How to structure change: Balanced Scorecard and Strategy Map — A consulting example
TAKE AWAY: Any change in the way a company does business requires a strategic process to support all stakeholders while also staying aligned with the mission and vision of the company. For instance, in this example, the shift to utilize technology more effectively is an important move for ABC Consulting because it can maintain their trusting relationships while also saving money. The key here is that the change needs to be done systematically and systemically, and that can only be accomplished by including financial and non-financial measures that put people first.
The world of work and learning in many fields has been relatively unchanged for over a century. While there have been alterations to fit some landscape changes (ex. online retail), the majority of interactions and exchange of materials are in-person. Education, retail, and business consulting are three areas that have relied on in-person relations to build trust and complete the majority of work.
The article “Retailers Reprogram Workers in Efficiency Push” from the Wall Street Journal outlines the effect technology has had on the measurement of productivity, scheduling, and overall analysis of workers. While the employee management system described changed how human capital may be organized or measured, the main model of the business, in-person sales, remained the same. With the current pandemic affecting people’s ability to leave their homes or even keep the brick-and-mortar business open, technology offers a wide variety of effective options for communication, collaboration, and work sharing.
Thus, the way we interact and conduct business needs to change in the short-term while we continue social distancing and in the long-run as people grow more accustomed to virtual meetings and online work. The following plan shows how a small business consulting firm could shift its work in a new paradigm but still maintain its core mission.
Context Example: ABC Consulting
ABC Consulting is a small privately held consulting firm that focuses on working with small companies, almost all under $10 million in revenues. Such companies include family businesses, spin-offs from larger corporations, or start-ups that may require marketing, accounting, management, or strategy support. For the most part, ABC has centered on the northeast geographic area, using their knowledge of the locales to their advantage and drive more effective marketing and consulting advice.
Since the company works with small businesses in a close geographic range, ABC Consulting tends to do most of its client work in-person and on-site. By going to the client, leadership believed that it was the best way for consultants to quickly gain field knowledge of the target business as well as build trust with the client. With advanced virtual meeting technology and document sharing, a number of meetings that were taking place in-person could be done remotely.
Effective use of remote technology could reduce travel costs, increase productivity of consultants as they don’t lose as much time on the road and are able to complete more analyses and communicate more often working from home or the office. In addition, consultants have not created communication networks among one another or with senior leadership and technology could create opportunities for real collaboration, such as through the use of Mural by IBM, Google Docs, and Microsoft 365.
Thus, as on-line platforms have become more robust and people more accustomed to virtual communication, ABC wants to be able to offer its services throughout the pandemic shut-in period as well as to a broader group of customers without sacrificing the quality of work their company is known for.
Recommendation Utilize the Balanced Scorecard (BSC) and Strategy Map to both analyze the company in its current delivery model and match its goals and mission with a shift to more on-line platforms. BSC Overview
The purpose of the BSC is to help a company be able to incorporate financial and non-financial aspects of the organization onto a single plan that ties actions and KPIs to the overall mission and vision. While there are definite financial positives to utilizing more technology, to do so effectively will require buy-in from employees and the retention of trust with customers. The reason we can suggest looking at the BSC for ABC Consulting is that it brings human capital and customers into the strategic plan for a company as they begin to shift their delivery model.
The BSC has four main perspectives: financial, customer satisfaction, internal processes, learning and growth. Within each of the above perspectives, ABC leaders, teams, and various stakeholders can set goals, lay out techniques, and include explicit measures for analysis of progress towards the goals.
Sample Strategy Map
The goal of the strategy map is to provide a visual for how to link the various elements in any company’s BSC. The first step of the process is to have clear mission and vision statements where the vision lays out the future position of the company and the mission lays out work of today to achieve the vision. ABC has worked to build such statements which can be used to anchor the BSC:
Sample Vision: To be a leader in supporting start-ups and privately-held small companies with financial, marketing, management, and business strategy consulting services.
Sample Mission: To create multiple systems of communication that allow consultants to engage with clients regularly and effectively as well as have better connection to managers and senior leadership for support and to optimize ABC’s high-quality human capital.
The BSC works from the bottom up, starting with learning and growth and moving upwards to financial measures (see Figure 1).
Figure 1: BSC Perspectives
This approach may seem counter to how some leaders approach planning since finances are usually on the front burner and decisions at that level affect all other levels directly. However, in the long-run, by focusing on employees and customers, not only will financial goals be accomplished by proxy, but the changes in the company will be longer lasting and more effective.
In this case, the goal of having consultants and the company overall optimize technology to meet current and hopefully new clients’ needs, a goal needs to be to transition to various technology platforms as efficiently as possible. Thus, the inclusion of technology needs to propagate throughout the BSC, ending up with an effect upon quantitative measures such as costs and profits, as well customer relationships.
The strategy map serves as a visual for the important goals that are contained within each perspective. The map is generally not very detailed, using more declarative sentences and phrases, but requires extensive time and collaboration by senior leadership and other stakeholders so the content is well understood by everyone. This team effort builds a document that identifies the most critical objectives for each perspective and avoids getting “into the weeds” on any one topic.
Figure 2 is a sample BSC developed for ABC Consulting that obviously lacks the in-depth knowledge of the company but illustrates the type of targeted language that can be used and how the different perspectives fit together. To further show the value of the BSC in planning for significant change, goals that would be affected by the increased use of technology are highlighted, thus propagating the change from people, to processes, to the financial bottom line.
Figure 2: Sample strategy map for ABC Consulting
Another way to view the BSC and further extend the planning can be to utilize a table. Such a format allows for more specifics but still maintain the four perspective while adding in techniques and measures. Figure 3 takes a sample of the goals from the visual BSC in Figure 2 and lays out more specifics that the collaborative team would need to get into while creating any sustainable plan. Again, the items related to the maximization of technology usage have been highlighted.
Figure 3: Goals, Techniques, and Measures for ABC Consulting’s BSC
TAKE AWAY Any change in the way a company does business requires a strategic process to support all stakeholders while also staying aligned with the mission and vision of the company. For instance, in this example, the shift to utilize technology more effectively is an important move for ABC Consulting because it can maintain their trusting relationships while also saving money. The key here is that the change needs to be done systematically and systemically, and that can only be accomplished by including financial and non-financial measures that put people first.
 O’Connell, V. (2008). Retailers reprogram workers in efficiency push. Wall Street Journal. September 10, p. A1. Clear Point Strategy. (2015). Balanced scorecard strategy maps: For-profit examples. Retrieved from: https://offer.clearpointstrategy.com/hubfs/SampleStrategyMaps-ForProfit-8.17.15-CM.pdf?hsCtaTracking=6a43c7b6-5f27-4084-ae56-31da57e8776d%7Cae2933d8-a4b3-4f36-9a1b-74bdcb253d7d Adapted from: Clear Point Strategy. (2015). Balanced scorecard strategy maps: For-profit examples. Retrieved from: https://offer.clearpointstrategy.com/hubfs/SampleStrategyMaps-ForProfit-8.17.15-CM.pdf?hsCtaTracking=6a43c7b6-5f27-4084-ae56-31da57e8776d%7Cae2933d8-a4b3-4f36-9a1b-74bdcb253d7d