Inspiration Coaching

An earlier blog discussed the benefits of the Balanced Scorecard and how it can help reporting become an essential management tool within business. It does this by measuring the “important stuff”. However, before the important stuff can be measured it needs to be discovered. This blog discusses a discovery process.

What is the important stuff for a business? A good starting point to determine this is to confirm what the business plans to achieve. Joshua Owens, a leading Australian Corporate Strategist and Speaker, believes that a tool kit that he calls the Holistic Trinity can help identify the important objectives of the business. The trinity is values, vision and mission. Now I have known these three to have a bad reputation with employees especially in large businesses. This may be due to the actions of organization and the people within the organization not being in alignment with the words of the values, vision and mission. To be most effective the trinity need to be developed in a way that is true to the business and motivating for all stakeholders including and most importantly the employee team. Once developed they need to be kept “alive” in the business by talking, walking and acknowledging the trinity (especially the values). Let’s have a look at each element of the trinity.

Values

Values are what is important or valuable to the organization. They express the ethics and principles of the business and provide a guideline on behavioral expectations. To do this they can’t be one word catch alls such as “safety” or “quality” nor can they be statements that sound great but give no real indication of how the business is going to operate such as “people are our greatest resource”.

A good example of values that provide a guide for behaviour is the UK’s Northern Gas Networks’ values.

• Motivating our partners to continuously improve performance for their own benefit, and ours;
• Treating customers as we would wish to be treated;
• Seeking opportunities for growth and productivity improvements;
• Maintaining high standards of corporate governance;

A good test to determine if your values are behavioural based (i.e. indicate how people in the business will behave) is to put the words “We will” in front of the values and see if the statement makes sense. Note that in the above Northern Gas Networks’ values the test works if the “ing” is deleted from the first word of each value.

Vision

The more detail the better the vision.

Many people in the field of sport use visualization to help them achieve their goals. Michael Lynagh, the former Australian rugby union captain called visualization mental rehearsal. His pre match routine would include a mental rehearsal of him kicking the ball. It would include the referee giving the penalty, the position on the field, the people around him, setting up the ball, walking back and picturing where the ball would go and then the process of kicking. He found the mental rehearsal was better the more senses that he used.

The challenge in business where there is more than one person involved is to have a vision that genuinely excites the employee team. This is unlikely to be achieved on one or two sentences. The vision’s aim is to excite people into action towards a future that they can “see”.

Mission

Unlike the Vision the Mission should be short and inspiring. For example would you prefer to work for a bank who’s mission was:

“To provide a service for the public and the business community whereby they can safely deposit their cash and take out loans”

Or one’s whose mission was:

“To provide peace of mind and a means to achieve life goals”

If you want assistance in getting your business ideas or “important stuff” implemented please contact inspiration coaching at inquire@inspirationcoaching.com.au.

In the May edition of the Management Today magazine there is an interview with Paul Cave. Paul is the entrepreneur who established the Sydney Harbour Bridge Climb business. In it he says that “So many good ideas fail because the idea itself may be great but the delivery is not”. A Balanced Scorecard will not by itself ensure that a great idea is realized but what it will do is keep the idea implementer’s thoughts focused on what is important in achieving success.

The Balanced Scorecard was devised by Robert Kaplan and David Norton in the early nineties. It began with the premise that an exclusive reliance on the financial indicators such as profit and loss was causing the managers and owners of businesses to do the wrong things. Subsequently it was seen as a tool to measure the success of implementing strategies or implementing good ideas. The financial indicators are great at telling us how a business has performed in the past what the Balanced Scorecard does is supplement this with measures that indicate how the business will perform in the future.

These non financial measures will depend on each business’s objectives but they could be grouped under some or all of the following headings.

• Operations (What the business does)
• Stakeholders (e.g. owners and customers)
• People (Knowledge and Learning) (the people within the business)
• License to operate (government, community relations)
• Growth (expansions, acquisitions, mergers)
• Financial

At its most effective the Balance Scorecard is a one page document and each of the measures should be linked to the strategy of the business. For example a business that has a market strategy of retaining and developing it’s customer base by providing superior post sales service needs to measure the initiatives that are in place for delivering that superior post sales service and how that has been successful in both retaining and finding new customers.

The Balanced Scorecard is a powerful reporting tool that measures the success of implementing the good business ideas. It has the potential to flag business issues months before they are reflected in the financial results. It does this by the simple principle of focusing on what the business is doing now to have financial success in the future.

If you would like to know more about this tool Robert Kaplan and David Norton lead an on line community at www.bscol.com. Alternatively contact inspiration coaching at inquire@inspirationcoaching.com.au.