Does your business “fly by the seat of its pants,” as opposed to the use of an effective strategic plan?
If yes, please read on.
Do you envision a strategic plan to be composed of 30-plus pages, as opposed to a single sheet of paper?
If so, please read on.
Would it be helpful to you to have a plan that not only tracks your progress but also shows your trending from previous years?
If so, please read on.
Each of these helpful plan elements are available to you in the proven leadership and management tool of two Harvard Business School professors. It’s used throughout the world in organizations of all sizes, types and missions.
It’s called the balanced scorecard. Its usage is broad-based only because it works!
According to the Balanced Scorecard Institute, the BSC is used for these purposes:
• Communicate what they are trying to accomplish.
• Align the day-to-day work that everyone is doing with strategy.
• Prioritize projects, products and services.
• Measure and monitor progress toward strategic targets.
That’s the global view. Locally, the BSC has been used in both for-profit and not-for-profit organizations with great success. This has been especially true where financial goals and objectives are concerned.
There is a reason for use of the word “balanced” in the BSC’s name.
That is because each of the three segments of annual operational objectives are critical to be in balance, without any single segment overpowering the others. The three segments are:
• Customer focus.
• Continuous improvement of systems and processes.
• Professional development.
If these are kept in balance with one another, the “magic” of the BSC will favorably affect the fourth segment — financial objectives. The Harvard creators of the BSC report that maintaining this balance, along with achieving each annual operational objective, will guarantee accomplishment of the financial objectives. (I always say “almost guarantee” yet I’ve seen it happen!)
You must be asking, “Is that single sheet of paper all that’s needed?”
The answer is yes. But a couple of additional management tools can be also very helpful.
An action plan for each operational objective can be helpful in drilling down in your planning process.
A “dashboard” of your outcomes over the past five years of so will give you a better handle on trending of those metrics of greatest importance to you.
More specifically, this “one-pager” gives you the all-important view of your targets and results “viewed from 30,000 feet” — the proper perspective for any organization’s leadership.
It also will clearly show what it is you want to accomplish.
This is true for both long-term strategic goals as well as annual operational objectives.
However, the “one-pager” does not tell you how each objective is to be accomplished.
This is the role of the action plan. Usually one action plan is needed for each annual operational objective.
It tells you who will do what by when and, if a budget is needed, for how much — all very important for “ground level” management.
This tool is best drafted by the individual or team charged with accomplishment of an objective. It should be formally approved before the action plan is implemented, especially if funding is needed.
While the action plan looks forward, the dashboard looks back over time.
Like the dashboard on your car (especially with GPS), it tracks the direction you’re heading and at what speed you’re moving, plus where any “maintenance” or “repairs” may be needed.
It also shows how much “gas is in the tank” ($$$) in terms of working capital on hand as well as profits earned.
These are all data needed by any organization for visionary leadership.
The internet is full of examples of the BSC. However, if you’d like a complimentary copy of these tools (in template form), either email me at firstname.lastname@example.org or register as a client for free with CSUB’s Small Business Development Center at www.csub.edu/sbdc.
The BSC’s format can vary greatly from one firm to another, but it’s the content that matters, which is your all-important role in this planning system. Try it!