Friday, 23 January 2009

The Vision Thing

Why a defined strategy is crucial to performance management

I’m about to give a speech at my local Toastmasters club and I have chosen a rather controversial topic. I will argue, fairly or unfairly, that Barack Obama didn’t have enough of The Vision Thing in his inauguration speech. I have no doubt this will be deeply unpopular.

Obama is remarkable in many ways – not least in his ability to deliver a mighty fine speech. And right now what America needs most is a visionary president.

Part of my reason for choosing this subject wasn’t because I thought Obama needed a bit of help, but that it reminded me just how important vision and strategy is to performance management.

Without a strategy you cannot compare performance, good or bad, to anything. In fact, without a strategy you don’t really know what you should be doing when you get out of bed in the morning.

The ubiquitous scorecard has become a powerful way of monitoring performance in companies and public sector organisations alike. And many have implemented the Balanced Scorecard, created by Kaplan and Norton during the 1990’s.

The Balanced Scorecard is remarkable for two reasons.

1. It monitors four areas of a business: financials, customer focus, internal focus and learning & growth.
2. It encourages measures to be derived from strategy.

I often wonder whether what gets remembered most from their work is the four quadrants, and not the link to strategy. Yet it is the latter which is the more powerful, and at the time was the most ground breaking.

When a company first starts to implement the Balanced Scorecard they often find that their strategy isn’t defined as well as they thought. It prompts debate, arguments, refinements, and more debate. In fact some companies purposefully bypass the strategy step because they know it will be difficult. But once strategy is agreed there is a forward motion that almost takes on a life of its own. Good measures become easier to identify, and performance management becomes a whole lot easier.

I still don’t think we had enough of the Vision Thing in the inauguration speech and shall argue my case despite any frosty looks. But my personal silver lining was that it prompted me to look at my own company’s vision statement and make some necessary revisions.

That Vision Thing matters.

2 comments:

  1. How did your speech go? I have just written our new business strategy and I will check it against the balanced scorecard now!

    Will Hawkins

    ReplyDelete
  2. Hi Will

    Thanks for your comment! The speech is now next Monday - postponed due to a winter virus. Obama is going from strength to strength, but I hope the central message will still be relevant. Delighted to hear you are a fan of the Balanced Scorecard - it's such a powerful tool.

    ReplyDelete