insights on visionary strategic planning for non profit / non governmental organizations &...

Insights on Balanced Scorecard-BasedStrategic Planning for Nonprofit / Nongovernmental Organizations

and Government Agencies

Arturo J. Bencosme-Dávila, [email protected]

Strategic & Systems Thinking Consultant and

Affiliate Faculty, Global Nonprofit Leadership Department at Regis University

mailto:[email protected]

Arturo J. Bencosme, PhD 2

Introduction

NON PROFIT / NON GOVERNMENTAL ORGANIZATIONS AND GOVERNMENT AGENCIES:

• Typically aim at community interests, social change and the common good:

Philanthropic / social wellbeing motivation is their prime driver: Need to emphasize a vision that refers to the greatest good.

The uncertainty and complexity of the organization’s general environment require significant attention.: should utilize scenario planning.

Navigate in a complex environment beyond market forces: need to clarify the challenge and the uncertainty involved.

• Are characterized by being purpose & mission oriented: finance everything plays a utilitarian role when crafting strategy.

• Demand comprehensive guidance for the entire organization: should consider multiple perspectives to attain the necessary alignment.


Purpose & Mission

Values

Visionary Objectives

Vision

Strategic Themes & Strategy Maps

Balanced Scorecard

Cascading

Initiatives

Results

Introduction(Cont.)

BALANCED SCORECARD-BASED STRATEGIC PLANNING CONSISTS OF AN INTEGRATED PROCESS:IT GOES FROM ESTABLISHING A SENSE OF DIRECTION TO MONITORING RESULTS

AND HAS STRATEGY DEPLOYMENT AT ITS CENTER

The “WHY” and the Social Proposition

Core Ethical Beliefs

Aspired Long Term Results

Picture with Words of the Aspired Future

Strategy Pillars and Key Areas of Action

Strategy Indicators, Measures & Targets

Promoting Involvement via Cooperation

Projects & activities

Monitoring & feedback


BALANCED SCORECARD-BASED STRATEGIC PLANNING: Whole organization enrolment in and alignment with strategy

Visionary: Oriented toward the organization’s guiding ideas.

Challenge Detecting: Surfaces the challenges ahead for the organization.

Strategy Focused: Clarifies strategic thrusts to go past the challenges.

Holistic: Addresses multiple perspectives on the organization.

Strategy Visualizer: Deploys visually vision-strategy connections and the logic to enable and implement the strategy.

Leadership Distributor: Stewards widespread enrolment via cascading throughout all organization levels down to the individual.

Improvable: Sets measurements for determining progress and for improving on strategic thinking & implementation.

Introduction(Cont.)


There are two ways of being lost :

Not knowing where we are going…

And not knowing where we are…!

S E T T I N G T H E C O U R S E

?

?


WHERE WE ARE GOING:

Establishing the Organization’s Aspirationthrough

the Governing Ideas


WHERE WE ARE GOING (Cont.)


Governing Ideas are the fundamental statements of what matters to the organization specifically, the future it aspires to build. They are summarized in a visionary narrative.

are deep-rooted ethical beliefs with which the organization identifies itself.

describes the products or services offered as the specific way of manifesting the purpose.

to be achieved in accomplishing the organization’s mission.

is the larger impact sought and why society values the

organization.

PURPOSE



T h e o r g a n i z a ti o n ’s k e y s t a k e h o l d e r s a r e i n d i v i d u a l s , g r o u p s a n d o r g a n i z a ti o n s ,

w i t h i n a n d w i t h o u t t h e o r g a n i z a ti o n , w h o s e s a ti s f a c ti o n d e t e r m i n e i t s s u c c e s s

o r t h a t t h e o r g a n i z a ti o n n e e d s t o c o n s i d e rt o a d v a n c e t o w a r d i t s s u c c e s s .

SETTING THE VISIONARY GOALS AROUND THE ORGANIZATION’S KEY STAKEHOLDERS’ ATTRIBUTES OF SATISFACTION

EXPANDS THE ENVISIONING PROCESS



For each stakeholder identified:

What are its satisfaction attributes?

What is its current stand relative to the organization:-support, oposition, collaboration, interdependence, indiference?

What are its strengths and weaknesses, and what opportunities and threats does it offer to the organization?

What is its connection to other stakeholdersand how does that connection operate?

How much power does it have over the organization, and what is the source of such power?

How much interest does it have in the organization and why?

STAKEHOLDER CHARACTERIZATION IS A MATTER OF ORGANIZATIONAL INTELLIGENCE



Influence Power over the organization: Capacity to affect the organization’s success significantly, either directly or indirectly: the media, providers, politicians, state government…

Degree of Interest in the organization: The magnitude of the attention (knowledge / awareness)

or perception (favorable / against) that it has on the organization.

TWO DIMENSIONS TO INCLUDE IN THE STAKEHOLDER ANALYSIS: INFLUENCE POWER AND DEGREE OF INTEREST



ASSESSING THE DIMENSION OF STAKEHOLDER POWER OVER THE ORGANIZATION

If the organization were to pursue its goals and strategies, could/would this stakeholder exert its influence over it?

– Analysis relates to particular goals / strategies– Implementation of some strategies may be within

the approved discretion of a certain stakeholder.– Some stakeholders may not want to exercise their power



ASSESSING THE DIMENSION OF STAKEHOLDER INTEREST IN DAODAS

If the organization were to pursue its goals and strategies, could/would that ignite / fuel this stakeholder’s interest in it?

– Analysis relates to particular goals and strategies– Is the stakeholder’s interest against or for the organization? – How high is the organization in this stakeholder’s priorities?



SUMMARIZING STAKEHOLDER CHARACTERIZATION BASED ON POWER & INTERESTIn

fluen

ce P

ower

(Imag

e, C

onvi

ncin

g)

Degree of Interest(Enablers)

Low High

Low

High Posible Movers Key Players

Less Important Potential Supports



WHAT TO DO AS A RESULT FROM THE STAKEHOLDER ANALYSISIn

fluen

ce P

ower

(Imag

e, C

onvi

ncin

g)


Low High

Low

High

Posible Movers: Tend to their

requirements, keep them satisfied.

Key Players:Special attention,

seek alliances & collaboration.

Less Important:Minimal efforts.

Potential Supports:Show consideration, keep them informed



STAKEHOLDER INVOLVEMENT MOVESIn

fluen

ce P

ower

(Imag

e, C

onvi

ncin

g)


Low High

Low

High

Posible Movers: Involve and consult with them, strive to increase

their interest

Key Players:Focus on them, seek to involve them in

major decisions,i.e., the organization’s

vision.

Less Important:Keep them generally

informed, strive to increase their interest.

Potential Supports:Keep them informed,

involve them in low risk matters



GENERAL CONSIDERATIONSFOR STAKEHOLDER MANAGEMENT & INVOLVEMENT

• Orchestrate stakeholder management & involvement efforts following the results from the stakeholder analysis.

• Incorporate the most important stakeholders (key players, possible movers and potential supports) in the organization’s vision & strategy in an explicit manner.

• Maintain current a stakeholder data base, monitoring their evolving characterization.

• Aim at establishing win-win agreements with the key players.

• Develop, implement and keep current an institutional communications plan emphasizing the specifics for each stakeholder.



KEY STAKEHOLDER

1

KEY STAKEHOLDER

2

KEY STAKEHOLDER

3

KEY STAKEHOLDER

4

KEY STAKEHOLDER

5

KEY STAKEHOLDER

N…

DRAWING THE ORGANIZATION’S KEY STAKEHOLDER BIG PICTURE…

THE ORGANIZATION

SPECIFY POWER AND INTEREST INTERCONNECTIONS



KEY STAKEHOLDER

1

KEY STAKEHOLDER

2

KEY STAKEHOLDER

3

KEY STAKEHOLDER

4

KEY STAKEHOLDER

5

KEY STAKEHOLDER

N…

… AND UNDERSTANDING THE BALANCE TO STRIVE FOR AMONG THE KEY STAKEHOLDERS

THE ORGANIZATION



BENEFICIARIES

FUNDERS / DONORS

STAFF

VOLUNTEERS

GOVERNMENTREGULATORS

SOCIAL MEDIA

MANY ORGANIZATIONS WOULD CONSIDER THE FOLLOWING STAKEHOLDERS:

THE ORGANIZATION



A shared vision of the organization’s successful future will bring about the alignment needed to accomplish its mission.

Visions take the form of a detailed, vivid narrative

-a portrait painted with words-

of what will look like and how will feel

having attained the overarching goals of the organization.

The Visionary Narrative Weaves Everything Together



There are two alternative routes to develop a visionary narrative:

• Start with the purpose, mission and values, establish the goals, and then write the narrative.

• Start with a narrative which incorporates the values, purpose and mission, and describes the aspired future and then, intuitively extract the goals from it.

What is important is to be able to inspire for achieving worthwhile goals totally congruent with the underlying essence of the organization: its values, purpose and mission.

Writing Visionary Narratives



As we stand on our future, we see ourselves energized and proud as an ever growing number of graduates from our trainings surround us. They show gratitude and support having transformed themselves into the true human beings they are, and are embodying their full potential. As staff, we enjoy a profound sense of purpose and connection among ourselves and to our volunteers, sharing a worthwhile endeavor in caring, truth, endurance, effectiveness and honesty. Our funders and donors are confident on the value of the service that is provided by us to those who participate in our trainings thanks to their generosity and continued support. Our financial sustainability is partly provided by them and from the proceeds from our ever growing training participants. And we strive to remain at the cutting edge of like skill trainings, while continuing to build a community of graduates who are our best ambassadors to society in pursuing our endeavor of contributing to a better world.

Example: Visionary Narrative in a Non Profit OrganizationDedicated to Provide Life Skills for Personal Growth



WHERE WE ARE:

Performing the Strategic Analysis to AssessCurrent Reality and the Challenges Ahead

¿


VISION

REALITY CHECK

HOW FAR ARE WE?

WHERE WE ARE (Cont.)

The strategic analysis starts by determining the GAP

between the aspired state of the organization -as specified in the vision-and its current state relative to that vision.



1) A future oriented view with the visionary goals being the focus.

2) Multiple organizational perspectives for formulating comprehensive, organization-wide strategies.

FIN

ANCE

BENEFICIARIES

SOCIETY

PROCESSES LEARNING & GROWTH

PROGRAMS

The “SWOT” analysis assesses the organization’s potential for moving toward its vision: a scan for the organization’s

Strengths, Weaknesses, Opportunities and Threats.

Within the balanced scorecard approach, the SWOT analysis encompasses two dimensions:


The SWOT Analysis’s First Dimension:

Is driven by questions about current reality with respect to attaining the organization’s future vision amidst complexities posed by the environment of the organization’s sector.

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

What are the internal advantages?

What can it do better than any other organization?

What unique resources can it draw upon?

What could the organization improve on, and what should it avoid?

What internal factors hamper the organization in materializing its vision?

What external obstacles could stand in the way to success?

Are there any funding / fiscal issues?

What unfavorable trends are emerging?

What are the significant opportunities within the organization’s environment for achieving success?

What favorable trends are surging?



Uncertainty needs to be included in the SWOT analysis when looking into the external factors that is,

the uncertainty surrounding the threats and opportunities.

“In the future, instead of striving to be right at a high cost,

it will be more appropriate to be flexibleand plural at a lower cost.

If you cannot accurately predict the future then

you must flexibly be prepared to deal with various possible futures.”

~ Edward de Bono

An effective way to handle the uncertainty in threats and opportunities is via scenarios about the future:

“Should this scenario materialize, then what would be the right strategy to pursue?”



FUTURE SCENARIO

“Z”

FUTURE SCENARIO

”X”

FUTURE SCENARIO

“W”

FUTURE SCENARIO

“Y”

CURRENTKNOWNS & UNKNOWNS ABOUT THE

FUTURE

“…Scenarios are stories about the way the world might turn out tomorrow, stories that can help us recognize and adapt to changing aspects of our present environment…”

“…To act with confidence, one must be willing to look ahead and consider uncertainties:

“What challenges could the world present to me? How might others react to my actions?”

Peter Schwartz, The Art of the Long View

WHAT ARE “SCENARIOS”?



HOW STRATEGIC SCENARIOS ARE CONSTRUCTED

1. Focus on the key organizational choices: the visionary goals.

3. Identify and analyze the key environment driving forces, and identify uncertainties.

4. Establish scenario logics: the organizing paradigms or theories around which the scenarios will be structured.

5. Select and elaborate the 3-4 most significant scenarios by describing explicitly their plots.

6.Interpret the scenarios: strategic Implications in terms of threats and opportunities.

2. Specify key factors to know about the future to achieve the visionary goals.

Organization’s Overarching

Choices

Key factors about the future needed for strategy crafting

Scenario Logics

Strategy implications

Environmental factors &

trends

SCENARIOS

7. Qualify / Redefine the key factors about the future needed for strategy crafting.



BOTH THE ORGANIZATION’S WORKING AND CONTEXTUAL ENVIRONMENTS OUGHT TO BE CONSIDERED.

WORKING ENVIRONMENT DRIVING FORCES:

BeneficiariesVolunteersDonors/FundersCompetitorsPartnersRegulatorsCommunities

CONTEXTUAL ENVIRONMENT DRIVING FORCES:

EconomicPoliticalSocialCulturalGeographical

The most uncertain and therefore, the most relevant to scenario construction usually is the contextual environment.



Scenario logics are the organizing principles around which the scenarios’ plots are structured: the “theories of the way the world might work" along each of the axes of uncertainty.

1. Identify general, broad, driving forces, applicable to all scenarios i.e.., Government Orientation, Economic Strength, Immigration Reform Progress.

2. Identify trends and combine them to get a series of scenarios

3. Select those which are most significant, naming then meaningfully.

Social Welfare Oriented

Government

Strong Economy

Weak Economy

Free Market Oriented

GovernmentIm

migration Reform

Stalls

“Locomotive Style”

“Navigating in Difficult Waters”

“High Expectations of

the 3rd Kind”

“Mission Almost

Impossible”

Immigration Reform

AdvancesEXAMPLE



SWOT Analysis’ Second Dimension:

Supports the balanced scorecard-based strategy crafting process by adopting 4 perspectives on the organization namely,

Organization Beneficiaries, the Community and Society at Large.

Donor and Financial Accountability & Sustainability.

Agility & Efficacy in each of the organization’s key processes.

Organizational Dynamics: Learning & Growth (information, human & organizational capital).

FIN

ANCE

BENEFICIARIES

SOCIETY

PROCESSESLEARNING & GROWTH



Within the balanced scorecard approach, a complete SWOT analysis encompasses the strengths, weaknesses, opportunities and threats as seen from the 4 perspectives and takes the form of a “bookshelf” that organizes all aspects of the analysis.



The next step in the strategic analysis is the “So What?” stage:

…what are the challenges that the organization faces?

The challenges are of two kinds:

1) Challenges to transform the adversities (weaknesses & threats) into possibilities.

2) Challenges to make the most of the advantages: strengths & opportunities.

Match Strengths

to the Opportunities

Transform

Adversities into

Possibilities


¿


The logic that articulates the means to overcome the challengesthat were determined in the SWOT analysis

is at the core of strategic thinking.

CRAFTING THE STRATEGY


How to go past the challenges in order to attain the visionary objectives under a variety of scenarios about the future?

The answer is:

through crafting and implementing an effective, robust strategy.

S T R A T E G Y

VISION

YOU ARE

HERE

CRAFTING THE STRATEGY (Cont.)



WHAT IS STRATEGY ?

Within the balanced scorecard method, STRATEGY consists of

a set of mutually supporting Strategic Themes

(a.k.a. ¨Strategic Thrusts”)

The strategic themes are the assumptions (hypothesis) about how to drive the organization toward its visionary goalsunder the most significant scenarios about the future.

Usually there will be one strategic theme for each visionary objective expressing what the leadership believes the organization should adopt as a rationale to materialize each such objective.


In order to attain these VISONARY GOALS:

The leaders believe that these STRATEGIC THEMESshould be adopted:

Beneficiaries achieve substantial personal

transformation.

Cultivate the intent and the skills to transform lives among the organization’s staff and volunteers.

Financial Stability & Sustainability.

Impel process improvementwith emphasis on cost efficiency and financial

accountability.

The following are examples of visionary objectives and their corresponding strategic themes in a non profit organization dedicated to provide life skills for personal growth.



OPERATIONALIZING STRATEGY

The next task consists of identifying the key areas of action which will operationalize the set of strategic themes that is, the strategy.

Organization Beneficiaries, community & Society at Large; Financial Efficiency, Accountability & Transparency; Agility & Efficacy in each of the Organization’s Processes; and Organizational Learning & Growth.

The key areas of action comprise the four balanced scorecard perspectives:




FINANCIALHow should we be perceived by our donors and other stakeholders financially wise?

• Transparent & accountable?• Cost efficient?

BENEFICIARIES & COMMUNITYHow should we be perceived by our beneficiaries and society at large?

• What services & products?• What population segments?• What impacts?

INTERNAL PROCESSESHow should our work flow?

• With agility?• With reliability?• Error-free?

ORGANIZATIONAL DYNAMICSHow can we excel at learning collectively to become an intelligent, progressive and cohesive organization with a strong climate of oneness?

THE FOUR PERSPECTIVES DEPICT FOUR DISTINC BUT INTERRELATED STANCES ON THE ORGANIZATION


THE KEY AREAS OF ACTION ARE DISPLAYED THROUGH ”STRATEGY MAPS”:

FINANCIAL

CUSTOMER

INTERNAL PROCESSES

ORGANIZATIONAL DYNAMICS

While For-Profit organizations are finance-driven,

FINANCIALBENEFICIARIES & COMMUNITY

INTERNAL PROCESSES

ORGANIZATIONAL DYNAMICS

Nonprofit / Nongovernmental organizations and government agenciesare mission-driven and financially accountable.

The “strategy maps” depict the causal relationships among the areas of action that implement the strategic themes.

Naturally, the strategy maps of nonprofit / nongovernmental organizations and government agencies are different from those of for-profit organizations.



Enhanced Quality of the Trainings

Offered

Volunteer, Participant & Graduate Relationship

Management

Participants Complete Trainings Successfully

Organizational Learning Focused on Adult

Learning

Staff & Volunteers Align with the Values, Purpose

Mission & Vision

Beneficiaries & Community

Financial (N.A.)

Internal Processes

Organizational Dynamics

STRATEGY MAP EXAMPLE 1ORGANIZATION DEDICATED TO PROVIDE LIFE SKILLS FOR PERSONAL GROWTH

To have the beneficiaries achieve a substantial personal transformation, (Visionary Objective)cultivate among the staff and volunteers commitment and skills to transform lives. (Strategic Theme).

This strategic theme will be implemented through the following key areas of action: Build alignment with the organization’s guiding ideas. Collectively learn adult learning aimed at personal growth. Improve the quality of the trainings being offered. Advance volunteer & graduate involvement processes. Support the participants in successfully completing their trainings.



Improve the Efficiency in Marketing and in Delivering Trainings

Donor & Graduate Relationship Management

Continuity in Training Offering

Staff & Volunteers Align with the Values, Purpose Mission & Vision

Beneficiaries & Community

Financial

Internal Processes

Organizational Dynamics

Donor Continuity, Financial Equilibrium,

Financial Accountability

Enhanced Cost Accounting

STRATEGY MAP EXAMPLE 2

ORGANIZATION DEDICATED TO PROVIDE LIFE SKILLS FOR PERSONAL GROWTH

In order to achieve financial stability & sustainability, (Visionary Objective)Articulate process improvement with emphasis on cost efficiency and financial accountability. (Strategic Theme).

This strategic theme will be implemented through the following key areas of action: Build alignment with the organization’s governing ideas. Improve the cost efficiency in the trainings being offered and in marketing efforts. Advance donor & graduate involvement processes. Improve cost accounting and fund allocation. Strengthen relations with donors & graduates. Ensure continuity in training offering.



SUPERIMPOSING THE CAUSAL RELATIONSHIPS FOR THE THEMESGENERATES AN OVERARCHING STRATEGY MAP



SUCH A COMPACT VISUAL REPRESENTATION OF THE ORGANIZATION’S STRATEGIC THINKINGCAN BE USEFUL AND POWERFUL:

The organization’s leaders can make it availableto all the staff members and volunteers as

a “pocket strategy guide” to remind everyone of what the organizations aspires to be

and the path that has been chosen - its strategy.



INDICATORS & MEASURES FOR STRATEGY EXECUTION

https://www2.bc.edu/~harrinb/MB802.htm


Strategic management requires measuring progress toward the vision

and quantitatively supporting strategic decision making

“What you can measure you can manage.”

INDICATORS & MEASURES FOR STRATEGY EXECUTION (Cont.)


Measurements and targets will empower the organization to monitor its progress toward its vision and to gauge feedback for improvementin the strategy being implemented.



Visionary Indicators: depict the organization’s current reality in terms of the degree to which the organization is attaining its visionary objectives.

Strategic Key Performance Indicators: depict the extent to which the key areas

of action which implement the strategy are being undertaken.

TWO SETS OF INDICATORS



The Visionary Objective Indicators: Express the degree to which the organization is actually making progress in materializing its visionary objectives.

Provide an objective way to verify the validity of the assumptions made when developing the strategy. Were the strategic themes or thrusts the right ones?

Help all levels of the organization strive for alignment with the vision.



The Key Strategic Indicators:

Reflect the degree to which the key areas of action are being undertaken which in turn, signal that the strategy is actually being implemented.

There might be more than one key strategic indicator for each area of action.

The system of key strategic indicators for the areas of action in the four perspectives will bring to life the balanced scorcard for the organization.

They will help all levels of the organization focus on what matters strategically.



The visionary objective indicators and the key strategic indicators together with the causal relationships among them

can be portrayed in a dashboard: a Strategic Decision Support System.



Strategy (the set of strategic thrusts or themes) is just a hypothesis about how to move effectively toward the organization vision.

As in science, hypothesis are stated, put to the test and either confirmed or changed.

Attainment of the


(Visionary Objective Indicators)

Degree of Strategy Implementation(Key Strategic Indicators)

Low High

Low

High

!Moving Ahead in Spite of

Little or no StrategyImplementation - Strategy and/ or

Implementation Need to Change

Moving Ahead as Expected

~ Strategy is Validated ~

?Uncertainty Reigns /Organization Adrift

XStrategy Needs to Change



“Logic will get you from A to B. Imagination will take you everywhere”

“Not everything that counts can be counted, And not everything that can be counted counts”

“The only real valuable thing is intuition”

“Imagination is more important than knowledge”

The usefulness of measurements for strategic decision making determines the value of the information provided by those measurements.

For all this potential value however, quantitative and logical information should be seen only as a means to support intuition and imagination.



CASCADING THE BALANCED SCORECARD TO INVOLVE THE ENTIRE ORGANIZATION


ALIGNING THE ORGANIZATION WITH STRATEGY

The strategic alignment process consists of cascading it by utilizing the highest-level scorecard as a template

for constructing the scorecards for the other levels top to bottom throughout the entire organization and as a result,

every unit’s goals will be directed to implementing the organization’s strategy.

Cascading the balanced scorecard provides a means of fulfillingthe will to meaning & contribution

on the part of everyone within the organization.

CASCADING THE BALANCED SCORECARD TO INVOLVE THE ENTIRE ORGANIZATION (Cont.)


For successful cascading, everyone in the organization must embody

the organization’s guiding ideas (mission, values, visionary narrative), share the visionary objectives and their corresponding strategic themes,

and understand the objectives and measures in the highest-level scorecard.

From that point downward through the organization, the underlying drive will be one of cooperation.


THE BEGINNING OF THE CASCADE

STRIVING TO SUPPORTT H E N E X T L E V E L U P

Each organizational level needs to find the answers to the question:

“How can we cooperate at our level to help the organization achieve its goals?”


THE CASCADING PROCESS IS DRIVEN BY A SENSE OF COOPERATION

Successive cascading to a particular organizational level begins by looking at the next upward level scorecard, and identifying the objectives and measures within it with which this level can cooperate.

The scorecard at any level will align with the next upward level’s scorecard by cooperating through the same, or a sub-set or even different, yet congruent objectives, or through objectives in the same or in other perspectives.


In the end, all the objectives at highest level must be supported by the cascade of scorecards throughout the organization.



SEVERAL BALANCED SCORECARD CASCADING PATTERNS ARE AVAILABLE

Identical to the Next Upper LevelThe objective is the same as in the next upper level.

Contributory to the Next Upper LevelAn objective in the cascaded scorecard that is differentfrom those in the next upper level still contributes to an objective in the next upper level.

Unique to the LevelAn objective in the cascaded scorecard that is exclusive to the level.

Shared between Several Cascaded LevelsAn objective in the cascaded scorecard that is jointly owned by more than one scorecard.

Next Upper Level

Cascaded Level


Units such as human resources, accounting, finance, information technology and so forthprovide specialized services to the other units.

Balanced scorecard for shared service units ensurethat the services they provide support the units they serve in achieving their strategic objectives.

The shared service units will determinewith which strategic objectives in the units they servethey can most directly cooperate and based on that, develop their own strategic objectives.

The highest-level scorecard in the organization may also contain objectives with which the shared service units can directly cooperate.


CONSTRUCTING THE SHARED SERVICE UNIT BALANCED SCORECARDS



TOP ORGANIZATION LEVEL

OPERATIONAL UNIT 1

SHARED SERVICE UNITS

OPERATIONAL UNIT 2

ALL THE ORGANIZATION’S LEVELS AND UNITS ARE ENCOMPASSED IN THE CASCADING OF THE STRATEGIC OBJECTIVE GOALS

Each unit is thus directed to cooperate in implementing the organization’s strategy by deploying their corresponding unit level goals and objectives to support those of the unit to which they report (operational units) or to which they serve (shared service units).


MAKING THE BALANCED SCORECARD PERSONAL Cascading the Balanced Scorecard to the personal level can enhance significantly the employee, manager or executive performance appraisal process.

Personal Balanced Scorecards:

• Build awareness of, and commitment to the organization’s strategy and encourage comprehension of cascaded scorecards since that understanding is a pre-requisite to developing their own.

• Clarify personal – organizational strategy connections as it depicts the impacts from individual’s decisions and actions on the organization’s overall results.

• Motivate the individual for goal-setting processes by underscoring the importance of each one to the organization’s success.



Key elements of incentive compensation and capacity buildingshould connect to the balanced scorecard strategic alignment process:− In the personal scorecard construction process, the individual is the protagonist

albeit mentoring and coaching might be in order.

− If the compensation is performance-related, the individual establishes the appropriate weights for each measure and each perspective.

− Last but not least, a personal, individualized development plan is constructed in connection with the goals established on individual scorecard.

SIGNIFICANCE OF CONSTRUCTING PERSONAL BALANCED SCORECARDS


The creation of personal scorecards completes the cascading from executives and managers to the line workers.


Monitoring the cascade supports feedback and learning:

Verifying that the measures are complete and timely, the targets are stretching yet realistic, and all units are working cooperatively.

Verifying that alignment is consistent

throughout the organization: The strategic planning team reviews

all the cascaded scorecards and work with their counterpart teams in each unit to ensure consistency and completeness.

Organization-wide learning and improvement is done through staff forums and town halls, and specially, through communities of practice.

Individuals are encouraged to invite their peers to help improve their scorecards.


REVIEWING AND EVALUATING CASCADED BALANCED SCORECARDS

CASCADING THE BALANCED

SCORECARD

STRATEGY

EVALUATING THE BALANCED

SCORECARDCASCADE

PERFORMANCE MEASUREMENT

PurposeValues Mission Vision


CHECKING LINKAGES, TARGETS AND COMPLETENESS:

• Linkages to related scorecards. Each scorecard should contain objectives that contribute to the corresponding scorecard in the next upper level.

• Appropriate targets. Only targets that are stretching, specific, realistic and achievable should be established.

• Coverage of all key strategic objectives. All of highest-level strategic objectives should be cooperated with throughout the organization.



IMPLEMENTING THE STRATEGY:

MAKING STRATEGY HAPPENTHROUGH STRATEGIC INITIATIVES


Executing the strategy usually involves leading and managing organizational change: enrolling all organization´s individualsin a collective construction effort.

In particular, the focus is on:

1) Implementing the initiatives that the strategy prescribes: bringing to life the key strategic areas of action.

2) Cascading the balanced scorecard throughout the organization: ensuring that everyone in the organization is responsible for implementing the strategy.

IMPLEMENTING THE STRATEGY: MAKING IT HAPPEN (Cont.)

STRATEGY EXECUTION ≅ CHANGE MANAGEMENT


ORGANIZATIONAL DYNAMICS PERSPECTIVEInitiatives of particular interest to enhance motivation & alignment: Governing idea collective embodiment; dialogue & systems thinking development programs.

INTERNAL PROCESS PERSPECTIVEInitiatives to improve process effectiveness, efficiency, agility and reliability: process redesign, stakeholder relationship management expansion.

FINANCIAL PERSPECTIVEInitiatives aimed at financial performance and sustainability: improving cost accounting & transparency, developing donation continuity.

BENEFICIARY AND COMMUNITY PERSPECTIVEInitiatives to enhance the organization’s mission: personal development seminar innovation & offering, advocacy & support.

Example: Translating the strategic areas of action into initiativesin an organization dedicated to provide life skills for personal growth.

IMPLEMENTING THE STRATEGY: MAKING IT HAPPEN(Cont.)


WHERE THE TREAD TOUCHES THE GROUND

A chart can be built that displays the visionary objectives, their strategic themes, the strategic enablers for each strategic theme and the initiatives that enliven the enablers. Each of them with the corresponding measurements and targets.


Visionary Objective Indicators:

Current Measures

Visionary Objective Indicators:

Goals

Strategic Themes

Strategic Areas of Action:

Strategic Objectives

Key Strategic Indicator: Current

Measures

Key Strategic Indicator:

GoalsInitiatives

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Those initiatives might include continuous activities (i.e., programs such as continuous quality improvement)

and projects (such as key process redesigns).

KEY

AREA

of

ACTI

ON

X

PROJECT X P1

CONTINUOUS ACTIVITY X A 1



THE KEY AREAS OF ACTION ENCOMPASS INITIATIVES NEEDED TO ATTAIN THEIR CORRESPONDING STRATEGIC OBJECTIVES.


Purpose & Mission

Values


Vision

Strategic Themes & Strategy Maps

Balanced Scorecard

Cascading

Initiatives

Results

The results obtained from the initiativesstand at the final stageof the balanced scorecard-basedstrategic planning approach which in turn,is a never ending process…


RESULTS ARE FEED BACK TO PROGRESS STRATEGIC ORGANIZATIONAL LEARNING


Planning is a team learning effort and a continuous, never ending process.

Every time, the process might cycle through all the stages.

It is at its best when it is specifically aimedat expanding the capacity for clarifying what the organization aspires to be

and the means to materialize such an aspiration.


In preparing for battle, I have always foundthat plans are uselessbut planning is indispensable.

General Dwight D. Eisenhower

insights on visionary strategic planning for non profit / non governmental organizations &...

Government & Nonprofit