How To Launch Your First Balanced Scorecard, Step By Step

We met with Rossana Creo, the assistant vice president of strategic planning at the United Nations Federal Credit Union (UNFCU), as well as Mark Cutler, the engagement manager at Ascendant Strategy Management Group to discuss how, with Mark’s consulting help, UNFCU recently completed a year-long Balanced Scorecard (BSC) creation and launch. Here are their thoughts on UNFCU’s BSC rollout and the steps any organization can take to complete a successful scorecard launch.

Tricia, Senior Consultant at ClearPoint, leverages her 4+ years of performance management experience when working with customers to improve their reporting and strategy execution.

Step #1: Use your current strategy or create one before you get started.

RC: When we started this process, we already had our strategy in place—we’d been executing on our strategic plan for a year. Our consultant (Mark) helped us create a strategy map from there, and then we went through with our measures.

MC: Having a strategy already in place probably gave UNFCU a leg up in this process. The Balanced Scorecard isn’t a strategic plan—it’s a framework for a strategic plan. So any organization can use it, whether they have a strategic plan or not. The scorecard just makes that strategy more manageable.

Step #2: Get buy-in from senior leadership right away.

RC: The initiative to roll out our scorecard at UNFCU was already one of our strategic initiatives. To get this off the ground, the team assigned to execute it went in search of experts and found our consultant Mark at Ascendant. When he came on board, he drafted the first strategy map for us. Our senior management team was involved right from the start in revising and adopting the strategy map.

MC: One of the key things with any strategy initiative in large organizations is that you don’t want people to feel as though an initiative has been pushed upon them—they should feel as though they are participants in its development. Having buy-in from the top right away made it easier to get the next tier of leadership involved, which made it easier for them to explain it to the level of employees beneath them, and so forth.

Step #3: Form strategic alignment throughout the organization.

RC: Once the executives agreed on the strategy map, they appointed a Measures Team comprised of the next tier of management who are their direct reports. These managers eventually had their own departmental scorecards, which created buy-in along the way and allowed us to train the next layers of management on the scorecard methodology and process. You can see how it started to cascade down quite effectively.

One of the main points to understand here is that you can churn out as many strategic plans or strategy maps as you want, but they will simply sit on a shelf and gather dust if people don’t understand or fully embrace them. It’s about getting everyone involved and making them feel empowered so they can contribute.

MC: This is a really important point that shouldn’t be glossed over. Having the scorecard roll out as a strategic initiative was absolutely critical to UNFCU’s success. A lot of organizations fail at implementing a BSC because nobody is accountable for it. People get busy and it falls through the cracks. Since UNFCU made it an initiative, it was one of the things that performance reviews were based on that year. That’s why it got done! At UNFCU, everyone felt accountable for making sure it was completed.

It’s also all about alignment—which is a term we use a lot. We had a goal of getting every staff member at UNFCU aligned so they could see the strategy. Not only could they look at the corporate strategy, but they could also look at the 12 departmental strategy maps we created to see how they were individually making an impact.

Step #4: Ensure that the measures you create add value.

RC: We had to temper our excitement for creating our own fancy composite-type measures. When we started going through the review meetings for target setting, we found we didn’t have the data we needed, which complicated things. You have to keep in mind that even though this is a big initiative, it’s okay to set basic measures that can evolve into something more meaningful as time progresses.

MC: This makes me think of the quote, “Perfect is the enemy of good enough.” Many times, people try to craft elaborate measures—but sometimes it’s best to keep it simple. You don’t want to overburden everyone on the team so they start thinking a scorecard will be more work than it’s worth. In a sense, you have to collect data and be okay with the 80% solution. As you go on throughout the years and collect more data, you will be able to determine the best information to collect and you’ll become better at the measure-making process. This is exactly what UNFCU did.

Step #5: Don’t be afraid to tie in your incentives plan.

RC: Alignment is all about people, culture, structures, processes, measures, and rewards—and this scorecard rollout has helped us transition to a new incentive plan to align our measures and rewards system. We’ve had the same incentive plan for a long time, so this is a huge change.

The incentive piece is always a little awkward to talk about, because everyone knows that equates to a bonus, but a funny thing started to happen as we were implementing. Even before we were getting ready to go live, things started to change in the organization to accommodate for the scorecard. For example, we have satisfaction surveys that we send out to our membership periodically—and our Marketing Department redid the survey questions based on our scorecard measures to make it even more relevant.

MC: Incentivizing around a BSC is something that really helps with buy-in. I told the UNFCU team from the start that they were being very ambitious with this goal, but they succeeded and in the end, using incentives was very successful. People paid attention to the scorecard because it’s linked to their own personal reward.

Step #6: Focus intensely on comprehensive strategic communication.

RC: Having a full-fledged strategic communication plan around your scorecard really will help. We have been doing live presentations to the staff, we released a video, and we have written and released a brochure and a discussion guide around the scorecard. People tend to resist change, and this is a monster of a change—we changed the incentives plan and we rolled out a pretty complex initiative that involves the entire organization. Thus, this type of initiative requires extra special communication attention.

MC: I can’t stress how important this is. I’ve been involved in many consulting projects, and sometimes leadership will change part of the way through the initiative—it really goes downhill after that. UNFCU has been successful because they prioritized good communication right from the start.

Step #7: Use software for scorecard management.

RC: This hasn’t been an easy task at all. We had hundreds of meetings about the BSC because of our ambitious approach with our 12 cascading scorecards. We still have to work hard at keeping them alive, and that’s where our Balanced Scorecard software will help us. Users throughout the organization who have been tasked with managing the cascading scorecards are using the software now, and we will use it to make sure reporting is happening and the BSC is working as intended. We plan on doing refreshes every year and making sure our measures and strategy stay in line.

MC: UNFCU’s scorecards have just been rolled out and are going live for the first time in 2016. We’ve spent all of 2015 building them. Part of their success so far is due to the fact that we’ve built a scorecard at the corporate level and then cascaded down from there—we had a repeatable process where we built at the top level, took it down a level, and so forth. Managing this will be very important, but I’m certain they’ll do a great job at it.

We’d like to thank Rossana and Mark for walking us through the steps they’ve taken to create and roll out their Balanced Scorecard.

How To Launch Your First Balanced Scorecard, Step By Step