Balanced Scorecard Institute (BSI)

 

Step 1: Assessment

It is critical that before an organization maps out its future there is some consensus around where things currently stand. During the Assessment step, an analysis of the current internal and external environments is completed. As part of this step, organization develops or re-validates high-level strategic elements (e.g., mission, vision, values, market assessments, enablers & challenges, primary and secondary customer / stakeholder needs analysis and others) needed for context in strategy formulation.

Step 2: Strategy

Building on the assessment, organizations formulate/clarify strategy in the Strategy step. The development of the strategy includes developing or clarifying your customer value proposition, visualizing strategy using a Strategy Profile and decomposing the high-level strategic direction into three to four Strategic Themes (or goals). Strategic Themes are those focus areas in which the organization must excel in order to fulfill its mission and achieve its vision, given the enablers it can leverage, the challenges it must overcome, and the customer value proposition it must deliver upon.

Step 3: Strategic Objectives

In the Strategic Objectives step, the building blocks of strategy are developed. Strategic Objectives are the linchpins of a successful strategic planning and management system and are the key to implementing strategy. Objectives are qualitative, continuous improvement actions (outcomes) critical to strategy success. Objectives are developed on the strategic theme level first and then merged together to form organization-level Objectives.

Step 4: Strategy Mapping

In the Strategy Mapping step, cause-and-effect links are developed between the Strategic Objectives, creating a “value chain” of how customers and stakeholders are satisfied by the organization’s products and services. Strategy Maps are developed for each theme to ensure a complete strategy to achieve each strategic result and then those are merged into a final organizational Strategy Map. A Strategy Map is a graphic that shows the cause-and-effect relationships of objectives across the four perspectives, telling the story of how the organization will achieve the results desired.

Step 5: Performance Measures

Performance Measures (KPIs) are critical to tracking progress of an organization’s strategy. The image below shows the inter-connectivity relationships among different types of performance measures. Operational measures focus on the use of resources, processes and production (output). These measures “drive” the outcomes a business desires, with some outcomes being more intermediate than other, more final, outcomes. Our process gets at these relationships, so you can identify the most meaningful outcome measures to determine if your actions are leading to the strategic results you desire.

Step 6: Strategic Initiatives

In the Strategic Initiatives step, the projects that are critical to success of the strategy, are developed, prioritized, and implemented. Initiatives help close performance gaps in performance to hit targets. It is important to focus the organization on the execution of the most prioritized strategic projects versus creating a long list of potential actions and projects. Without this disciplined focus, organizations struggle to execute their strategy.

Step 7: Performance Analysis

In the Performance Analysis step, data is transformed into evidence-based knowledge and understanding. Effective analysis helps people make better decisions that will drive improved strategic outcomes. This step focuses on measuring and evaluating performance to identify what works well and what doesn’t, taking corrective action and becoming a high-performance organization.

Step 8: Alignment

In the Alignment step, strategy is transformed from something only executives worry about to something everyone supports by cascading high-level enterprise strategy to first business and support units and then to individual employees. The Alignment step produces scorecards for business and support units, and individual scorecards for each employee or team.

Step 9: Evaluation

Evaluation is an opportunity to review and refresh. During this step, leaders and mangers evaluate how well the organization has accomplished desired results and how well the strategic management system improves communications, alignment and performance. It ensures that the strategic planning and management system is dynamic and incorporates continuous improvement into day-to-day operations and management.