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Balanced Scorecard Cascading
Human Resources » Performance Management


Chrm Message From: keiths Total Posts: 5 Join Date: 08/01/2016
Rank: Beginner Post Date: 14/01/2016 06:59:46 Points: 25 Location: Kenya

Good strategy implies the coherence between objectives and the way people interpret them on each level of the organization. In the business scorecards this coherence is achieved via the cascading process. In this article I’d like to use some examples of cascading to summarize the best practices and typical pitfalls.

What is Cascading?

A top-level Balanced Scorecard cannot be used directly by business units or front-line employees; the scorecard needs to be cascaded:

Cascading was introduced in earlier works about the Balanced Scorecard framework (see books reference below) as a way to populate the scorecard through the organization.

Cascading vs. Alignment

In the later works authors of the Balanced Scorecard concept shifted from the term “cascading” (that implies top-down approach to the translation of the strategy, which is not always the best scenario) to the “alignment.”

Both terms “cascading” and “alignment” refer to the discussion around the strategy and its objectives. This discussion makes it easy for business units to understand their role in strategy execution.

Scorecard Cascading or Strategy Alignment Exercise

Let’s take a simple example to show how strategy alignment (or cascading) works, what principles are important, and where typical pitfalls are. Any business has a website these days, so for an example, let’s take the discussion around a company’s online presence, customer experience and the company’s website.

You can read the remaining article at this link http://www.bscdesigner.com/cascading.htm

Regards,

Keiths

Chrm Message From: debora Total Posts: 93 Join Date: 08/01/2016  
Rank: Manager Post Date: 16/09/2019 11:30:00 Points: 350 Location: Kenya

The Balanced Scorecard process lays out nine key steps for success. Starting with a full and rigorous assessment of the organisation, it then moves on to strategic planning and then objectives setting. This is perhaps the section of the process that leaders are most comfortable with and tend to focus their energies upon.

Most successful businesses will find that their executive team can create a coherent and logical business strategy that stretches and inspires the organisation’s people, answers the needs of the business and defines its intended direction, engages customers, and ultimately delivers the underlying objective of the organisation, whether it is profit-led or non-profit. So far, so good.

The barriers to cascading balanced scorecards

There are a number of common barriers to ensuring a successful strategy cascade:

Time

The first tends to be time. Businesses often fail to appreciate just how much time is needed to carry out a comprehensive and planned organisation-wide cascade. For even a small company the process can take three to four months if it is to be done correctly. For a medium to large company, it can take over a year to establish the process. This is particularly the case when the Balanced Scorecard framework is providing process rigour and structure for the first time. 

Know-how

The second issue is knowledge. If the executive team are not sufficiently clear about the process of the Balanced Scorecard and their role in setting expectations for the strategic rollout, then it will fail. The executive team must take a strong position to ensure that operational leads take the necessary action to create their own departmental-level objectives and that those objectives are genuinely in line with the intentions of the broader strategy. The key question is: In what way can our department impact on each strategic objective in the enterprise-wide plan?. 

Communication and process

The third common blocker tends to be communication and process. The Balanced Scorecard process relies on excellent, clear and regular communication that is expertly planned and delivered by the right people. At the same time, the process needs to be carefully managed and the right time needs to be given to operational leads so that they prioritise their scorecard planning, and deliver their role in the business strategy cascade. The executive team must commit to having face-to-face Q&As and communication sessions with different layers of the organisation and different teams.

The theory may make sense, but how can the practical challenges be overcome to ensure success? In the next article, we will look at the cascade to departments, and consider how organisations can better manage this process for the results that they want.

 

 

Chrm Message From: debora Total Posts: 93 Join Date: 08/01/2016  
Rank: Manager Post Date: 03/10/2019 11:50:40 Points: 350 Location: Kenya

Cascading a balanced scorecard means to translate the corporate-wide scorecard (referred to as Tier 1) down to first business units, support units or departments (Tier 2) and then teams or individuals (Tier 3). The end result should be focus across all levels of the organization that is consistent. The organization alignment should be clearly visible through strategy, using the strategy map, performance measures and targets, and initiatives. Scorecards should be used to improve accountability through objective and performance measure ownership, and desired employee behaviors should be incentivized with recognition and rewards.

Cascading strategy focuses the entire organization on strategy and creating line-of-sight between the work people do and high level desired results. As the management system is cascaded down through the organization, objectives become more operational and tactical, as do the performance measures. Accountability follows the objectives and measures, as ownership is defined at each level. An emphasis on results and the strategies needed to produce results is communicated throughout the organization. This alignment step is critical to becoming a strategy-focused organization.

Some of the common challenges that organizations have with cascading include:

§  Employees don't understand enough about the process to be effective

§  Cascading approach/structure was poorly planned (resulting in false starts)

§  There is a disconnect between tiers due to delegation or other problems

§  The organization level scorecard is misunderstood or hard to communicate

§  Some units are cascading well while others are lost

 

 
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