Rio de Janeiro Brazil Balanced Scorecard: The connection between planning and execution Jairo Siqueira Less than

a third of organizations can fully successful in achieving its strateg ic plans. Difficulties in turn intentions into results afflict managers globally . Research conducted with over one hundred companies in the UK showed that about 80% of companies can formulate with clarity and their strategies. About 50% obt ained some success in implementing strategies and only 30% have succeeded in tur ning them into actions and meaningful results. Why does this happen? What are th e obstacles to achieving the strategic goals? How the Balanced Scorecard can hel p companies in overcoming these obstacles and improving the performance of their strategic plans? The answers to these questions can be found in understanding h ow the Strategic Plan is structured and what the obstacles encountered in each o f its five stages: Formulation: In this step the company makes the diagnosis of their internal and external environments and evaluates their advantages and comp etitive disadvantages. As a result, sets goals and strategies for achieving them . The causes of the failures at this stage are related to goals inaccurate or un feasible, and especially the lack of consistency and alignment between goals and strategies. Too often, ambitious goals require clear and consistent strategies to provide the necessary means to their achievements. Communication: A major dif ficulty of executives is to communicate their strategies and get the full engage ment of your team. Many fail to show clearly the relationship between cause and effect relationship between goals and strategies and expected contributions of e ach unit. As a result people continue doing what they have always done or engage d in initiatives irrelevant and not aligned with strategic goals. Deployment: In this step the strategic objectives are broken down into goals and action plans along the chain of command of the organization. In this process each unit looks at the next higher level objectives and seeks to answer the question: What are m y contributions to the success of the organization? The correctness of the respo nses depends on the perfect alignment between the various levels of command and requires a clear understanding of cause and effect relationships between objecti ves and strategies. Implementation: This step reflects the successes and failure s of previous stages. Goals and strategies clear, realistic, consistent and alig ned are guaranteed by the commitment of all people around the organization's str ategic objectives. The contrast creates confusion, disbelief and inertia. Evalua tion: Monitoring the implementation of the Strategic Plan to assess progress, id entify deviations from the goals and take timely corrective measures. Success re quires a system of indicators of performance-oriented strategic planning, that i s, measure and evaluate what is strategically important. Indicators misaligned w ith the strategic goals induce people to engage in objective wrong or irrelevant , and in some cases, to be rewarded for it. Prepared by Jairo Siqueira Blog: Email: siqueira.jairo @ This work is licensed under a Creative Commons Attribution-Noncommercial-Sealed the Derivative Works 2.5 Brazil. To view a copy of this license, visit http://cr Rio de Janeiro Brazil The Balanced Scorecard (BSC) provides a conceptual framework for translating bus iness strategy into a set of objectives and performance indicators organized int o four perspectives: Financial, Customer, Process and People. The BSC is a multi dimensional model that helps managers to articulate, describe, communicate, impl

ement and monitor their strategies at all levels of the organization. This is ac complished by connecting goals, initiatives and measurements to organizational s trategy. Walking through the five stages of strategic planning we can see clearl y how the BSC can help overcome the obstacles mentioned above. Formulation: The organization's vision through the four perspectives facilitates the construction of an integrated set of objectives and consistent. Financial Prospects and Cust omers guide the definition of objectives related to the results (outcomes) of th e business. Prospects for People and Processes underlying the definition of obje ctives related to the resources needed (drivers) for the feasibility of the desi red results, clearly establish the relationship between cause and effect relatio nship between actions and results. Communication: The Balanced Scorecard Strategy Maps includes, resource to help c ommunicate a unified vision of the strategy. They help people understand the log ic and intelligence strategy and how the different goals are related. More impor tantly, the Strategy Maps provide each individual unit and a vision of how your goals, projects and achievements contribute to the success of the company's over all strategy. Stock Split: At this stage the challenge is to make the message go through the entire chain of command without distortion and loss of coherence. E xplaining the logic of the overall strategy, the Strategy Maps guide each unit i n the unfolding of the larger goals into local objectives and translate them int o projects and tasks aligned with the overall strategy. Execution: The indicator s that make up the BSC convey a clear and strong message to the entire organizat ion on what is important, what is expected of each and how each unit or individu al is evaluated. The perfect understanding of the strategy, roles and responsibi lities is essential to achieve the commitment and engagement of all. Prepared by Jairo Siqueira Blog: Email: siqueira.jairo @ This work is licensed under a Creative Commons Attribution-Noncommercial-Sealed the Derivative Works 2.5 Brazil. To view a copy of this license, visit http://cr Rio de Janeiro Brazil Rating: Formed by a coherent set of oriented strategy, the Balanced Scorecard pr ovide the means to monitor trends, detect deviations from the goals, locate the root causes of unsatisfactory performance, seek explanations and answers. With i ts balanced approach between indicators (outcomes) and indicators of activities / actions (drivers), the BSC not only provides measurements of past events but e specially measurements of signaling trend (process indicators) that allow preven tive actions to correct faults before its effects reach customers and jeopardize the financial results. The value and usefulness of performance indicators are c losely related to the ability to communicate what is really important and influe ncing people to do things right. The Balanced Scorecard enables the assembly of panels of management indicators at all levels of the organization, both vertical ly and horizontally integrated. The model advocated by the BSC allows scrolling up and down of performance indicators that link the vision and strategy with the highest level actions in the tactical and operational levels, where the plans a re actually implemented. Prepared by Jairo Siqueira Blog: Email: siqueira.jairo @

This work is licensed under a Creative Commons Attribution-Noncommercial-Sealed the Derivative Works 2.5 Brazil. To view a copy of this license, visit http://cr