Kick off a winning year with a balanced scorecard

One of the key drivers for employee engagement is to make sure that your employees have a clear vision of the company’s future. They should see a connection to how their daily work contributes to it. The balanced scorecard is an effective tool that helps management crystallize priorities and then articulate them. Later on, the scorecard is used to track progress towards the common goals.

Drs. Robert Kaplan and David Norton created the balanced scorecard concept as a performance measurement framework to balance a purely finance-driven focus with other equally important performance indicators. These are the key performance perspectives:

• Learning and growth – effective workforce and work systems
• Business processes – operational excellence in work flows
• Customer expectations – measuring what matters to customers
• Financial expectations – measuring what matters to shareholders

One way to look at these performance indicators is that one builds on another. Without a good workforce, your work processes will not be executed to high standards. Without good workforce and high quality processes, you cannot meet customer expectations. Without meeting customer expectations, you will not be financially successful – at least not for the long haul.

The metrics in the balanced scorecard are based on the priorities of the company. Most likely you will start setting your company objectives by focusing on financial and customer expectations. When you select metrics for customer expectations, you really have to be true to your customers. If they care about your lead times, you track your lead times. If their priority is your responsiveness or quality, you must find a way to measure that. Customer satisfaction surveys provide a metric that you can track year over year.

You will meet financial and customer objectives by driving improvements in your workforce and business processes. What are your key initiatives this year? What are your business-as-usual metrics that will tell you the “state of the union”?

Once the objectives and targets are set, it is time to cascade the information down to the organization. Each business unit and each department needs to align their goals to ensure that they are contributing to the same priorities. Their goals will be subsets of the scorecard goals. The employees should see a clear line of sight from their work priorities all the way up to the company strategic priorities.

The scorecard wouldn’t be a scorecard without tracking. You set targets, and you frequently track progress to goals. The easiest way to communicate the status is to use the stoplight chart. Green means on target, yellow means limited deviation from it (often  max. 10% off), and red means too much deviation from the target. It is easy for the management and for the employees to spot where everything is going well and where problem solving is necessary.

The balanced scorecard process ensures that the strategy process does not become a once-a-year event. Instead, it will be a constant reminder of the company priorities and progress towards the common goals.

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Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
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Are your employees in the Flow?

Dr. Mihály Csíkszentmihályi first described the phenomenon called the Flow in the nineties. It is deep engagement in an activity, where you get so engrossed that you may lose your sense of time. People report deep satisfaction when getting to experience the Flow. Often, they experience it at work, but it can happen during leisure time as well, for example while reading or skiing.

Some call it the High, the Rush, the Groove at work. They would do it for free, and then again, you couldn’t pay enough to force anyone into the Flow. However, you can create an environment conducive to Flow.

Based on Dr. Csíkszentmihályi’s research, the Flow is more likely to emerge in the following conditions: There is a clear goal, a challenge that is commensurate to the skill level of the employee, light amount of pressure, immediate feedback on progress to goal, and no distractions.

Let’s look at distractions. How many of your employees are able to take even a couple of hours to work on a task, and not be expected to return calls, e-mails, IM’s, text messages. Uninterrupted work time is becoming a rarity. With it, we sacrifice the Flow, which is the most creative, the most productive and the happiest time among our workforce. How much Flow time can you afford to lose? You can start by scheduling some on the team calendar.

Clear goals do not equal dictatorial micromanagement, but sharing a clear vision and a clear purpose. When the manager knows the strengths and hold-ups of the employee, it is easier to work together to select the right level of challenges. Good Flow goals gently stretch the earlier limits of the employee’s capabilities, but are not too unrealistic. A light amount of pressure seems to help with the Flow, so “Take all the time that you need”  and “I need it by yesterday” are both extremes that will not help.

Immediate feedback on progress does not mean “Good job!” from the manager on frequent intervals. In fact, evaluative feedback is not helpful. Useful feedback in the Flow shows the employee how the work is progressing. This means metrics, charts, user comments etc. For a software developer, the code itself shows feedback on progress. The painter gets the immediate feedback on the canvas. The finance specialist sees it in the summary reports. The manager can simply help the employee to plan how to get to see the ongoing progress, if the link is not as clear.

What about rewards? For the employee, the intrinsic reward of getting to work in the Flow is the best reward of all. There are numerous studies that have proven that dangling an extrinsic reward such as a cash award in front of the employee makes them focus on the reward and find the least effort path – not necessarily the best path – to complete the task. As a side effect, they lose part of the intrinsic motivation for the task itself.

Switching your company culture to a more Flow culture will not happen overnight. You may need to teach your employees concentration skills, help wean them out from constant multi-tasking and gently push them to dare to stretch their limits. This will be a paradigm shift for your managers as well. The pay-off will be amazing creative solutions, completed in intense Flows, and employees who LOVE their jobs and your company.

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Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
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Succession planning lessons learned from Longhorns

For UT football fans, Thursday night was a night of intense, fluctuating emotions. They sank to utter dismay when legendary quarterback Colt McCoy from the Longhorns injured his shoulder in the very beginning of the game. This was followed by a mixture of disbelief, frustration and pity as the rookie back-up quarterback Garrett Gilbert had to step in with barely any experience on the college fields. It turned into hope and pride as this youngster gained his own confidence and eventually the confidence of his team mates, and almost led his team to where they needed to be. It wasn’t enough, but it was close. The bottom line was that the Longhorns lost because they were not prepared to play without their number one quarterback.

The sports analysis that followed after the game has highlighted one area that is relevant for succession planning: The coach should have exposed young Gilbert to more play time to prepare him for the moment nobody had anticipated. He rose to the occasion quite well, but everyone agrees that more experience could have helped him gain his bearings faster in the brightest spotlights in this all-or-nothing game.

The same applies in business. Companies have their quarterbacks in key roles that truly determine their market position. Yet, these players are just as vulnerable not just to physical threats, but also to personal situations and allure from the competitors. Is your back-up quarterback ready, if your number one player suddenly steps down? Gilbert had practiced in scrimmages with his team, which might correspond to role play training or action learning with the corporate university. He had a stellar record from high school fields, perhaps the same as a good resume from a smaller company. However, the only way to truly prepare someone for the big game is to let them play the game.

Take a look at your key job roles. Which ones are your quarterback positions? Are you grooming a back-up player to fill the shoes in a few years? Are they getting enough play time on the big field? They need the real challenges where the heart rises to the throat but they know they can do it. With your confidence and with your support they will be ready.

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Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
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