destination statement design

A Destination Statement is one of the elements found in a modern Balanced Scorecard. In a paper 2GC wrote in 2002, the destination statement was noted as being one of the outputs of the design process for Balanced Scorecards developed using "3rd Generation" design methods, and the use of the phrase destination statement dates from then.

As originally described, the destination statement is a textual description of the affect successful implementation of an organisation's strategy will have had upon the organisation by some nominated future date. Typically creating it is the first step in a 3rd Generation Balanced Scorecard design sequence.

The original purpose of the destination statement was to address the fundamental / generic problems 1st and 2nd generation Balanced Scorecard design processes regarding target setting: but once they were established, it was found the destination statement also provides useful advantages in the steps associated with objective selection and cascading of Balanced Scorecards.

A contribution statement is very similar to a destination statement - it is a textual description of how a component of an organisation (e.g. an SBU, function, department etc.) would need to be at some nominated future date if it is to reflect and support the changes / developments planned for the organisation as a whole and as described in the organisation's destination statement. The document describes how the unit will contribute to the achievement of the future described in the destination statement. The various contribution statements that could be created for units within an organisation allow for discussion of alignment over 'end points' to happen before the detail of a Balanced Scorecard is developed - ensuring that all the units involved in the cascade are pursuing consistent and compatible outcomes. Once the contribution statement has been agreed as valid and complete, the unit's management team can then use the device to support development of the remainder of their own Balanced Scorecard.

Case studies and papers describing this use of contribution statements in cascading of strategic Balanced Scorecards can be found in the performance management resources area of the 2GC web site.

HTH.

PS - we'd be very grateful for anyone who uses Balanced Scorecard in their organisation to complete the 2011 Balanced Scorecard Usage Survey questionnaire which can also be found on the 2GC web site. The questionnaire takes no more than 10 minutes to complete online (or can be downloaded and mailed back). Read the results of earlier surveys on the 2GC site also.

Sometimes you also see a purpose statement. This is described in the Norton/Kaplan "Execution Premium" book as the OAS statement.

• Objective (O): The ends that the strategy is designed to achieve
• Advantage (A): The means by which the enterprise will achieve its objective
• Scope (S): The domain - or, as we referred to it earlier, the niche - in which the enterprise intends to operate.

This is copies out of the book on page 59, but it does provide a very helpful framework for testing the alignment of the leadership team to what the organization's purpose is and what future success looks like.

It also works well in helping nonprofit and mission driven organizations. We use it at Ascendant to help a lot of clients.

Ted

Yes, there are a couple of variations on the Destination Statement idea that have appeared in more recent K&N texts - of which this is one. It is good to see wider use of more modern methods - for reasons probably due to the need to protect their investment in earlier methods, K&N have been relatively slow at introducing new methods into their published works. 2nd Generation methods had been widely in use for about 5 years before they first appeared in a K&N book, for example.

Other proprietary methods of Balanced Scorecard design use other variants of the DS idea, but as you point out the purpose of these variants is broadly the same. Because of this, we would strongly recommend anyone reading this who is thinking about designing their own Balanced Scorecard (or similar device) with a view to managing the implementation of a strategy to consider using a Destination Statement or similar device as part of the design process.

As ever, more about Balanced Scorecard design methods and the various generations of Balanced Scorecard from the performance management resources area of the 2GC web site.