxx.:
- Determining whether something is a strategic decision or not. Without options, the only decision to make is the depth of arbitrary cuts to make across the board.
- Failure to properly champion and elaborate the actions required
- Inclusion of easily attainable targets at the expense of meaningful change
- Spending too much time on visuals rather than reflection of their underlying message
A zero based budget exercise can be used to analyze the distribution into one of the following organizing work into with initial focus on