EXECUTION EXCELLENCE

MAKING STRATEGY WORK USING THE BALANCED SCORECARD

BY SANJIV ANAND

RELEASED GLOBALLY

RELEASED GLOBALLY

"Execution Excellence is a very clear roadmap for

any manager serious about improving performance with a team."

— RON SANDERS, President, Warner Bros. Worldwide Home Entertainment

"Sanjiv certainly did not disappoint. The book is certainly a compenduim of

incredible experience he has had a Consultant in different circumstances."

— AKHIL GUPTA, Vice Chairman, Bharti Enterprises

Chapters

 

Table of Contents

CHAPTERS Preface .......xv

Acknowledgments .......xvii

 

I THE REALWORLD OF STRATEGY 1

1. The Global Business Environment in Today’s Flat World: News Flows Faster than Water! .......3

So Where Do We Go from Here? .......5

What Does That Mean? .......5

2. The Evolving Role of Strategy: Is Strategy Dead? .......7

Blue-Sky Strategy .......8

Back-to-Basics Strategy .......8

3. Strategy Formulation: Building a Strategy that Works .......11

External Assessment .......12

Internal Assessment .......12

4. Strategy Execution: It’s All About the Implementation .......17

5. The Business Planning Process: Don’t Let the Process Overrun You .......19

Ownership .......21

 

II INTRODUCING THE BALANCED SCORECARD .......23

6. Introducing the Balanced Scorecard: Circa 1992 and Still Going Strong .......25

History .......25

Basic BSC Framework .......26

Design .......29

Implementation .......30

Cascades .......30

Individual BSC .......30

Using the BSC to Formulate Strategy .......31

 

7. Challenges in Implementing the Balanced Scorecard Successfully: Time to Put on a Helmet! .......33

General Challenges .......33

Design Challenges .......35

Implementation Challenges .......37

 

III CHALLENGES IN BALANCED SCORECARD DESIGN .......41

8. Designing the Strategy Map: Keep It Lite .......43

Introduction .......43

Design Methodology .......44

Strategy Map Design Components .......45

Impact of Industry Customization and Support Functions on Strategy Map Design .......49

Strategy Map Design for Nonprofit and Government Organizations .......52

The Concept of the Linkage Model .......52

Designing a Lite Version of a Strategy Map for Board Reporting: Strategic Themes .......54

9. Defining Objectives: The Wordsmith’s Challenge .......55

The Bad Way .......55

The Good Way .......56

Customer Objectives .......58

10. Picking Owners: Four Executives Don’t Run a Company .......61

Owning the Formulation .......61

Owning the Execution .......62

How Does Ownership Really Work in a BSC Meeting? .......63

BSC Ownership versus Individual Performance Measures .......64

11. The Art of Measurement: Lead, Lag, and How Many Are Enough .......67

Introduction .......67

Financial and Non-financial Measures .......68

Lead and Lag Measures .......69

Strategic versus Non-strategic Measures .......69

Financial Measures .......70

Customer Measures .......70

Internal Perspective .......72

Learning and Growth Measures .......73

Measurement Formulas .......74

Data Sources .......75

What about Missing Data Sources? .......76

How Many Are Enough? .......76

12. Units and Frequency of Measurement: Stay Honest .......79

Units of Measurement .......80

Key Milestone Indicators (KMS) .......80

Decimals .......81

Frequency of Measurement .......81

13. Target Setting: Actionable or Aspirational? .......83

Target Intensity .......83

How Many Targets to Set of Each Kind?.......85

Target-Setting Benchmarks.......86

Target Calculation.......88

14. Initiative Alignment: Are You Overrun with Projects?.......89

15. Designing Cascades: Top Down or Bottom Up.......93

Introduction.......93

The Next Level Cascade: Functional Organization.......95

Multi-divisional Structures and Cascades.......96

16. Aligning Individual and Enterprise Performance: Unlocking Human Capital.......99

Introduction.......99

The Right Way.......100

Measures.......101

Cascading Weights and Measures.......102

Bands.......103

 

IV CHALLENGES IN IMPLEMENTATION .......105

17. Selecting the Right Balanced Scorecard Coordinator: Not the Audit Team, Please! .......107

Introduction.......107

The BSC Coordinator.......108

Cascade Coordinators.......113

18. Get Ready for the First Reporting: Sixty Days to Lift-Off! .......115

Introduction.......115

Timelines.......115

The Accuracy of a Measure.......118

You Missed the Start of the Year.......118

19. How Should the First Meeting Run? And How Frequently? .......121

Introduction.......121

Deck Pre-distribution.......122

BSC Coordinator’s Role.......123

The Discussion.......124

The Discussion on Initiatives.......126

Meeting Closure.......128

What about the Cascade Scorecard Meetings?.......128

Conclusion.......128

20. What About Scorecard Automation? Mobile and Dynamic Scorecards .......129

Introduction.......129

The Excuse to Automate.......129

When to Automate?.......130

Components of BSC Automation.......131

The Automation Process: The Data Challenge.......132

Benefits of BSC Automation.......133

21. What Happens After a Meeting? Making Sure the Traction Lasts the Whole Month .......135

Introduction.......135

Circulation of Post-meeting Deck......136

Follow-up Action.......136

Complaining.......137

Ensure Cascade Alignment .......137

Initiative Action.......138

An Unfortunate Case Study: Blowing Up a $5 Billion Company.......138

22. The Communication Challenge: It’s Like Keys to the Executive Washroom.......141

Unfortunate Case Study: Paper on the Walls.......141

Start at the Design Stage......142

At the Reporting Stage.......143

Board Reporting.......143

Using It to Build a Training Agenda.......144

23. What Happens If Performance Does Not Improve? Patience and Speed Go Together.......145

Introduction.......145

It’s Not a Formula 1 Car ......145

What If There is No Cause and Effect?.......147

Too Many Reds.......148

The CEO Is Not Pushing the Agenda .......149

The Ownership of the Strategy Is Wrongly Placed.......150

24. Running a Best-in-Class Project Management Office: You Can’t Do It without a Command Center .......153

Everything Is a Project .......153

The Evolving Landscape of Project and Program Management......154

The Program Manager’s Role.......155

An Effective PMO.......155

PMO Knowledge Areas.......156

PMO Process Groups.......159

PMO Maturity Levels.......160

PMO Types and Approaches .......161

Critical Success Factors to Set Up an Effective PMO.......162

Linking the PMO to Strategy through the Balanced Scorecard.......163

25. Oops. The Strategy Has Changed: What Happens Now?.......167

Introduction.......167

Midyear Strategy Change......167

Annual Strategy Review.......170

 

IV CHALLENGES IN IMPLEMENTATION.......105

26. Conclusion.......175

Make Your Strategy Positive.......175

Execution Is about Focus.......177

Focus and Measurement.......178

Ownership.......178

Stay on Track .......178

Youth Matters .......179

Gray Hair Matters.......179

Appendix A: Industry and Function Specific Strategy Maps and Scorecards.......181

Appendix B: Bank Case Study .......227

Appendix C: Textile Company Case Study......235

Appendix D: Travel and Tourism Case Study.......245

Appendix E: Illustrative Financial Measures by Industry .......255

About the Author.......259

Index.......261