You’re Not the Boss of Me – Change when you are not in charge!

Gwyn Teatro has a super blog at the link below with resources for the times when someone else is leading the change and you want to do the best for your people and you.   I suspect we have all been in this position and know just how frustrating it can be.  Follow the link and read wise words from Gwyn!

http://gwynteatro.wordpress.com/2009/04/20/making-change-happen-when-youre-not-the-boss/

BEING A GREAT BOSS IN A RECESSION – OVERCOMING PERFECTIONISM

In an earlier post on being a great boss in a recession we spoke about having ideals but not being idealistic – not being a perfectionist but expecting good quality!  Here is a useful article from About.Com which should help!

Overcoming Perfectionism: How To Develop a Healthier Outlook

Learn to Be Perfectly Imperfect!

By Elizabeth Scott, M.S., About.com

About.com Health’s Disease and Condition content is reviewed by the Medical Review Board

Are You A Perfectionist? Perfectionism can rob you of your peace of mind, enjoyment of life, and self esteem. Though it’s a process that may take a little time, shedding the burden of perfectionism can greatly decrease the level of stress you feel on a daily basis. Here are some important steps you can take to maintain a healthier attitude:
Make a Cost-Benefit Analysis:

Take a closer look at your perfectionistic traits. You may think you’re more effective because of them (although according to research, this probably isn’t true), but at what cost? Perfectionism has many negative consequences, and you may be experiencing several of them right now. Make a list of all the ways perfectionism is hurting you (and those around you), and you’ll be more motivated to shed these tendencies.

Become Aware of Your Tendencies:

You may not realize how pervasive perfectionism can be. By becoming more aware of your patterns, you’re in a better position to alter them. If you’re able, it’s a great idea to record your perfectionistic thoughts as they pop into your head. If it’s impractical for you to jot thoughts down as they come, it’s a great idea to go over your day each night and remember the times when you felt you’d failed, or hadn’t done well enough, and write down what you thought at the time. This will help you become more aware of perfectionistic thoughts as they come to you in the future. (You can even journal about your feelings about these thoughts, but don’t feel you’ve ‘failed’ if you don’t have time to do this!)

See the Positive:

If you’re struggling with perfectionism, you probably have honed the skill of spotting mistakes in even the best works of others and of yourself. You may just naturally look for it, and notice it above all other things. While this habit may be difficult to just stop, you can soften your tendency to notice the bad by making a conscious effort to notice all that is good with your work and the achievements of others. If you notice something you don’t like about yourself or your work, for example, look for five other qualities that you do like. This will balance out your critical focus and become a positive new habit.

Alter Your Self-Talk:

Those who wrestle with perfectionism tend to have a critical voice in their head telling them their work isn’t good enough, they’re not trying hard enough, and they’re not good enough. If you’re going to overcome perfectionism, you need to work on changing this little voice! Negative self talk can perpetuate unhealthy behaviors and wreak havoc on your self esteem; by altering your self talk, you can go a long way toward enjoying life more and gaining an increased appreciation for yourself and your work. These tips can help.

MORE ON THE CHANGE CYCLE FROM CHANGING MINDS

The positive change cycle

Disciplines > Change Management > The psychology of change

The positive change cycle

Uninformed optimism | Informed pessimism | Informed optimism | Completion | See also

Just as there is a negative cycle of emotions experienced when the change is not to the liking of the person in question, so also is there a positive cycle. Not all people experience change as a bad thing: some will benefit from the change, whilst others just find change in itself intriguing and exciting.

Uninformed optimism

In the first stage of positive change, the person is excited and intrigued by the change. They look forward to it with eager anticipation, building a very positive and often over-optimistic view, for example that it will be much easier for them and resolve all of their current issues.

And for a time after the change (sometimes sadly short), there is a ‘honeymoon period’, during which they are positively happy with the change.

Informed pessimism

The honeymoon period does not last forever and the rose-tinted glasses start to fade as the untidiness of reality starts to bite. The person finds that things have not all fallen into place, that other people have not magically become as cooperative as they expected, and that things are just not as easy as they had expected.

This pushes them over into a period of gloom when they realize that perfection, after all, is not that easy to attain. This may evidence itself in mutterings and grumblings, but still does not reach the depths of the depression stage of negative change perception (unless the person flips into a delayed negative cycle).

Informed optimism

Before long, however, their original optimism starts to reassert itself, now tinted by a resignation to the reality of the situation. After all, things are not that bad, and a positive sense of potential begins to creep back.

As they look around them and talk to other people, they make realistic plans and move forward with an informed sense of optimism.

Completion

Eventually, things reach a relatively steady platform of realistic and workable action. The person is probably happier than they were before the change started and, with their realistic vision, have the potential to reach giddier heights of happiness as they achieve more of their potential.

Link to Changing Minds http://changingminds.org/disciplines/change_management/psychology_change/positive_change.htm

Change And The Grief Cycle (Kubler-Ross)

Change And The Grief Cycle (Kubler-Ross)

Here is an article from Changing Minds – link below

Background

For many years, people with terminal illnesses were an embarrassment for doctors. Someone who could not be cured was evidence of the doctors’ fallibility. And as a result the doctors regularly shunned the dying with the excuse that there was nothing more that could be done. There was, after all,  plenty of other demand on the doctors’ time.

Elizabeth Kübler-Ross

Elizabeth Kübler-Ross was a doctor in Switzerland who railed against this unkindness. She spent a lot of time with dying people, both comforting and studying them. She wrote a book, called ‘On Death and Dying.’ This included a cycle of emotional states that is often referred to (but not exclusively called) the Grief Cycle.

In the ensuing years, it was noticed that this emotional cycle was not exclusive just to the terminally ill.  But it was also found in other people who were affected by bad news. They may have lost their job or otherwise been negatively affected by change. The important factor was not that the change was good or bad. It was that they perceived it as a significantly negative event.

The Grief Cycle

The Grief Cycle is shown the chart below, It indicates a the roller-coaster ride of activity and passivity as someone wriggles and turns in their desperate efforts to avoid the change.

grief cycle

The initial state before the cycle is received is stable, at least in terms of the subsequent reaction on hearing the bad news. Life before, compared with the ups and downs to come, feels stable.

And then, into the calm of this relative paradise, a bombshell bursts…

Sticking and cycling

Getting stuck

A common problem with the above cycle is that people get stuck in one phase. Thus a person may become stuck in denial, never moving on from the position of not accepting the inevitable future. When it happens, they still keep on denying it.  Such as the person who has lost their job still going into the city only to sit on a park bench all day.

Getting stuck in denial is common in ‘cool’ cultures (such as in Britain, particularly Southern England) where expressing anger is not acceptable. The person may feel that anger, but may then repress it, bottling it up inside.

Likewise, a person may be stuck in permanent anger (which is itself a form of flight from reality) or repeated bargaining. It is more difficult to get stuck in active states than in passivity, and getting stuck in depression is perhaps a more common ailment.

Going in cycles

Another trap is that when a person moves on to the next phase, they have not completed an earlier phase and so move backwards in cyclic loops that repeat previous emotion and actions. Thus, for example, a person that finds bargaining not to be working, may go back into anger or denial.

Cycling is itself a form of avoidance of the inevitable, and going backwards in time may seem to be a way of extending the time before the perceived bad thing happens.

See also

The positive change cycle, Coping Mechanisms, The need for control, Psychoanalysis and mourning

Elisabeth Kübler-Ross, On Death and Dying, Macmillan, NY, 1969

Changing Minds Website – link below

http://changingminds.org/index.htm

Wendy Smith is a career consultant, life coach and business coach with depth of experience in management, coaching and personal development. That experience means she is equally at home helping clients find a new career direction, starting-up new businesses or dealing with life’s more challenging personal issues. You can contact her at wendy@wisewolfcoaching.com

Wendy has written a little eBook on how to get on with your boss and a book on job search – you can find her books on Amazon at this link

         

THREE WELL ESTABLISHED WAYS TO MANAGE CHANGE

There are a number of recognized approaches to structuring a change management programme.  Here are three!  Choose the one that fits best with your style and your organization!

The Kotter model

The model is based on research which showed that there are eight critical steps an organization or service needs to go through to ensure that change happens and sticks.

These steps are:

  1. Establish a sense of urgency
    – examine market and competitive realities
    – identify and discuss crises, potential crises or major opportunities.
  2. Form a powerful, guiding coalition
    – assemble a group with enough power to lead the change effort
    – encourage the group to work together as a team.
  3. Create a vision
    – create a vision to help direct the change effort
    – develop strategies for achieving that vision.
  4. Communicate the vision
    – use every vehicle possible to communicate the new vision and strategies
    – teach new behaviours by the example of the guiding coalition.
  5. Empower others to act on the vision
    – get rid of obstacles to change
    – change systems or structures that seriously undermine the vision
    – encourage risk taking and non-traditional ideas, activities and actions.
  6. Plan and create short term wins
    – plan for visible performance improvements
    – create those improvements
    – recognise and reward employees involved in the improvements.
  7. Consolidate improvements and produce still more change
    – use increased credibility to change systems, structures and policies that don’t fit the vision
    – hire, promote and develop employees who can implement the vision
    – reinvigorate the process with new projects themes and change agents.
  8. Institutionalise new approaches
    – articulate the connections between the new behaviours and corporate success
    – develop the means to ensure leadership development and succession.

These steps are summarised in the diagram below:

Reading and resources

J Kotter. 1996. Leading Change. Boston: Harvard Business School Press.
J Kotter. 1995. ‘Leading change – why transformation efforts fail’ in Harvard Business Review.
J Kotter and D Cohen. 2002. The Heart of Change. Boston: Harvard Business School Press.

The model for improvement

The model builds on and brings together for practitioners, change management theory and practice, especially that published in 1992 by Langley, Nolan et al. It provides a framework for developing, testing and implementing changes to the way that things are done that will lead to improvement.

It is in two parts of equal importance.

  1. The ‘thinking part’, consists of three fundamental questions that are essential for guiding improvement work. The aim is to gather ideas and evidence to support the changes.
  2. The ‘doing part’, is made up of Plan, Do, Study, Act (PDSA) cycles that will help you make rapid change.

This is summarised in the diagram below:

It is recommended that you try change on a small scale to begin with and to rely on using many consecutive cycles to build up information about how effective your change is.

This makes it easier to get started, gives results rapidly and reduces the risk of something going wrong and having a major impact. When you have built up enough information to feel confident about your change, you can then implement it as part of your system.

Reading and resources
G Langley, K Nolan et al. 1996. The Improvement Guide: A Practical Approach to Enhancing Organisational Performance. San-Francisco: Jossey Bass.

A Practical Method that Builds on a Number of Other Change Theories

This model proposes that for a change to be successful there must be

  • A clear vision for the future
  • A coherent plan for getting there

It sets out a five stage remodelling process, shown in the diagram below:

PRIORITIES FOR THE GREAT BOSS IN A RECESSION

In an earlier post on being a great boss in a recession, we wrote about aligning your priorities with the needs of your business. We emphasized how important it was to “explain your priorities clearly to your team – make sure they understand.  If things have changed make sure they understand why!”

What should the priorities be for you in a recession? Here are some ideas!

Observation

Now is the time to work on your business, not in it! You need to understand your resources (including your suppliers), your costs and your market; and how they are moving over time. Make sure you know what resources you have you got in terms of infrastructure and staffing. Who are your suppliers and what is in their contracts? Take some time out to do some mapping  and make sure you understand the real detail of your costs. On the market front, now is the time to look at those trade journals that have been piling up in the corner and to get on the net and look at your trade association’s web site! And don’t forget to check your bills and look out for those expenses from which you gain no real benefit!

Repair

Stand back when you observe and rate your organization realistically! If you mark it out of 10 on operations, infrastructure and marketing – what mark would you give? Determine what essential improvements you need to make!  Plan those improvements and then monitor their implementation!  Do it and do it now – you may not get another chance!

Planning

Get out your business plan and revise it realistically. Re-do your SWOT analysis! Set clear targets for income and expenditure. From now on you are going to monitor it not put it back in the drawer! Some of the changes you make will be dependent on some of the later items here.

Rationalisation

If you understand your contracts, you will know how you are likely to be able to open them up and apply pressure to get better agreements. Your suppliers would probably rather reduce the price than see you go out of business but be reasonable – they are going through the same hard time. Defer non-critical investment that doesn’t have a short-term pay-off. Consolidate your infrastructure and operations where you can. Pay only for what you need and don’t over purchase equipment or services. Make sure your team understands why this is important – their jobs may depend upon it!

Keeping your customers warm

Work on the relationship and get them talking to you – there may even be new opportunities. You need to understand who is going to survive and do well in the new climate and who is not. Be very realistic about pricing – are you in a position to help them out and will that be critical to their survival?

Thinking the unthinkable

You hope that your organization will survive intact and even do well in the changed circumstances. You are a good boss and you don’t want to let people go. But you may have to. You need to understand who is essential to your business and who isn’t. Remember this is not just about their job role but also about intellectual capital! Who do you rely on for essential information in a crisis? Who has the closest relationship with your customers? Consider the alternatives to redundancy – part-time working, career breaks etc! Know what the law and good practice requires you to do if you do need to let people go and know where to go for help . Make your own plan and then keep it to yourself! I would keep it off site at home – when and if you need to tell your team about this – you want to be in charge of the message.

Communication

Involve your staff in the processes above where you can. Help them to support you and themselves and be as honest with them as you can. They want the organisation to survive. Handle their feelings with sensitivity and keep them on your side. They really are your greatest asset.

I hope all of this works for you and that you not only survive but thrive and grow! I would love to hear your thoughts on all of this and how you are doing!

AVOID THESE 10 NETWORKING BLUNDERS – ENLIGHTENED MARKETING BLOG

Networking is a key skill in finding new opportunities. Here is the introduction to an interesting piece by Samantha Hartley of Enlightened Marketing.  Not only is this piece interesting but she has lots of other useful resources at the link below.

“Last weekend I attended an Internet Marketing conference with 180 die-hard entrepreneurs.  Everyone there was hoping to connect with potential clients, partners and vendors.  There was quite a mix of people in the room, from millionaires to newbies.

For some reason, fabulous interpersonal networking is always a powerful learning experience. Lest you think I’m focused on the negative, I’ll point out that I had just about the best time ever at this conference.  It was the perfect trifecta of learning tons of stuff, meeting super people and feeling inspired about great information to share with you.

But, sometimes “negative teachers” model things for us in ways that help the lessons stick better.  So, keep a light heart as I share these networking blunders I observed recently…..”

More at Avoid These 10 Networking Blunders | Enlightened Marketing Blog.

EMOTIONAL INTELIGENCE (EQ)

In managing any change (or indeed in handling life) an understanding of emotional intelligence theory (EQ – Emotional Quotient) is a huge advantage – here is a useful article from businessballs.com on the subject.

Emotional Intelligence – EQ – is a relatively recent behavioural model, rising to prominence with Daniel Goleman’s 1995 Book called ‘Emotional Intelligence’. The early Emotional Intelligence theory was originally developed during the 1970s and 80s by the work and writings of psychologists Howard Gardner (Harvard), Peter Salovey (Yale) and John ‘Jack’ Mayer (New Hampshire). Emotional Intelligence is increasingly relevant to organizational development and developing people, because the EQ principles provide a new way to understand and assess people’s behaviours, management styles, attitudes, interpersonal skills, and potential. Emotional Intelligence is an important consideration in human resources planning, job profiling, recruitment interviewing and selection, management development, customer relations and customer service, and more.

Emotional Intelligence links strongly with concepts of love and spirituality: bringing compassion and humanity to work, and also to ‘Multiple Intelligence’ theory which illustrates and measures the range of capabilities people possess, and the fact that everybody has a value.

The EQ concept argues that IQ, or conventional intelligence, is too narrow; that there are wider areas of Emotional Intelligence that dictate and enable how successful we are. Success requires more than IQ (Intelligence Quotient), which has tended to be the traditional measure of intelligence, ignoring eseential behavioural and character elements. We’ve all met people who are academically brilliant and yet are socially and inter-personally inept. And we know that despite possessing a high IQ rating, success does not automatically follow.

Different approaches and theoretical models have been developed for Emotional Intelligence. This summary article focuses chiefly on the Goleman interpretation. The work of Mayer, Salovey and David Caruso (Yale) is also very significant in the field of Emotional Intelligence, and will in due course be summarised here too.

emotional intelligence – two aspects

This is the essential premise of EQ: to be successful requires the effective awareness, control and management of one’s own emotions, and those of other people. EQ embraces two aspects of intelligence:

  • Understanding yourself, your goals, intentions, responses, behaviour and all.
  • Understanding others, and their feelings.

emotional intelligence – the five domains

Goleman identified the five ‘domains’ of EQ as:

  1. Knowing your emotions.
  2. Managing your own emotions.
  3. Motivating yourself.
  4. Recognising and understanding other people’s emotions.
  5. Managing relationships, ie., managing the emotions of others.

Emotional Intelligence embraces and draws from numerous other branches of behavioural, emotional and communications theories, such as NLP (Neuro-Linguistic Programming), Transactional Analysis, and empathy. By developing our Emotional Intelligence in these areas and the five EQ domains we can become more productive and successful at what we do, and help others to be more productive and successful too. The process and outcomes of Emotional Intelligence development also contain many elements known to reduce stress for individuals and organizations, by decreasing conflict, improving relationships and understanding, and increasing stability, continuity and harmony.

emotional intelligence competence framework, case studies, examples, tools, tests, information and related theory references

The following excellent free Emotional Intelligence materials in pdf file format (Acrobat Reader required to view) are provided with permission of Daniel Goleman on behalf of the Consortium for Research on Emotional Intelligence, which is gratefully acknowledged:


The Emotional Competence Framework – a generic EQ competence framework produced by Daniel Goleman and CREI covering in summary:

  • personal competence – self-awareness, self-regulation, self-motivation
  • social competence – social awareness, social skills

‘Emotional Intelligence: what is it and why it matters’. An excellent information paper by Dr Cary Cherniss originally presented at the annual meeting of the Society for Industrial and Organizational Psychology, in New Orleans, April 2000. This is a detailed history and explanation of Emotional Intelligence.


The Business Case for Emotional Intelligence – a paper by Dr Cary Cherniss featuring 19 referenced business and organizational case studies demonstrating how Emotional Intelligence contributes to corporate profit performance. The paper is an excellent tool which trainers, HR professionals and visionaries can use to help justify focus, development, assessment, etc., of EQ in organizations.


Guidelines for Promoting Emotional Intelligence in the Workplace – a paper chiefly constructed by Cary Cherniss and Daniel Goleman featuring 22 guidelines which represent the best current knowledge relating to the promotion of EQ in the workplace, summarised as:

paving the way

  • assess the organization’s needs
  • assessing the individual
  • delivering assessments with care
  • maximising learning choice
  • encouraging participation
  • linking goals and personal values
  • adjusting individual expectations
  • assessing readiness and motivation for EQ development

doing the work of change

  • foster relationships between EQ trainers and learners
  • self-directed chnage and learning
  • setting goals
  • breaking goals down into achievable steps
  • providing opportunities for practice
  • give feedback
  • using experiential methods
  • build in support
  • use models and examples
  • encourage insight and self-awareness

encourage transfer and maintenance of change (sustainable change)

  • encourage application of new learning in jobs
  • develop organizational culture that supports learning

evaluating the change – did it work?

  • evaluate individual and organizational effect

More information about Emotional Intelligence, plus details of EQ tests, EQ training and EQ development in general are available at the Consortium for Research on Emotional Intelligence in Organizations.


tips on how to explain emotional intelligence – perspectives and examples

As mentioned above, Daniel Goleman’s approach to Emotional Intelligence is not the only one. The work of Mayer, Salovey and Caruso is also very significant in the field of Emotional Intelligence and can be explored further on John Meyer’s Emotional Intelligence website.

When teaching or explaining Emotional Intelligence it can be helpful to the teacher and learners to look at other concepts and methodologies, many of which contain EQ elements and examples.

Emotional Intelligence tests/activities/exercises books – for young people ostensibly, but just as relevant to grown-ups – provide interesting and useful exercises, examples, theory, etc., for presentations and participative experience if you are explaining EQ or teaching a group. For example ’50 Activities For Teaching Emotional Intelligence’ by Dianne Schilling – my copy was published by Innerchoice Publishing – ISBN 1-56499-37-0, if you can find it. Otherwise look at Amazon and search for ‘activities for teaching emotional intelligence’).

There’s a very strong link between EQ and TA (Transactional Analysis). To understand and explain EQ you can refer to the ‘adult’ aspect of the TA model (for example, we are less emotional intelligent/mature when slipping into negative child or parent modes). In this way we can see that one’s strength in EQ is certainly linked to personal experience, especially formative years.

NLP (Neuro-Linguistic Programming) is very relevant to EQ, as is Multiple Intelligences Theory.

Ethical business and socially responsible leadership are strongly connected to EQ.

So is the concept of love and spirituality in organisations. Compassion and humanity are fundamental life-forces; our Emotional Intelligence enables us to appreciate and develop these vital connections between self, others, purpose, meaning, existence, life and the world as a whole, and to help others do the same.

People with strong EQ have less emotional ‘baggage’, and conversely people with low EQ tend to have personal unresolved issues which either act as triggers (see Freud/Penfield TA roots explanation) or are constants in personality make-up.

Cherie Carter-Scott’s ‘If Life Is Game’ and Don Miguel Ruiz’s The Four Agreements’ also provide excellent additional EQ reference perspectives.

Empathy and active interpretive modes of listening are also very relevant to EQ.

Ingham and Luft’s Johari Window and associated exercises on the free team building games section also help explain another perspective. That is, as a rule, the higher a person’s EQ, the less insecurity is likely to be present, and the more openness will be tolerated.

High EQ = low insecurity = more openness.

A person’s preparedness to expose their feelings, vulnerabilities, thoughts, etc., is a feature of EQ. Again the converse applies. Johari illustrates this very well (see the Johari Window diagram pdf also).

Maslow’ theory is also relevant to Emotional Intelligence. Self-actualizers naturally have stronger EQ. People struggling to meet lower order needs – and arguably even middle order needs such as esteem needs – tend to have lower EQ than self-actualisers. The original 5 stage Hierarchy of Needs explains that all needs other than self-actualisation are deficiency drivers, which suggest, in other words, some EQ development potential or weakness.

There is a strong thread of EQ running through Stephen Covey’s 7 Habits.

In fact, most theories involving communications and behaviour become more powerful and meaningful when related to Emotional Intelligence, for example:

Leadership

Buying Facilitation®

Benziger Thinking Styles and Assessment Model

McGregor XY Theory


The use of this material is free provided copyright (see below) is acknowledged and reference or link is made to the www.businessballs.com website. This material may not be sold, or published in any form. Disclaimer: Reliance on information, material, advice, or other linked or recommended resources, received from Alan Chapman, shall be at your sole risk, and Alan Chapman assumes no responsibility for any errors, omissions, or damages arising. Users of this website are encouraged to confirm information received with other sources, and to seek local qualified advice if embarking on any actions that could carry personal or organisational liabilities. Managing people and relationships are sensitive activities; the free material and advice available via this website do not provide all necessary safeguards and checks. Please retain this notice on all copies.

© alan chapman 2000-2009, based on Daniel Goleman’s EQ concept.

Balanced Scorecard: an Explanation

Balanced scorecard; Kaplan and Norton’s organisational performance management tool

Balanced scorecard -understanding it matters. In times of change, understanding performance is key to business survival!

In the beginning was darkness. We went to work, did our job (well or otherwise) and went home – day in and day out. We did not have to worry about targets, annual assessments, metric-driven incentives, etc. Aahh… life was simple back then.

Then there came light. Bosses everywhere cast envious eyes towards our transatlantic cousins whose ambition was to increase production and efficiency year-by-year. Like eager younger siblings we trailed behind them on the (sometimes) thorny path to enlightenment.

Early Metric-Driven Incentives – MDIs – were (generally) focused on the financial aspects of an organisation by either claiming to increase profit margins or reduce costs. They were not always successful, for instance driving down costs could sometimes be at the expense of quality, staff (lost expertise) or even losing some of your customer base.

Two eminent doctors (Robert S Kaplan and David P Norton) evolved their Balanced Scorecard system from early MDIs and jointly produced their (apparently) ground-breaking book in 1996. Many other ‘gurus’ have jumped on the Balanced Scorecard wagon and produced a plethora of books all purporting to be the ‘Definitive’ book on Balanced Scorecards. Amazon.com shows over 4,000 books listed under Balanced Scorecards, so take your pick – and your chances!

balanced scorecard – definition

What exactly is a Balanced Scorecard? A definition often quoted is: ‘A strategic planning and management system used to align business activities to the vision statement of an organisation’. More cynically, and in some cases realistically, a Balanced Scorecard attempts to translate the sometimes vague, pious hopes of a company’s vision/mission statement into the practicalities of managing the business better at every level.

A Balanced Scorecard approach is to take a holistic view of an organisation and co-ordinate MDIs so that inefficiencies are experienced by all departments and in a joined-up fashion.

To embark on the Balanced Scorecard path an organisation first must know (and understand) the following:

  • The company’s mission statement
  • The company’s strategic plan/vision

Then

  • The financial status of the organisation
  • How the organisation is currently structured and operating
  • The level of expertise of their employees
  • Customer satisfaction level

The following table indicates what areas may be looked at for improvement (the areas are not exhaustive and are often company-specific):

balanced scorecard – factors examples

Department Areas
Finance Return On Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
Internal Business Processes Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in the right department?)
Process bottlenecks
Process automation
Learning & Growth Is there the correct level of expertise for the job?
Employee turnover
Job satisfaction
Training/Learning opportunities
Customer Delivery performance to customer
Quality performance for customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate

Once an organization has analysed the specific and quantifiable results of the above, they should be ready to utilise the Balanced Scorecard approach to improve the areas where they are deficient.

The metrics set up also must be SMART (commonly, Specific, Measurable, Achievable, Realistic and Timely) – you cannot improve on what you can’t measure! Metrics must also be aligned with the company’s strategic plan.

A Balanced Scorecard approach generally has four perspectives:

  1. Financial
  2. Internal business processes
  3. Learning & Growth (human focus, or learning and development)
  4. Customer

Each of the four perspectives is inter-dependent – improvement in just one area is not necessarily a recipe for success in the other areas.

balanced scorecard

balance scorecard implementation

Implementing the Balanced Scorecard system company-wide should be the key to the successful realisation of the strategic plan/vision.

A Balanced Scorecard should result in:

  • Improved processes
  • Motivated/educated employees
  • Enhanced information systems
  • Monitored progress
  • Greater customer satisfaction
  • Increased financial usage

There are many software packages on the market that claim to support the usage of Balanced Scorecard system.

For any software to work effectively it should be:

  • Compliant with your current technology platform
  • Always accessible to everyone – everywhere
  • Easy to understand/update/communicate

It is of no use to anyone if only the top management keep the objectives in their drawers/cupboards and guard them like the Holy Grail.

Feedback is essential and should be ongoing and contributed to by everyone within the organization.

And it should be borne in mind that Balanced Scorecards do not necessarily enable better decision-making!

The use of this material is free provided copyright (see below) is acknowledged and reference or link is made to the www.businessballs.com website. This material may not be sold, or published in any form. Disclaimer: Reliance on information, material, advice, or other linked or recommended resources, received from Alan Chapman, shall be at your sole risk, and Alan Chapman assumes no responsibility for any errors, omissions, or damages arising. Users of this website are encouraged to confirm information received with other sources, and to seek local qualified advice if embarking on any actions that could carry personal or organizational liabilities. Managing people and relationships are sensitive activities; the free material and advice available via this website do not provide all necessary safeguards and checks. Please retain this notice on all copies.

© Sandra McCarthy and Alan Chapman 2008.

Balanced Scorecards explanation, examples, aims, implementation and teaching aid diagram for the concept..

UNDERSTAND MORE ABOUT YOUR COMPANY'S PERFORMANCE – A SIMPLE GUIDE TO BALANCED SCORECARD COURTESY OF BUSINESSBALLS

balanced scorecard

kaplan and norton’s organizational performance management tool

In times of change understanding performance is key to business survival!

In the beginning was darkness. We went to work, did our job (well or otherwise) and went home – day in and day out. We did not have to worry about targets, annual assessments, metric-driven incentives, etc. Aahh… life was simple back then.

Then there came light. Bosses everywhere cast envious eyes towards our transatlantic cousins whose ambition was to increase production and efficiency year-by-year. Like eager younger siblings we trailed behind them on the (sometimes) thorny path to enlightenment.

Early Metric-Driven Incentives – MDIs – were (generally) focused on the financial aspects of an organization by either claiming to increase profit margins or reduce costs. They were not always successful, for instance driving down costs could sometimes be at the expense of quality, staff (lost expertise) or even losing some of your customer base.

Two eminent doctors (Robert S Kaplan and David P Norton) evolved their Balanced Scorecard system from early MDIs and jointly produced their (apparently) ground-breaking book in 1996. Many other ‘gurus’ have jumped on the Balanced Scorecard wagon and produced a plethora of books all purporting to be the ‘Definitive’ book on Balanced Scorecards. Amazon.com shows over 4,000 books listed under Balanced Scorecards, so take your pick – and your chances!

balanced scorecard – definition

What exactly is a Balanced Scorecard? A definition often quoted is: ‘A strategic planning and management system used to align business activities to the vision statement of an organization’. More cynically, and in some cases realistically, a Balanced Scorecard attempts to translate the sometimes vague, pious hopes of a company’s vision/mission statement into the practicalities of managing the business better at every level.

A Balanced Scorecard approach is to take a holistic view of an organization and co-ordinate MDIs so that efficiencies are experienced by all departments and in a joined-up fashion.

To embark on the Balanced Scorecard path an organization first must know (and understand) the following:

  • The company’s mission statement
  • The company’s strategic plan/vision

Then

  • The financial status of the organization
  • How the organization is currently structured and operating
  • The level of expertise of their employees
  • Customer satisfaction level

The following table indicates what areas may be looked at for improvement (the areas are not exhaustive and are often company-specific):

balanced scorecard – factors examples

Department Areas
Finance Return On Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
Internal Business Processes Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in the right department?)
Process bottlenecks
Process automation
Learning & Growth Is there the correct level of expertise for the job?
Employee turnover
Job satisfaction
Training/Learning opportunities
Customer Delivery performance to customer
Quality performance for customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate

Once an organization has analysed the specific and quantifiable results of the above, they should be ready to utilise the Balanced Scorecard approach to improve the areas where they are deficient.

The metrics set up also must be SMART (commonly, Specific, Measurable, Achievable, Realistic and Timely) – you cannot improve on what you can’t measure! Metrics must also be aligned with the company’s strategic plan.

A Balanced Scorecard approach generally has four perspectives:

  1. Financial
  2. Internal business processes
  3. Learning & Growth (human focus, or learning and development)
  4. Customer

Each of the four perspectives is inter-dependent – improvement in just one area is not necessarily a recipe for success in the other areas.

balanced scorecard

balance scorecard implementation

Implementing the Balanced Scorecard system company-wide should be the key to the successful realisation of the strategic plan/vision.

A Balanced Scorecard should result in:

  • Improved processes
  • Motivated/educated employees
  • Enhanced information systems
  • Monitored progress
  • Greater customer satisfaction
  • Increased financial usage

There are many software packages on the market that claim to support the usage of Balanced Scorecard system.

For any software to work effectively it should be:

  • Compliant with your current technology platform
  • Always accessible to everyone – everywhere
  • Easy to understand/update/communicate

It is of no use to anyone if only the top management keep the objectives in their drawers/cupboards and guard them like the Holy Grail.

Feedback is essential and should be ongoing and contributed to by everyone within the organization.

And it should be borne in mind that Balanced Scorecards do not necessarily enable better decision-making!

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© Sandra McCarthy and Alan Chapman 2008.

Balanced Scorecards explanation, examples, aims, implementation and teaching aid diagram for the concept..