Once you have a conceptual strategy you can begin to examine where your organisation is now.
Model of Maturity
Use the model below to identify where your organisation is now:
- Innocence – every manager has a measure.
Here, the balanced scorecard ideas have not been applied. Performance is measured primarily through the management reporting of financial information.
Functional managers have their own set of non-financial measures that they find most useful for managing their responsibilities. These are produced in functional silos and a limited number of them are reported more widely to the senior management team. No specific systems support is in place.
- Awareness – a rudimentary organisation scorecard exists
Here, the balanced scorecard concepts have been applied and a single organisation scorecard has been developed, with measures across the key dimensions of customers, internal processes, finances and employees (or learning and growth).
This is regarded as interesting information to review periodically, but the business is still run using the traditional management reports. Systems support is provided by spreadsheets or entry-level balanced scorecard software.
- Understanding – robust scorecards in place throughout the organisation
A scorecard has been developed, linked to the organisational strategy and shareholder value drivers, and benchmarked against external models and industry-standard models.
A hierarchy of interlinked scorecards is in place, cascaded to the appropriate level in the organisation, which may even extend to scorecards at the individual level. The scorecard has equal prominence to traditional management reports.
Standalone software is used, specifically designed for balanced scorecard reporting or developed as part of the functionality of existing consolidation and reporting packages.
- Competence – performance measures are the prime mechanism to drive business performance
The scorecard is developed as the key method used by the senior management team to drive business performance and strategy implementation. Executives spend time and effort selecting the most appropriate measures – for example, using a systems thinking approach or strategy mapping technique.
The company uses large database products with performance measurement tools fully integrated with strategic and operational planning functionality, typically from an ERP vendor.
- Excellence – a strategic and operational performance measures framework is in place
Strategic performance measures are integrally linked with business analytics used on a day-to-day basis.
A significant systems infrastructure is required to deliver this solution, with portal technology used to provide a set of measures tailored to the individual and delivered to the desktop daily and refreshed on demand.