One of our customers asked, how often he should do a major upgrade of their Balanced Scorecard. I had some thoughts on the topic which mainly were focused on the link between a company's strategy and a Balanced Scorecard. Trying to put things together I found out that an upgrade plan for the Balanced Scorecard is quite similar to the one for a car:
-- One need for feeding BSC with data; is similar to tanking a car with fuel;
-- There are some minor updates, choosing better KPIs if needed; which are similar to car's regular service checks;
-- There are major upgrades of BSC stressed by changed business environment; in car analogy, as when one buys a new car because life's priorities have changed;
Following a car analogy: modern cars have an oil life indicator that is based on the measurement of electric conductivity. It tells a driver based on actual data when it is time to go to the service center. My idea is to supply a business scorecard with an "upgrade is needed" indicator, which might be as simple as a countdown of a specified period of time or a sophisticated combination of other indicators.
All these ideas were summarized in the presentation and the article here:
http://www.bscdesigner.com/upgrade-is-needed-indicator-for-bsc.htm
What do you think about an idea to use "upgrade is needed" indicator on a scorecard?
3. BSC DESIGNER
MOST STUFF HAS AN EXPIRATION
DATE
• Milk’s “best before”
date
• Expiration date on the
pack of medicine
4. BSC DESIGNER
MOST STUFF HAS AN EXPIRATION
DATE
• Helps consumers to get a rough idea about
the condition of the product
5. BSC DESIGNER
MOST STUFF HAS AN EXPIRATION
DATE
• Helps consumers to get a rough idea about
the condition of the product
• Avoid buying something spoiled
6. BSC DESIGNER
MOST STUFF HAS AN EXPIRATION
DATE
• This idea can be applied to any product,
especially to those ones that depend on
changing environments.
7. BSC DESIGNER
THE REASONS OF THIS IDEA
• The product design and functions are getting
out of the date
8. BSC DESIGNER
THE REASONS OF THIS IDEA
• The product design and functions are getting
out of the date
• User’s requirements change
9. BSC DESIGNER
THE REASONS OF THIS IDEA
• The product design and functions are getting
out of the date
• User’s requirements change
• Technologies suggest new opportunities
10. BSC DESIGNER
EXAMPLES OF THIS IDEA
• According to analysis done
by Infonetics, a brand new
smart phone will be
upgraded in 7-9 months
(prepaid users) or in 18 to
20 months (postpaid
users);
11. BSC DESIGNER
EXAMPLES OF THIS IDEA
• According to analysis done by Infonetics, a
brand new smart phone will be upgraded in 7-
9 months (prepaid users) or in 18 to 20
months (postpaid users);
• According to Forbes an average car in the U.S.
is now over 10 years old.
12. BSC DESIGNER
WHAT ABOUT THE BALANCED
SCORECARD?
• The implementation of the business system
can have an expiration date as well.
13. BSC DESIGNER
WHAT ABOUT THE BALANCED
SCORECARD?
• The implementation of the business system
can have an expiration date as well.
• A Balanced Scorecard, as any other product
based on changing business conditions, has a
“best before” date.
14. BSC DESIGNER
A DETAILED UPDATED PLAN FOR THE
BALANCED SCORECARD
Source: www.bscdesigner.com | Illustrations: pixabay.com
BALANCED SCORECARD CAR ANALOGY
1
BSC prototype
Many companies start with a prototype
of the business scorecard.
The car that you drove when
you got your driving license
Source: www.bscdesigner.com | Illustrations: pixabay.com
15. BSC DESIGNER
A DETAILED UPDATED PLAN FOR THE
BALANCED SCORECARD
Source: www.bscdesigner.com | Illustrations: pixabay.com
BALANCED SCORECARD CAR ANALOGY
1
BSC prototype
Many companies start with a prototype
of the business scorecard.
The car that you drove when
you got your driving license
2
Operational update of the BSC
Updating KPIs' values;
Adding new action plans;
Reporting back to the system.
Fill car's tank with fuel
Source: www.bscdesigner.com | Illustrations: pixabay.com
16. BSC DESIGNER
A DETAILED UPDATED PLAN FOR THE
BALANCED SCORECARD
Source: www.bscdesigner.com | Illustrations: pixabay.com
BALANCED SCORECARD CAR ANALOGY
1
BSC prototype
Many companies start with a prototype
of the business scorecard.
The car that you drove when
you got your driving license
2
Operational update of the BSC
Updating KPIs' values;
Adding new action plans;
Reporting back to the system.
Fill car's tank with fuel
3
Maintenance of the BSC
An upgrade of the KPIs to ones more
suitable.
Check your engine and
change oil
Source: www.bscdesigner.com | Illustrations: pixabay.com
17. BSC DESIGNER
A DETAILED UPDATED PLAN FOR THE
BALANCED SCORECARD
Source: www.bscdesigner.com | Illustrations: pixabay.com
BALANCED SCORECARD CAR ANALOGY
1
BSC prototype
Many companies start with a prototype
of the business scorecard.
The car that you drove when
you got your driving license
2
Operational update of the BSC
Updating KPIs' values;
Adding new action plans;
Reporting back to the system.
Fill car's tank with fuel
3
Maintenance of the BSC
An upgrade of the KPIs to ones more
suitable.
Check your engine and
change oil
4
Rethink your scorecard
Update a business strategy of your
company and, as a result, you need to
upgrade your Balanced Scorecard.
It is time to buy a new car!
Source: www.bscdesigner.com | Illustrations: pixabay.com
19. BSC DESIGNER
WE’D BETTER CALL IT “UPGRADE
DATE”
• With consumer products “expiration” or “best
before” date means that after this date the
product is in a bad condition and you should
not buy or use it.
20. BSC DESIGNER
WE’D BETTER CALL IT “UPGRADE
DATE”
• In this sense the Balanced Scorecard (as a
business concept) probably has some kind of
expiration date, but
• it depends a lot on new breakthroughs in
management science.
21. BSC DESIGNER
WE’D BETTER CALL IT “UPGRADE
DATE”
• When we tell someone that the business
scorecard is out of date we don’t mean that
we need to get rid of it.
22. BSC DESIGNER
WE’D BETTER CALL IT “UPGRADE
DATE”
• When we tell someone that the business
scorecard is out of date we don’t mean that
we need to get rid of it.
• What we mean is that this scorecard needs to
be upgraded.
23. BSC DESIGNER
WE’D BETTER CALL IT “UPGRADE
DATE”
• Let’s go ahead with a scorecard upgrade plan.
An analogy with a car will help.
24. BSC PROTOTYPE. THE CAR
THAT YOU DROVE WHEN
YOU GOT YOUR DRIVING
LICENSE.
26. BSC DESIGNER
BSC PROTOTYPE
• Many companies start with a prototype of the
business scorecard.
• In most cases it is a spreadsheet in MS Excel.
27. BSC DESIGNER
BSC PROTOTYPE
• Many companies start with a prototype of the
business scorecard.
• In most cases it is a spreadsheet in MS Excel.
• It is hard to maintain and is actually a set of
indicators focused on measurement, rather
than on management.
28. BSC DESIGNER
BSC PROTOTYPE
• You will find out that this scorecard doesn’t
meet the growing requirements of your
business.
29. BSC DESIGNER
THE CAR THAT YOU DROVE WHEN YOU
GOT YOUR DRIVING LICENSE
• It can be compared to a first car that one
drives right after getting a driving license.
30. BSC DESIGNER
THE CAR THAT YOU DROVE WHEN YOU
GOT YOUR DRIVING LICENSE
• It can be compared to a first car that one
drives right after getting a driving license.
• You sell your first car and buy a new one that
is more suitable for a more experienced driver
31. BSC DESIGNER
THE CAR THAT YOU DROVE WHEN YOU
GOT YOUR DRIVING LICENSE
• If you started something in Excel it will be
really hard to upgrade it to the professional
performance management software
32. BSC DESIGNER
THE CAR THAT YOU DROVE WHEN YOU
GOT YOUR DRIVING LICENSE
• If you started something in Excel it will be
really hard to upgrade it to the professional
performance management software
• An upgrade is less painful if you started with a
free BSC Designer Light, which can be later
upgraded to Standard or Pro editions.
36. BSC DESIGNER
OPERATIONAL UPDATE OF THE BSC
• Updating KPIs’ values;
• Adding new action plans;
• Reporting back to the system.
37. BSC DESIGNER
FILL CAR’S TANK WITH FUEL
• You just need to keep an eye on its fuel level
and fill the car’s tank with fuel (feed your BSC
with data) regularly.
39. BSC DESIGNER
CHECK YOUR ENGINE AND CHANGE
OIL
• Car manufacturers suggest that trained
mechanics should examine your car regularly.
40. BSC DESIGNER
CHECK YOUR ENGINE AND CHANGE
OIL
• Car manufacturers suggest that trained
mechanics should examine your car regularly.
• Any complex system needs to be revised
regularly.
44. BSC DESIGNER
IT IS TIME TO BUY A NEW CAR
• A better paid job, a new house, or need to
participate in school run program
45. BSC DESIGNER
IT IS TIME TO BUY A NEW CAR
• A better paid job, a new house, or need to
participate in school run program
• Your environment and priorities have
changed, so you think about buying a new car.
46. BSC DESIGNER
RETHINK YOUR BUSINESS SCORECARD
• You need to update a business strategy of your
company and, as a result, you need to
upgrade your Balanced Scorecard.
47. BSC DESIGNER
RETHINK YOUR BUSINESS SCORECARD
Besides major market shakes there are some
less obvious drivers of the strategy change:
48. BSC DESIGNER
RETHINK YOUR BUSINESS SCORECARD
• It might be as simple as the complete
execution of the current strategic plan or…
49. BSC DESIGNER
RETHINK YOUR BUSINESS SCORECARD
• It might be as simple as the complete
execution of the current strategic plan or…
• New people with new points of view came
into your team; you need to upgrade your
strategy taking in account their experience.
50. BSC DESIGNER
WHAT BUSINESS TOOL DO YOU USE TO
MAKE DECISIONS?
• If you find that your team uses BSC less and
less, then the scorecard needs to be
upgraded.
51. HOW OFTEN DO YOUR
UPGRADE YOUR
SCORECARD? HOW OFTEN
DO YOU BUY A NEW CAR?
52. BSC DESIGNER
HOW OFTEN DO YOUR UPGRADE
YOUR SCORECARD?
• Frequent upgrades of the BSC are the sign that
the scorecard is not “strategic” enough.
53. BSC DESIGNER
HOW OFTEN DO YOUR UPGRADE
YOUR SCORECARD?
• Frequent upgrades of the BSC are the sign that
the scorecard is not “strategic” enough.
• The general recommendation would be to
look at major market shakes and their
regularity.
54. BSC DESIGNER
ONLINE BUSINESS EXAMPLE
• In the online business rules change fast.
• It makes sense to revise your with each major
Google upgrade.
• At least the parts that are responsible for
content and search engine marketing
56. BSC DESIGNER
YOUR CAR TELLS YOU WHEN THE
MAINTENANCE IS NEEDED
Your car tells you when
the maintenance is needed.
Source: www.bscdesigner.com | Illustrations: pixabay.com
57. BSC DESIGNER
YOUR CAR TELLS YOU WHEN THE
MAINTENANCE IS NEEDED
Incorporate an "update
needed" indicator in your
scorecard.
Your car tells you when
the maintenance is needed.
Source: www.bscdesigner.com | Illustrations: pixabay.com
58. BSC DESIGNER
INCORPORATE AN “UPDATE NEEDED”
INDICATOR IN YOUR SCORECARD
• It might be programmed to attract your
attention in a 12 month period
59. BSC DESIGNER
INCORPORATE AN “UPDATE NEEDED”
INDICATOR IN YOUR SCORECARD
• It might be programmed to attract your
attention in a 12 month period
• You might want to have an alert when
selected KPIs achieve their specified values.
60. BSC DESIGNER
INCORPORATE AN “UPDATE NEEDED”
INDICATOR IN YOUR SCORECARD
• It might be programmed to attract your
attention in a 12 month period
• You might want to have an alert when
selected KPIs achieve their specified values.
• Adding a kind of a “time capsule” in the
description field of this indicator.
62. BSC DESIGNER
MAIN TAKEAWAYS
• Balanced scorecard has an expiration date; it
need to be revised and upgraded regularly;
63. BSC DESIGNER
MAIN TAKEAWAYS
• Balanced scorecard has an expiration date; it
need to be revised and upgraded regularly;
• Balanced scorecard is a derivative of a
strategy; once the strategy is revised, the
scorecard needs to be revised as well;
64. BSC DESIGNER
MAIN TAKEAWAYS
• When things change, there might be external
factors (competitors, market regulators,
technologies) as well as internal ones (your
team, new experience);
65. BSC DESIGNER
MAIN TAKEAWAYS
• When things change, there might be external
factors (competitors, market regulators,
technologies) as well as internal ones (your
team, new experience);
• Add an “Upgrade is needed” indicator to your
scorecard with a “time capsule” in the
description; in this way you will be prepared
for the next upgrade.
66. BSC DESIGNER
MORE ABOUT THE BALANCED SCORECARD
Find more insightful
articles about the
Balanced Scorecard
in ”Articles” section at
www.bscdesigner.com
BSC DESIGNER