BJ#8 Balanced Scorecard

Strategy is the "how" to realize our vision. BJ#6 Strategies talk about what make a good strategy. It must be shaped by our values, pursue with perfection, be about building relationships, communicated with branding, be positive, taking up initiatives, facing up realities & cut losses if necessary, be innovative and even working with competitors wisely.

However, Strategy must be described in a form that is detailed enough to be executable. The above qualities of a Strategy, like, "build intimate long term relationship with customers" is good strategic theme to start from but is not an executable strategy. Firstly, it is unclear. What does intimacy with customers mean? How can you tell whether a relationship is intimate or not. When will you be satisfied with the intimacy of a relationship ? So, to make a Strategy clear, we must be able to measure it. We can tend set a target to show the progress and the expectation that we want.

We would call "Build Intimate Relationship with Customer" as a Strategic Objective. We must then defined the measures, known loosely, as Strategic Drivers(SD) or Critical Success Factors (CSF) or Key Performance Indicators(KPI). One measure could be "repeat-business", "contract renewal rate", etc. It could also defined in rank/phases/steps forms, like 1-open tender bid, 2-invited bid, 3-closed-bid, 4-pre-tender discussion, 5-joint planning.

The strategy is still incomplete. We need to know how to build the intimate relationship. How do we engage the customer so that we can be his 'trusted' supplier'. Some may suggest frequent contacts. We must understand his needs. Others may say we need to have good and innovative value-proposition to help him be effectiveness. This PROCESS of engaging the customers must be documented and the procedure & system put in place. The Job description, known an Strategy Job Role, should be created and is to be filled by a "Sale-Person" who is trained to do the job well. For the Sales-Person to be effective, you may use computer systems (IT Application) to keep track of the past, present and future interactions, deliveries and plans of the customers.

If we have done a good job of knowing customers needs (sometimes thinking ahead of him and show him how his life can be better is important too) and deliver as our promised to him, he may be happy to reward us with orders and payments over a long time, giving the revenues and profits for our business to grow.

The "Stategy Map driven Balanced Scorecard" work of Kaplan & Norton provide a more complete and concise framework of Strategy Execution. Please refer to it for more details.

The key is that for Strategy to be executable, it be measurable, and must address the 4-6 perspectives of financial, customers, processes, learning & growth (HR job spec, IT infra, organization change) and others added employees and environmental perspectives.

Once the details are spelled out, we can tie the objectives to owners giving accountability and to tie them up with person/team rewards & incentives to provide the external motivators.
  • Mt 6:4b your Father who sees in secret will Himself reward you openly.
  • Mt 5:12 "Rejoice and be exceedingly glad, for great is your reward in heaven
  • Mt 16:27 "and then He will reward each according to his works.
We then go on to the execution and subsequent monitoring and review of strategy execution.
When things did not turned up as expected (below targets or above targets), we may need to examine the causes - change the person, the training, process, to job spec, etc and even the strategy itself ( e.g. It could be that developing long-term intimate relationship is not suitable for the types of services, or products or the processes and competence of the company. The company may be better off, due to its existing culture and processes, people, and products or services, to pursue a different kind of strategy. e.g. lost-cost mass customer supplier)

The Benefits of Strategy Map
Strategy Map is a cause and effect linkage of objectives. Following it will result in focus and alignment of execution by all saving time and wastages. It starts with

1. Singleness of Objective:
Mt 6:24 "No one can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon.

2. Address the Key Issue, the King Pin
Mark 3:27 (KJV) No man can enter into a strong man's house, and spoil his goods, except he will first bind the strong man; and then he will spoil his house.

3. Focus by pruning
  • Step 1 make sure there is fruit.
    John 15:2a "Every branch in Me that does not bear fruit He takes away(lift up from the dirts);
  • Step 2 optimization
    John 15:2b and every branch that bears fruit He prunes, that it may bear more fruit.
    a. channel the energy towards the objective - the fruit
    b. cut away non-objective oriented activities - the leaves -good for show but no-value.
4. Get the Priority Right - don't loose Big because of Small things

Mt 5:29 "If your right eye causes you to sin, pluck it out and cast it from you; for it is more profitable for you that one of your members perish, than for your whole body to be cast into hell. Mt 5:30 "And if your right hand causes you to sin, cut it off and cast it from you; for it is more profitable for you that one of your members perish, than for your whole body to be cast into hell.

See also Bible for Business Seminar#8 Resources & Balanced Scorecards

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