Updating the global scorecard

Almost all organizations today are implementing a variety of change programs, each with its own champions, gurus, and consultants, and each competing for senior executives’ time, energy, and resources.

Managers find it difficult to integrate those diverse initiatives to achieve their strategic goals—a situation that leads to frequent disappointments with the programs’ results.

The scorecard wasn’t a replacement for financial measures; it was their complement.

Recently, we have seen some companies move beyond our early vision for the scorecard to discover its value as the cornerstone of a new strategic management system.

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The tool was not intended to be a replacement for financial measures but rather a complement—and that’s just how most companies treated it.

The second process——lets managers communicate their strategy up and down the organization and link it to departmental and individual objectives.

Traditionally, departments are evaluated by their financial performance, and individual incentives are tied to short-term financial goals.

As the high-level scorecard cascades down to individual business units, overarching strategic objectives and measures are translated into objectives and measures appropriate to each particular group.

Tying these targets to individual performance and compensation systems yields “personal scorecards.” Thus, individual employees understand how their own productivity supports the overall strategy.

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