The Balanced Scorecard and Agile
All good best practices seem to fall by the way side as the seemingly newest, latest and greatest terms do their rounds. Always go back to the basics for a good foundation. For future success, leaders need to really believe in strategic management in order to remain sustainable and to leave a legacy. The balance scorecard can be used for strategic risk analysis, for strategic long term goals, for translating those long term goals into objectives and for strategic control.
Here are some risks associated with strategic management.
- leaders may spend too much time on operations
- leaders may not involve all relevant role players in the SWOT analysis
- leaders failing to create a culture of change
- leaders failing to create clearly defined and measurable objectives and outcomes
A strategy for managing these risks is the age old balanced scorecard even if Agile, SAFe, Scrum is your latest approach to strategic implementation.
- The vision risk – does everyone know our vision and strategy
- The management risk – are executives too involved in operations, are middle managers protecting their turf
- The resource risk – are budgets linked to strategy, do we have the capacity and the capability (skill, experience, tools, technology and lean processes)
- The people risk – are rewards linked to strategy, are we employing the best and retaining only the best
A balanced scorecard reflects the critical success factors – what must go right for success. and adds value for the strategic process. The four quadrants of the balanced scorecard drive performance.
- Learning and development- to achieve our dream how will we adapt to change and incorporate continuous improvement
- Internal business – to provide the best for our customers what processes add the most value and require maximum discipline for on-time quality delivery every time
- Financial – what must we succeed at in order to appeal to our shareholders
- Customer – what features, capabilities and services appeal to our loyal and very individual customers
The Balanced Scorecard and Agile? Being Agile means we are adaptable, flexible and welcome change. Agile teams prefer collaboration and interaction above mindless processes. The strategic process is ongoing and is in line with many implementation best practices such as Agile, the Quality Management Trilogy, Six Sigma, PMBOK , Scrum, SAFe, DSDM…… To aid the iterative strategic process requires great leadership who themselves are learned and developed in best practices. These leaders walk the talk and create the environment necessary for flexibility, for change, for adaptability. These great leaders collaborate, engage and ensure that root cause analysis is part of the culture within the organisation, a mind-set, an attitude among all employees, in order to ensure sustainability and great returns. Agile comes to mind. People get a little jittery when we talk about monitor and control within an Agile environment. Monitor is to track, review and report on performance. Control is to conduct collaborative retrospectives or lessons learned and to establish the root causes of deviation in order to take corrective or preventative measures. Agile concepts indeed.
The balanced scorecard for strategic control.
- was the vision translated and consensus obtained allowing people to act
- was communication and education conducted that promoted accountability
- was all investment and resource capability aligned to strategic initiatives
- were collaborative retrospectives conducted that reviewed strategy, obtained feedback and lessons learned – that tested assumptions and allowed the validation and adjustment of strategic objectives.
The balanced scorecard is a strategic management tool that can overcome the barriers to effective strategic management regardless of whether you use the Waterfall approach or the Agile approach.
Don’t let anyone fool you that Agile is adhoc, that Agile is unstructured, that Agile has no timelines!!!