implementing unbalanced scorecard
DESCRIPTION
My presentation at Strategy Execution 2013 conference.TRANSCRIPT
Tathagat Varma, Sr. Director,
Yahoo! Strategy Execution 2013
Conference (c)
Implementating UnBalanced Scorecard
– A Case Study
• Balanced Scorecard • Strategy Map • Our Journey • Challenges • Results • Learnings
Strategy Execution 2013 Conference (c)
Discussion Topics
Strategy Execution 2013 Conference (c)
Balanced Scorecard
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• Started in mid-2010 through 2012 • Pragmatic and empirical approach • Excellence program to reflect KRAs • KPIs aligned with priorities and goals • Goals for product and support groups • QBRs to track and review
Strategy Execution 2013 Conference (c)
Our Journey
• status on implementaHon of planned iniHaHves
• effecHveness of results accomplished on a quarterly basis
• strategic iniHaHves across various product and support groups in a highly matrixed organizaHon
• execuHon to the R&D center charter and overall organizaHonal strategy
Align Coordin-‐ate
Track Review
• Balanced vs. Unbalanced: “The most valuable use of a scorecard is as a driver of a strategically focused improvement process and as such need not and usually should not be “balanced””
• Vital Few vs. Trivial Many: “Only a pattern of out-of control situations that can't be resolved by existing recovery processes should be a candidates for scorecard inclusion”
• Financial vs. Non-financial: “OK, I'll admit it right up front: I still don't understand why we need financial measures on a scorecard at all”
• Internal vs. External: “scorecard metrics, taken in their entirety, should be unbalanced in favor of internal or process metrics”
• Leading vs. Lagging: “You can not manage lagging indicators ... they are inherently after-the-fact measures”
• Short-term vs. Long-term: “Long-term objectives run the high risk of inadvertently incenting short-term inaction”
• “In my opinion, most scorecards should be unbalanced toward internal, leading, short-term metrics.”
Strategy Execution 2013 Conference (c)
Our approach
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• Delivering world-class performance by applying systems thinking approach to achieve • a winning culture that promotes continuous
learning, personal growth and inter-group collaboration, and makes us “Proud to be a Yahoo!”
• an execution system that supports operating as one product team to achieve agility, faster innovation, meaningful risk-taking and consistent delivery of world-class products with “wow” user experience
• an operational model that makes best usage of company resources to provide a wow experience to employees and leaders
Strategy Execution 2013 Conference (c)
Excellence Program
Cornerstones of Excellence program were broken down into “strategic horizontal programs”
Culture
Retain
Develop
Hire
Brand Leadership
Innova6on
IP Program
InnovaHon Program
Technology Thought
Leadership
Execu6on
Agility
Dev Excellence
Service Engineering & OperaHons
Opera6ons
FaciliHes Survey
Feedback
Fiscal Discipline
SLA Performance
1. Unbalancing the Scorecard 2. Vertical vs. Horizontal Goals 3. Organizational changes 4. Execution, Execution, Execution 5. Effectiveness review
Challenges
Unbalancing the Scorecard
Beware: The Unbalanced Scorecard – David P Norton
Effectiveness Reviews
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• There is no one-size-fits-all • ‘Balanced’ has limited appeal • Leadership’s role is critical • Strategic PMO to coordinate • Execution is the key • Trends are more useful • Constant realignment is needed • Double-loop learning is beneficial
Strategy Execution 2013 Conference (c)
Learnings
• “If a good scorecard consists of 23–25 measures, all but five of them should focus on customers, internal processes, and learning and growth.” – David P. Norton, 2000
• “Our work in innovation makes clear that unless companies differentiate beyond the norms of the competitive set in which they participate, they cannot get paid a differential return.” – Geoffrey Moore, 2005
Some parting thoughts
• http://www.schneiderman.com/Concepts/The_First_Balanced_Scorecard/How_the_Scorecard_Became_Balanced.htm
• http://www.slideshare.net/Managewell/strategic-alignment-of-horizontal-and-vertical-pmo-goals-final
• http://www.schneiderman.com/AMS_publications/Unbalanced%20Scorecard/unbalanced_scorecard.htm
• http://www.schneiderman.com/Concepts/The_First_Balanced_Scorecard/BSC_INTRO_AND_CONTENTS.htm
• http://geoffmoore.blogs.com/my_weblog/2005/11/unbalanced_scor.html
Strategy Execution 2013 Conference (c)
References
Tathagat Varma http://managewell.net
Strategy Execution 2013 Conference (c)