Balanced Scorecards and Operational Dashboards with Microsoft Excel, 2nd Edition

Chapter 3

Preparing to Build Your Balanced Scorecard

If I had six hours to chop down a tree, I’d spend the first hour sharpening the axe.

—Abraham Lincoln

The Balanced Scorecard is how you execute your strategic plan. The level of your organization’s success depends on how well you implement it. For good implementation, you need a good foundation, and that foundation depends on both your Balanced Scorecard’s purpose and your levels of planning and commitment.

Why Use a Balanced Scorecard?

You need to know your organization’s purpose for implementing a Balanced Scorecard before you begin developing one. It takes intense, hard work to develop a Balanced Scorecard and make it part of your organization’s culture. If the Balanced Scorecard isn’t driven by the organization’s core purpose, its power to guide your organization will become a lower priority, and people will lose commitment as they face daily crises.

The Balanced Scorecard is not a tool of performance management. It is a tool to translate strategy into action, to remove silos, and to promote a culture of high performance. A lot happens during the development and implementation of a Balanced Scorecard. Extra work is required of executives and managers, the walls between silos are reduced or eliminated, new channels of communication are opened, the value placed on performance changes, and much more.

Organizations don’t change easily. In a cultural version of Newton’s first law, they are bound by their inertia. I’ve seen small ...