​Balanced Scorecard

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Balanced Scorecard (3-4 pages)

Kaplan and Norton created the Balanced Scorecard model to serve as a dashboard for reporting a combination of financial and non-financial metrics for organizations. Executives, managers, and employees alike benefit from an understanding of what is important to the organization, what performance levels are expected, and how they are performing.

Your Capsim competition rounds used a dashboard to report selected performance metrics to your team. This allowed you to know where you were in relation to your goals and what levers of control you might want to adjust to continue making progress.

Read the article, A Balanced Scorecard Hall of Fame Profile: U.S. Army (from your Module 8 required readings). Create a Portfolio Project that:

  • Applies an assessment of the five principles of a Strategy-Focused Organization to your Capsim experience.
  • Provides recommendations for further improvement in team performance.

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A Balanced Scorecard Hall of Fame™ Profile U.S. Army HARVARD BUSINESS SCHOOL PUBLISHING This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global Campus, from October 2017 to April 2018. What is the Balanced Scorecard Hall of Fame? The Balanced Scorecard Hall of Fame for Executing Strategy™, administered by Balanced Scorecard Collaborative, recognizes organizations that have achieved breakthrough performance largely as a result of applying one or more of the five principles of the Strategy-Focused Organization. These principles, formulated by Balanced Scorecard creators Robert S. Kaplan and David P. Norton, are described in detail in their book The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment (Harvard Business School Press, 2001). BSC Hall of Fame members are personally selected by Drs. Kaplan and Norton. To learn more about Hall of Fame selection criteria and Hall of Fame members, visit bscol.com. The Five Principles of the Strategy-Focused Organization Each of the five principles of the Strategy-Focused Organization include specific management best practices that contribute to the achievement of breakthrough results. These best practices—validated through ongoing research with Hall of Fame organizations and hundreds of other users of the Balanced Scorecard around the world— must be embedded in any organization that wants to make strategy execution a core competency. Principle #1. Mobilize Change Through Executive Leadership Executive leadership, driven by a need for change, supports the drive to establish a new way of managing based on a performance-oriented culture. Principle #2. Translate the Strategy into Operational Terms The Balanced Scorecard is used to translate the strategy into a language that everyone understands. Principle #3. Align the Organization to the Strategy The scorecard is used to cascade the strategy to all parts of the organization and align resources needed to accomplish the strategy. Principle #4. Motivate to Make Strategy Everyone’s Job The reward and recognition system is used to align individual behavior with performance objectives called for by the strategy. Principle #5. Govern to Make Strategy a Continual Process Strategy execution is linked to the budget, and a reporting system based on scorecard measures is used to provide feedback on strategic performance. This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global Campus, from October 2017 to April 2018. Balanced Scorecard Hall of Fame Profile: U.S. Army Table of Contents Profile ..................................................................................1 Key Results, Takeaways ................................................8 SFO Spotlight (best practices)....................................9 Strategy Map..................................................................10 To Learn More ................................................................11 Transforming an organization of 1.2 million people scattered throughout the globe is no minor feat. But in what perhaps constitutes the world’s largest Balanced Scorecard implementation, the U.S. Army is doing just that. Thanks to an immense, carefully orchestrated scorecard rollout, the Army is working to create the ideal force of tomorrow while also sustaining its readiness to respond to the demands of today. ABOUT U.S. Army Industry: Government A vast organization whose origins predate the Revolutionary War, the U.S. Army has a focused mission: to serve the American people, protect enduring national interests, and fulfill national military responsibilities. One of the United States’ three military departments (along with the Navy and the Air Force) reporting to the U.S. Department of Defense, the Army is led by the Secretary of the Army and the Chief of Staff, U.S. Army. Like the other military departments, this immense organization has two components: active and reserve. Its operational missions are supported by its institutional organizations, which train, equip, and deploy personnel, and manage the additional activities that enable operational personnel to do their job. Operational personnel are organized into local armies, corps, divisions, brigades, and battalions. An oft-cited Army motto is, “Without the institutional Army, the operational Army cannot function. Without the operational Army, the institutional Army has no purpose.” The U.S. Army has 11 major commands: Europe; Pacific; the Eighth U.S. Army, Korea; Forces Command; Special Operations Command; Space and Missile Defense Command; the Corps of Engineers; Materiel Command; Medical Command; Military Traffic Management Command; and Training and Doctrine Command. Each major command has assigned units and facilities. Today the Army is engaged in battling terrorism and providing peace and stability in many regions throughout the world. Personnel: More than 1.2 million Budget: $93.9 billion (plus wartime supplemental allocations) Inducted into the Balanced Scorecard Hall of Fame: 2003 The September 11, 2001, terrorist attacks in New York and Washington, along with the ensuing global war on terrorism, confirmed what the nation’s military leaders already knew: the U.S. Army needed to transform itself into a leaner, more nimble, and technologically advanced fighting force that could respond quickly and decisively across a full spectrum of operations. Only then could it fulfill its demanding mission: serving the American people, protecting enduring national interests, and fulfilling national military responsibilities. The Army had already taken steps to improve its current combat-readiness reporting system, in use since 1963. In 1999, the National Defense Authorization Act directed the U.S. Secretary of Defense to develop a readiness reporting system for the armed services that would provide more accurate, timely, and objective readiness information to Congress. An Army War College1 study presented to the Army’s Chief of Staff in January 2000 confirmed that the existing readiness reporting system did not provide senior Army leadership with information adequate to manage the total force’s readiness. Though useful in many respects, the reporting system relied heavily on lagging indicators to provide a snapshot of fighting units’ capacity to perform their wartime missions. With such an incomplete picture, Army leaders could not proactively assess the operating forces’ readiness. Nor could they easily link readiness to their resource-allocation decisions. Equally frustrating, the information the older system relied on was often outdated. The War College study recommended that the Army reengineer and expand its existing reporting system so leaders could focus more sharply on the Army’s mission, better evaluate strategic readiness, leverage Web-based automation, and improve the Army’s capability to perform future missions. The desired outcomes? Better cross-functional coordination and accelerated decision-making ability, as well as a clearer This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing andfrom Balanced Scorecard 2017 Collaborative, a Palladium company 1 Balanced Scorecard Hall of Fame Profile: U.S. Army articulation of the Army’s mission, a sharper focus on stakeholders, and the more strategic allocation of resources. In response to the study, the Army launched a complex, long-term effort in 2000 to transform its operational forces and institutional base into the ideal “future force”—one that could leverage technological advances and organizational flexibility to radically improve the Army’s ability to address future conflicts. But by 2001, the global war on terrorism had intro- But General Peake showed people throughout the Army Medical Department how the scorecard would actually help them address their thorniest problems. The scorecard, he told them, would enable them to make a compelling business case for important initiatives. This argument caught their attention. duced a new kind of conflict—one that requires deployment of a broad range of active, reserve, and national guard forces; integration with joint forces; and collaboration with coalition partners. The events of 2001 and their fallout further intensified the Army’s desire to better assess its ability to fulfill both current and future performance requirements in a changing world—a delicate balance that all large organizations must strike. Army leaders acknowledged that combat readiness reporting alone was no longer enough. The force also had to examine its strategic readiness. For example, in addition to tracking resource measures such as equipment availability, it needed to a way to assess its strategic status: to answer such questions as, “Are we recruiting and organizing in a way that will enable us to succeed in multiple theaters of war simultaneously?” Moreover, the Army needed to create a tool for measuring and reporting its strategic readiness throughout the organization Drawing Inspiration from the Army Medical Department In selecting the Balanced Scorecard as its framework for implementing its strategic-readiness management system, the Army looked to its own Medical Department (AMEDD) for inspiration and education. Since 2000, AMEDD had been using the BSC to sharpen and communicate strategy. The Medical Department adopted the BSC in 2000 when the then-new surgeon general, Lt. Gen. James Peake, took command. Concerned about the department’s rising costs and convinced of its need to provide outstanding medical service in order to ensure sufficient recruitment and retention, General Peake recommended the scorecard. He was familiar with the BSC methodology from his previous command, and believed in its power to link long-term strategy to near-term action. AMEDD developed a high-level scorecard and cascaded it down to the department’s major subordinate commands (generally regions, such as the North Atlantic Regional Medical Command). The scorecard was then cascaded to lower-level elements, such as hospitals and clinics in a given locale. Not surprisingly, the department’s scorecard implementation team encountered some resistance early in these efforts. Medical personnel, already working long days, complained that they wouldn’t have time to master and use a new performance-management system. But General Peake showed people throughout the organization how the scorecard would actually help them address their thorniest problems—such as obtaining funding. The scorecard, he told them, would enable them to make a compelling business case for important initiatives. This argument caught their attention; people recognized and valued the opportunity to compete more successfully for funding against certain hospitals that they believed had unfairly captured the lion’s share of limited resources. AMEDD further “marketed” the BSC through a comprehensive communications plan. The communications team used two key tactics to convince people of the scorecard’s value. It ensured that every communication about the scorecard answered the question, “What’s in it for me?” and synchronized phases of the communications program with steps in the scorecard cascading process. General Peake’s commitment to laying out the advantages of the scorecard and the communication team’s ingenuity soon paid dividends. By 2002, health concerns had dropped to third place behind concerns about housing and military police staffing in the Army. What explains these gains? AMEDD personnel had boosted their daily performance on the job: They were answering phones 10% faster than This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing andfrom Balanced Scorecard 2017 Collaborative, a Palladium company 2 Balanced Scorecard Hall of Fame Profile: U.S. Army before, getting patients to the right physicians more quickly, and making additional improvements to remove the “hassle” associated with receiving quality medical care. Experimenting with Prototypes According to Maj. Gen. Patrick D. Sculley, AMEDD’s former deputy surgeon general, “AMEDD’s BSC was the driving force in the Army’s own BSC adoption.” Intrigued by AMEDD’s experience, the Army decided to ease into the scorecard effort by initiating a prototyping process. From October 2000 to March 2001, the Army developed prototypical performance measures, identified links to local data sources, experimented with aggregation of local performance data to higherlevel scorecards, and developed a prototypical Army scorecard. Personnel in Fort Campbell (Kentucky), Fort Benning (Georgia), and Rock Island Arsenal (in the Mississippi River between Iowa and Illinois) participated in these efforts. Fort Riley (Kansas) and Fort Drum (New York) conducted parallel experiments. When it became evident that the methodology used was inappropriate, the Army sought help from Balanced Scorecard Collaborative in November 2001, once the state of urgency created by the September 11 attacks subsided. Formalizing the Strategic Readiness System In November 2001, with a new approach in hand, the Army launched an enterprise-wide strategy execution initiative that it dubbed the Strategic Readiness System (SRS)—the Army’s name for the BSC methodology. A scorecard team consisting of individuals from the Army’s G-3 organization (operations)—including a project manager from G-3’s readiness division and a core team manager— defined a whirlwind set of deadlines for making SRS real. The implementation would unfold in the following phases: staff, and major commands, and align them to the Level 0 scorecard. Also in this phase: Establish an SRS Automated Reporting Environment. Publish strategy maps and strategic performance data in an online environment. Automate data collection and make drill-down data available. • Phase 3: October 2002 to April 2003— Cascade the Scorecard to Level 2. Further train, deploy, and automate the BSC to the subordinate organizations. • Phase 4: Ongoing Since April 2003—Integrate SRS with Other Army Management Systems. For example, have the General Officer Steering Committee begin meeting regularly to review performance against the Level 0 scorecard. Because of the scope and complexity of systems integration, this phase is still under way. The scorecard team then customized the generic public-sector strategy map to reflect the Army’s strong mission orientation. Like many government and nonprofit organizations, the Army decided to state its mission on its high-level strategy map and position its stakeholder (customer) perspective at the top of the map. The resources (financial) perspective was placed at the bottom of the map, to demonstrate that resources enable attainment of the organization’s mission and are not the supreme goal of the organization. The strategic themes in the Level 0 strategy map reflected the Army’s strategic priorities. They included: • Core Competencies—capabilities the Army needs to fulfill its responsibilities • Readiness—essential for meeting the immediate needs of the national defense strategy • Transformation—the metamorphosis required to secure the Army’s preeminence in a changing world • Phase 1: November 2001 to March 2002— Develop Level 0 (Enterprise) Scorecard. Finalize the high-level scorecard and align the Army’s leadership team around it. Provide strategic guidance for subordinate commands. In March 2002, the working version of the Level 0 scorecard was approved by the Army’s Chief of Staff. • Sound Business Practices—the optimal use of resources in all processes • Phase 2: March 2002 to October 2002— Cascade Level 0 Scorecard to Level 1. Train local core teams on BSC basics. Create scorecards for 36 of the Army’s department-level, headquarters Creating the enterprisewide strategy map raised questions about how the Army should balance current and future priorities. Namely, would a transformation campaign focused on future readiness compromise the force’s current readiness? Reflecting • People—the cornerstone of the force • Secure Resources—the acquisition and use of resources required to execute all of the above priorities This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global from October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing and Balanced Scorecard 2017 Collaborative, a Palladium company 3 Balanced Scorecard Hall of Fame Profile: U.S. Army its need for tradeoffs, the Army depicted the themes of Readiness and Transformation as interlocking ovals on its Level 0 strategy map. Cascading at a Blistering Pace The Army’s scorecard effort quickly gained the kind of momentum that any observer would deem remarkable for an organization of such heft, reach, “At the same time [that we were implementing the SRS], we were an army at war. It was critical to have a strategic performance management system up and running quickly so that we could maintain focus on the long-term strategy of our transformation, even as we were supporting combat operations in Iraq and Afghanistan.” Robert Carrington Chief of the Strategic Management Division implementing the scorecard according to the SRS Operations Center timeline. All told, the Army developed more than 300 scorecards for Level 1 and 2 Army organizations around the world—each of them linked in a hierarchical manner to the Level 0 Army strategy map. The Army continues to further cascade the scorecard to Level 3 and 4 organizations such as divisions and separate brigades, each of which consists of between 2,000 and 20,000 soldiers. The aggressive pace of the cascading process was intentional; it enabled the scorecard team to build momentum in this massive and far-flung organization. Notes Robert Carrington, Chief of the Strategic Management Division, “At the same time [that we were implementing the SRS], we were an army at war. It was critical to have a strategic performance management system up and running quickly so that we could maintain focus on the long-term strategy of our transformation, even as we were supporting combat operations in Iraq and Afghanistan.” He continues, “As the Secretary of the Army says, ‘We are fighting today while simultaneously preparing for tomorrow.’” Taking Advantage of Technology and complexity. In just six months, the Army finalized its Level 0 strategy map and scorecard. It then cascaded the scorecard to 36 Level 1 organizations. Within the following six months, it cascaded the scorecard to 250 subordinate organizations. Scorecards were approved through the following chain of command, in a strict but swift process: 1. The Council of Colonels (CoC) received scorecards and reviewed them with scorecard creators to discuss issues of concern. 2. The CoC then forwarded approved scorecards to the Director, Operations, Readiness, and Mobilization (OD). 3. The OD Director forwarded approved scorecards to the Deputy Chief of Staff, G-3. 4. The Deputy Chief of Staff, G-3 reviewed the scorecards and forwarded approved versions to the Army Chief of Staff. 5. The Chief of Staff, Army, sent memoranda to organizations informing them that their scorecard had been approved and directing them to begin The Army’s size and geographic dispersion posed serious challenges for the BSC rollout. For example, how would the organization manage the logistics of so many different efforts spread so far apart? How would it create a central repository of BSC information? And how would it maintain knowledge of the BSC as leaders rotated into new positions? As the SRS project gathered steam, leaders obtained assistance from the Balanced Scorecard Collaborative to create the SRS Operations Center—an internal consulting function. The Center would provide guidance, ensure quality control, drive training, and offer technology support. The BSC experts who staffed the Center worked to educate additional internal Army personnel, training them to drive the initiative. A “product review” checklist helped guide scorecard developers in creating strategy maps, identifying appropriate strategic themes, objectives, and measures, and keeping them to a reasonable number. For example, the checklist contains such criteria as “the linkages in the strategy map between perspectives have been tested and validated,” and “each objective on the scorecard currently has a measure”—to which the developing team would check “yes” or “no.” This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing andfrom Balanced Scorecard 2017 Collaborative, a Palladium company 4 Balanced Scorecard Hall of Fame Profile: U.S. Army Using support tools such as multimedia resources, scorecard templates, and project-management tools (including timelines and team workspaces)—all of which were now available in one place—Level 1 organizations constructed their scorecards to align to the Level 0 map. In addition to these essential resources, the Army used technology extensively in facilitating SRS. After the Level 0 and Level 1 scorecards were built, the Army installed BSC reporting software. At the same time, the team began creating links between the software and its existing databases for scorecard measures (a process still under way due to the extent of the Army’s existing measures). They augmented that information with data they had never tracked before—such as the new leading strategic measures defined on their scorecards. The logistics branch, for example, developed measures to track the overall availability of key spare parts and the funding for equipment maintenance, and combined both sets of data into a single metric. The SRS software interface provides a single, centralized location where officers can quickly learn the status of equipment availability, staffing, and other key metrics. The system thus enables the real-time readiness snapshot that largely motivated the Army’s BSC adoption in the first place. There is total visibility across the organization: any authorized BSC user can see any other similarly authorized user’s scorecard. However, care is taken to segregate classified and unclassified information to different servers, depending on the sensitivity of the data. 1. Deliver a consistent message about SRS. To ensure ease of access to the reporting software, the SRS team created a link to it from Army Knowledge Online (AKO), the Army’s knowledge management system. By logging on to AKO, authorized scorecard or measure owners can access scorecards online with a single sign-on, at any time and from anywhere. AKO also features an SRS portal with educational materials on the BSC and the SRS project. The communications team also defined a primary audience of Army leaders from many different command levels, as well as future leaders being educated at the U.S. Army War College and the U.S. Army Command and General Staff College.2 Secondary audiences included officials of the Department of Defense as well as congressional leaders and policymakers. Automating the scorecard early generated huge benefits. While preparing reports for their superiors, officers could now view one another’s scorecards online rather than having to visit the commands themselves to gather performance information. According to Col. Robert Cox, then division chief, Army Readiness Division, “The BSC enables each team to evaluate recent unit performance in a way that cuts across organizational silos (e.g., logistics, operations, medical, training, and other staff areas). People from different organizations within the Army have easy access to scorecard data, and can align quickly around issues that connect various organizations. Put simply, the scorecard enables the Army to ‘get the right people in the room’ when issues crop up.” The team pitched the scorecard’s overarching message: “The Strategic Readiness System (SRS) is designed to enable the Army to effectively support the national military strategy and direct resources to influence readiness across the enterprise. The SRS is a strategic tool that enables the Army to maintain its focus on key strategic objectives and proactively achieve its mission.” With the technical functions running smoothly, commanders began populating their scorecards with data they had already maintained rigorously, such as the quantity of ammunition in a particular location. Getting the Word Out In addition to technology, communication has played a large role in the success of the Army’s BSC initiative. The SRS team developed an aggressive, comprehensive strategic communications plan that had six goals: 2. Minimize the unknown for recipients of the message. 3. Keep Army personnel informed and motivated. 4. Help people understand and manage the changes taking place. 5. Enable people to share knowledge. 6. Gather feedback on the progress of the SRS implementation. The vehicles for communicating these points to primary audiences ranged from stories in Army newspapers and defense-related periodicals (such as Defense News and National Defense magazine), the SRS homepage on AKO, and videos, to e-mails, printed brochures, and coffee mugs bearing the SRS logo. The Army also launched a bimonthly newsletter—SRS Update—devoted to all things scorecard. Published by the SRS Operations Center, the newsletter offers articles on topics ranging from the practical (“What Is a Scorecard Owner?” “How Do You Change Your This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global from October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing and Balanced Scorecard 2017 Collaborative, a Palladium company 5 Balanced Scorecard Hall of Fame Profile: U.S. Army Scorecard?”) to the engaging and informative (“SRS Meets the British Army,” a piece on the U.K. Ministry of Defence’s scorecard implementation). To get the word out to secondary audiences, the communications team developed informational memos for members of Congress and conducted briefings for congressional staff members. It also issued press releases targeting regional and technical publications and the Wall Street Journal and conducted roundtable discussions with media. In addition, the team began participating in Army trade shows. Making Education a Priority In the Army’s view, communication and education go hand in hand. Putting this into action for the SRS meant training about 1,200 people in dozens of classrooms around the globe on the scorecard during the initiative’s early phases. The Army then extended training to the Web and other channels. For example, it has developed a series of online, self-paced learning Because Army leaders are required to regularly rotate to new positions, training is particularly essential to preserve organizational memory and promote an understanding of the SRS. For this reason, the Army began providing continuous training for leaders in 2003. modules covering such topics as defining measures and setting targets, achieving horizontal and vertical alignment, presenting performance analyses, creating team and individual scorecards, and refreshing strategy. Because Army leaders are required to regularly rotate to new positions, training is particularly essential to preserve organizational memory and promote an understanding of the SRS. For this reason, the Army began providing continuous training for leaders in 2003. The Army also initiated efforts to institutionalize BSC methodology and SRS education by including them in the Army curricula required for all future leaders. (As of December 2004, these efforts were still under way.) In addition, it included guidance on the SRS in The Army Plan, the central guidance document for the Army’s strategy. The Army also knew that people throughout the organization could learn a lot from one another. Thus it asked Level 1 and 2 scorecard owners to be the ones to train people in Levels 3 and 4 on SRS methodology. It also established monthly teleconferences to enable officers to explore questions about topics such as SRS reports, software upgrades, and user roles. In addition, staff officers leading the BSC effort can complete monthly BSC methodology and application learning modules that enable them to access SRS in the classroom, work through issues with system experts, and participate in system demonstrations. Face-to-face learning experiences have also proved important to the Army’s SRS program. In September 2004, the organization held its first annual SRS Conference. This gathering brought together more than 100 personnel with SRS responsibilities to discuss SRS and learn from each other’s experiences. The conference also featured speakers from various outside organizations who shared their BSC experiences and gave participants ideas they could implement in their own organizations. Finally, in keeping with the Army’s emphasis on learning from feedback, the SRS Operations Center began gathering feedback on its own performance. Through a User Evaluation Survey, Center staff members invite Army personnel to share their suggestions for improving management of the SRS program. Keeping a Finger on the Pulse of Strategy The Army knew that the ongoing review of strategic performance would be crucial to the SRS’s success. To that end, many Army units began reviewing their scorecards monthly—acknowledging progress toward targets, addressing challenges, and defining or refining action plans. Rather than focusing on data during these review sessions, participants analyzed causeand-effect relationships between their scorecard objectives and the strategic outcomes their units were generating. In the Army, change is a constant, so strategy must be frequently evaluated with an eye toward possible modification. The SRS team recommended updating scorecards once a year to reflect changes in strategy and objectives and to constantly improve subordinate scorecards’ links to the Level 0 scorecard. To support this effort, the Army began holding annual SRS Strategy Review meetings, at which officers explored This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing andfrom Balanced Scorecard 2017 Collaborative, a Palladium company 6 Balanced Scorecard Hall of Fame Profile: U.S. Army questions such as, “Is this strategy moving us closer to achieving our organization’s mission and vision?” “Are there any missing objectives that we need to add to and measure on our scorecard?” “Do we have the right set of initiatives to drive our strategy?” At the first SRS Strategy Review meeting, held in June 2003, participants brainstormed and discussed ways to cascade training throughout Level 1 organizations, leverage technology, and encourage ongoing learning about strategy management. Attendees also shared best practices. With the Army at war these past few years, change— and shifts in strategy—have been inevitable. The Army’s strategy map has evolved since its earliest iteration, and will continue to do so as strategies and priorities change. Reaping the Rewards The Army has achieved significant high-level gains thanks to the SRS. As Gen. John M. Keane, Vice Chief of Staff during the initial stages of implementation (from 1999 to 2003), explained, “The Army’s Strategic Readiness System…provides Army leadership with accurate, objective, predictive, and actionable readiness information to dramatically enhance strategic resource management. For the first time, we have an Army enterprise management system that integrates readiness information from both the Active and Reserve components—enabling the Army to improve support to combatant commanders, invest in soldiers and their families, identify and adopt sound business practices, and transform the Army to the desired future force.” According to General Keane, the SRS has also enabled the Army to manage its strategy more proactively. “This reporting system,” he notes, “markedly improves how we measure readiness by gathering timely information with precision and expands the scope of the data considered. We are further developing this system to leverage leading indicators and predict trends—avoiding issues that affect readiness before they become problems.” Thomas E. White, former Secretary of the Army, cited ease of use of the BSC as an important factor in achieving such gains: “The great thing about this system is that it places no additional burdens on soldiers. We’re leveraging existing systems so that leaders can get a better picture of readiness as we continue to achieve the Army vision.” Interestingly, in 2004, the Department of Defense began requiring all defense agencies and military services to adopt a Balanced Scorecard. If the Army’s Balanced Scorecard wasn’t an inspiration for this requirement, perhaps its implementation will serve as a role model to these organizations. The Army’s savvy rollout of the SRS has also enabled individual commands to achieve improvements in their performance. For example: • Special Operations Command has twice used its BSC to tell the story of how it has too few resources to achieve its mission—and has won significant additional funding as a result. • Medical Command has adopted a 100% leadindicator scorecard in addition to a lag-indicator scorecard to focus on predictive measures. This command also led the way in populating measures with historical data such as immunization records, which were crucial for reporting. Medical Command saw health concerns drop to number three behind housing and military police staffing. • The U.S. Army Reserve has used the BSC to gain a clear view of where resources are being devoted. This view has enabled leaders to better manage spending. Other top-level leaders have praised additional aspects of the SRS. “The SRS changes the way we evaluate readiness,” explained Gen. Eric K. Shinseki, Chief of Staff of the Army until August 2003. “It is a new construct that holistically considers and reports every aspect of the Army that contributes to readiness, many that we didn’t formally consider before.” General Shinseki added: “Transformation is about much more than platforms and equipment, and readiness is about much more as well. The new SRS responds to this more encompassing and accurate notion of readiness.” 1 The mission of the Carlisle Barracks, Pennsylvania–based U.S. Army War College is “to prepare selected military, civilian, and international leaders for the responsibilities of strategic leadership; educate current and future leaders on the development and employment of land power in a joint, interagency, intergovernmental, and multinational environment; research and publish on national security and military strategy; and engage in activities that support the Army’s strategic communication efforts.” 2 The Army Command and General Staff College, based in Fort Leavenworth, Kansas, is dedicated to “develop[ing] leaders prepared to execute full spectrum joint, interagency, intergovernmental, multinational operations; advanc[ing] the profession of military art and science; and support[ing] operational requirements.” This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global from October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing and Balanced Scorecard 2017 Collaborative, a Palladium company 7 Balanced Scorecard Hall of Fame Profile: U.S. Army KEY RESULTS • Top leaders have a 360-degree view of strategic readiness and the wide range of factors that contribute to it. • For the first time, the Army has an enterprise management system that integrates readiness information for both its Active and Reserve components. • The BSC has helped the Army balance its key 21st century goal of creating the ideal force of the future while sustaining its ability to respond to the needs of today. The Army’s rapid scorecard rollout has occurred during combat operations in Afghanistan and Iraq. • Decision making has accelerated, as leaders from across Army organizations have begun reviewing strategic performance systematically and now have access to strategy maps and data through the Web. • New commanders now quickly gain a sense of ownership of their units’ respective strategies and are able to easily communicate the strategies to others. • The BSC has been integrated into budgetary operations, enabling units to make a clearer case for needed resources. • The Army has established a formal process and venues for reviewing and updating strategy and scorecards, as well as for addressing performance challenges. TAKEAWAYS • Cascade rapidly to capture momentum throughout the enterprise. • Early automation and visibility accelerate buy in. • Defining strategic measures requires cross-functional coordination. • To avoid resistance, explain how the scorecard will benefit the people who use it. • Relate the scorecard to current struggles your people are dealing with. And relate it to what your people already know about their business. • Recognize that people generally resist giving up control of their data. • Communicating once is not enough. • BSC processes should be “institutionalized” to ensure irreversible momentum. This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global from October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing and Balanced Scorecard 2017 Collaborative, a Palladium company 8 Balanced Scorecard Hall of Fame Profile: U.S. Army SFO SPOTLIGHT All Balanced Scorecard Hall of Fame organizations exemplify the five principles of the Strategy Focused Organization. The U.S. Army is especially noteworthy as an exemplar of the following SFO best practices: • Case for change clearly articulated: A study by the Army War College Study found that the Army’s readiness reporting system was inadequate, spurring the transformation effort. Leaders’ conviction about the need to upgrade readiness reporting was solidified following the September 11 attacks and the war on terrorism, which definitively showed the need to balance the long-term goal of building a nimble, technologically advanced future force with meeting current military requirements. The Army Medical Department’s successful scorecard experience also provided a powerful case for enterprisewide adoption. [Principle #1: Mobilize Change Through Executive Leadership] • New way of managing understood: The Army created an entire infrastructure around the Strategic Readiness System—its name for the BSC-supported strategic transformation effort—with an internal consulting function (SRS Operations Center) and a battery of tools and resources to support the BSC implementation. The Army has institutionalized BSC development and training, communications, and strategy review in ways that connect leaders worldwide and support the strategy. [Mobilize] • Corporate–SBUs aligned: The SRS team defined a rigorous rollout program and a fivestep chain of command to review scorecards and ensure the alignment of Level 1 and 2 BSCs to the Level 0 (corporate) scorecard. A standardized methodology and training have further supported alignment. Thus far, the scorecard has been cascaded down to 275 Level 2 (subordinate command) units. [Principle #3: Align the Organization to the Strategy] • Strategic awareness created: An aggressive, ongoing communications program cultivates awareness of the high-level strategy throughout the organization. The Army developed a worldwide classroom training program and online modules and has begun incorporating BSC and SRS education into curricula for future Army leaders. The SRS Update, a bimonthly newsletter, is dedicated to all things scorecard. The Army also holds SRS conferences and monthly teleconferences, enabling Level 1 officers to explore questions about SRS reporting and software and learn from one another’s experiences. It uses a wide array of vehicles to further raise strategic awareness among stakeholders, including articles in defense publications, memos to Congress, even trade show participation. [Principle #4: Motivate to Make Strategy Everyone’s Job] • BSC reporting system established: Besides implementing reporting software early on, the Army began linking the software to its measures databases. Its knowledge management portal, Army Knowledge Online, has a link to the software, and also features an SRS portal with education materials on the BSC and SRS. BSC users and owners have scorecard access organization-wide, enabling the readiness snapshot the Army sought from the start. [Principle #5: Govern to Make Strategy a Continual Process] This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global from October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing and Balanced Scorecard 2017 Collaborative, a Palladium company 9 Balanced Scorecard Hall of Fame Profile: U.S. Army THE U.S. ARMY STRATEGY MAP Provide necessary forces and capabilities to the combatant commanders in support of the national security and defense strategies Mission CORE COMPETENCIES Provide relevant and ready land power capability to the combatant commanders and the joint team Train and equip soldiers and grow leaders Stakeholder Perspective ESSENTIAL AND ENDURING CAPABILITIES Support global operations Shape security environment Execute prompt response Mobilize the Army Sustain land dominance Conduct forcible entry Support civil authorities Adapt/improve total army capabilities Internal Process Perspective Ready force for today and tomorrow Adjust global footprint Provide infrastructure Develop joint, interdependent logistics structure Optimize reserve component contributions Train the Army Communicate across the Army Equip the Army Sustain the Army Improve business practices Build the future force Organize the Army Man the Army Leverage technologies into key processes and equip the Army Improve acquisition with industries Optimize delivery of noncore competencies Adapt the institutional army Learning & Growth Perspective PEOPLE Resources Perspective SECURE RESOURCES Opportunity for service Sustain the right all-volunteer force Competitive standard of living Pride and sense of belonging Personal enrichment Leader training and development Secure resources (people, dollars, infrastructure, installations, institutions, and time) This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing andfrom Balanced Scorecard 2017 Collaborative, a Palladium company 10 Balanced Scorecard Hall of Fame Profile: U.S. Army TO LEARN MORE Editorial Advisers To learn more about the U.S. Army and its Balanced Scorecard program, see: Robert S. Kaplan Professor, Harvard Business School • Balanced Scorecard Report articles: David P. Norton President, Balanced Scorecard Collaborative “It’s in the Army Now: The U.S. Army’s ScorecardBased Transformation,” by Laura M. Downing, Senior Vice President, Balanced Scorecard Collaborative, and Lauren Keller Johnson, Contributing Writer, BSR September–October 2003 (Reprint #B0309B). Edward D. Crowley Executive Director–HBR Specialty Publications “Mobilizing for Well-Being: The Army Medical Department’s BSC Transformation,” by Avery Hunt, Contributing Writer, BSR May–June 2003 (Reprint #B0305C). Randall H. Russell Balanced Scorecard Collaborative “How and Why to Build an Internal Marketing Campaign,” by Patricia Bush, Principal, and Diane Koziel, Consultant, BSR May–June 2002 (Reprint #B0205C). Writer • Balanced Scorecard Hall of Fame Report 2004, which features a brief profile on the U.S. Army and the 12 other Hall of Fame inductees from 2003 (Product #5828). • The BSC library: BSC portal members with access to the library can search the keyword “U.S. Army” for a complete list of resources, including conference presentations and executive video interviews. (For information on becoming a BSC Portal member, go to www.bscol.com.) • www.army.mil ADDITIONAL RESOURCES • For more information on the StrategyFocused Organization (SFO) principles, visit BSC Online. Membership is free. Go to www.bscol.com/bsc_online. • For additional guidance on the SFO principles, and to learn about best practices in use at other organizations that have successfully executed strategy, go to www.bscol.com/toolkits. Here, you’ll find many resources available for purchase, including Strategy Execution Toolkits. • For access to the largest compilation of published materials on the Balanced Scorecard and the Strategy-Focused Organization, visit www.sfo.harvardbusinessonline.org. Publisher Robert L. Howie Jr. SVP, Balanced Scorecard Collaborative Director of Research Editor Janice Koch Balanced Scorecard Collaborative Lauren Keller Johnson Design Robert B. Levers About Balanced Scorecard Collaborative Balanced Scorecard Collaborative (BSCol), a Palladium company, is a global family of professional service firms that helps clients use the Balanced Scorecard to successfully execute strategy. BSCol offers a wide range of services, including education (conferences, publications, research), training (public seminars, in-house, online), consulting (strategy, performance, change), and technology (“BSC Portal™,” “BSC First Report™,” toolkits). To learn more, visit www.bscol.com, or call 781.259.3737. About Harvard Business School Publishing Harvard Business School Publishing is a not-for-profit, wholly owned subsidiary of Harvard University. The mission of Harvard Business School Publishing is to improve the practice of management and its impact on a changing world. We collaborate to create products and services in the media that best serve our customers—individuals and organizations that believe in the power of ideas. Ordering Information To order additional copies of this profile (in print or by download), call HBSP at 1-800-668-6705 (617-783-7474 outside the U.S.) and request product #1371 or visit www.sfo.harvardbusinessonline.org and insert the product number into the search field, or type in “Hall of Fame.” Here you’ll find a list of all available Hall of Fame profiles and other products for the Strategy-Focused Organization. © 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company. Quotation is not permitted. Material may not be reproduced in whole or in part in any form whatsoever without permission from the publisher. Balanced Scorecard Hall of Fame for Executing Strategy™ and Balanced Scorecard Hall of Fame Profiles™ are trademarks of Balanced Scorecard Collaborative. The trademarks referenced in this publication are the property of their respective owners. This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global October to April 2018. © 2005 by Harvard Business SchoolCampus, Publishing andfrom Balanced Scorecard 2017 Collaborative, a Palladium company 11 TRANSLATE STRATEGY INTO ACTION WITH THE BALANCED SCORECARD REPORT The ability to execute strategy is the most important capability an organization needs to quickly adapt and thrive in today’s global economy. But implementing strategy may be the single most difficult task you face. For twelve years, Strategy-Focused Organizations like Motorola, Hilton Hotels, Equifax, Thomson Financial, Siemens, and literally thousands of others have been using the Balanced Scorecard to transform strategy into action. Now you too can benefit from an invaluable tool that’s helping companies around the world get the most from their Balanced Scorecards—the Balanced Scorecard Report newsletter. Every issue is packed with the latest thinking of BSC founders Robert Kaplan and David Norton and their five principles of the Strategy-Focused Organization—principles that can help you translate ideas into action— MOBILIZE change through executive leadership TRANSLATE the strategy into operational terms ALIGN the organization to the strategy MOTIVATE to make strategy everyone’s job GOVERN to make strategy a continual process Each bimonthly issue of Balanced Scorecard Report takes you behind the scenes through case studies of actual BSC implementations. These case studies showcase organizations that have achieved tremendous results with the BSC and will help speed your own BSC program. The Balanced Scorecard Report is a resource you’ll return to again and again—subscribe today. 1-800-668-6705 bsr.harvardbusinessonline.org This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global Campus, from October 2017 to April 2018. The Balanced Scorecard Hall of Fame™ Profile Series Learn how each of these Balanced Scorecard Hall of Fame organizations became strategy-focused. Each individual profile provides a source of information on how to “do it right”, including a profile narrative, StrategyFocused Organization spotlight best practices, key results and takeaways. Chrysler Group Crown Castle International The City of Charlotte Economic Development Administration (U.S. Department of Commerce) E-Land Hilton Hotels Media General Mellon Europe Mobistar Motorola’s Government and Enterprise Mobility Solutions Royal Canadian Mounted Police Tennessee Valley Authority Unibanco To learn more visit: www.sfo.harvardbusinessonline.org or call 1-800-668-6705 (617-783-7474 outside U.S.) Product Number 1371 This document is authorized for use only in Kris Michaelson's MGT481-FA17C course at Colorado State University - Global Campus, from October 2017 to April 2018.
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Running head: BALANCED SCORECARD

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Balanced Scorecard
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BALANCED SCORECARD

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Application of five principles of a Strategy-Focused Organization
The five principles of a Strategy-Focused Organization are critical elements that must be
applied to any given successful project. For example, a project such as a Youth communitybased disaster management team must apply principles of a Strategy-Focused Organization. Like
in applying principle one of mobilizing changes through executive leadership is done by proper
executive leadership to see resource and mobilization of the project. The second principle of
translation of strategy to operational terms enable every member of Youth community-based
disaster management team understands well all key elements and the language expected of the
team. While principle three, Youth community-based disaster management team should be
properly aligned with the strategy which the management team had put in place. Additionally,
principle four rewarding and recognizing of individual efforts is a strategy that will see the
motivation of individual working behavior and lastly, in principle five, proper governing will see
a continual working of Youth community-based disaster management team that automatically
improves the performance of the team.
Recommendations for further improvement in team performance
There are various recommendations that can be used to improve further the performance
of the team. The first one is identifying the key needs of the team. Once all major needs of the
team are identified, then the resources available will be used to offer support to the organization
to their desired momentum. Similarly, when their need...


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