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Does my organization need to have identical scorecards at the different departments? Can we add different measures at the local level that apply to a higher level objective? Much appreciated. |
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There are three broad approaches to alignment The Shared framework: When an organization consists of several operating units that operate with some autonomy, and leadership needs to track the individual performance of the units, they can use the Shared Framework approach and mandate that each must use the same enterprise measures to track and report on their performance. For this model, the same objectives and measures must apply uniformly across the units or sectors. A good example would be 14 district high schools all reporting on the same state mandated tests scores, students attendance measures, and teacher satisfaction survey numbers. The Contributory framework: The Contributory Framework is best for situations where each department executes only a portion of the overall organizational strategy — not necessarily common activities— requiring them to report unique measures to leadership. For this type of scenario, where unique departments like Human Resources almost entirely control hiring time, finance almost completely controls days from invoice to payment, and Facilities almost exclusively controls the number of times a bathroom is cleaned daily, should all have separate pieces of the larger organizational objectives and measures. The Hybrid framework:
In the Hybrid Framework, leadership mandates the use of some enterprise measures (maybe 50% of the top level scorecard) but then allows each unit/department to adopt additional measures that apply to their unique service or location. This is a blend or “hybrid” of the Shared Framework and Contributory Framework approaches; with some shared responsibility but also flexibility to measure and act on those unique aspects at each location. Which framework your organization adopts depends on your structure and culture of your organization and which framework best fits your requirements. Organizations that are highly “top-down” in structure will do best with the Shared Framework, keeping everyone on the same page in their strategic performance measures. Organizations that have a culture of greater autonomy can choose a Contributory Model to enable their units/departments to chart their own path and measure the results that matter most to them. Other organizations that have a mix of “top-down” hierarchy and “bottom-up” autonomy can use the Hybrid Framework for a combination of consistency and flexibility. |
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Hello Jeremy John's answer is useful in describing the different ways you can go about aligning Balanced Scorecards. If you want to read more about how you do this work in practice, and the issues and methods that you need to be mindful of, there are a variety of useful resources available from the 2GC web site's Performance Management Resources Centre at http://www.2gc.co.uk/resources 2GC Active Management is a specialist consultancy that has established a particular expertise and reputation for planning and implementing complex Balanced Scorecard cascades. The materials in the Performance Management Resource Centre draw upon this experience, and also our continuing work to develop and publish original research materials within the relevant Academic communities. Here are a few of the resources available that you might find particularly useful:
2GC's Performance Management resources are all available as PDF documents and can be downloaded anonymously for free. Most are released under a Creative Commons license that permits use and copying for non-commercial use subject to certain constraints. Hope you find these resources useful. Of course if you have any questions, please don't hesitate to get in touch. Best regards Gavin Lawrie 2GC Active Management |
