Book Review

The idea is that many other factors besides money can be measured so that organizations can improve their performance.

This concept is applicable to school districts where measurement's "two trick horse" of test scores and fiscal restraint tramples the educational progress of our students.

The Books' Topics:

• What is the Balanced Scorecard?


• How to get started using the Balanced Scorecard


• Deciding what is Important


• How to Measure


• Displaying (and using) Measures


• Keeping the Scorecard Relevant


• Problems and Issues from Using the Balanced Scorecard

The central themes of this book are:

• Improving organizational and business performance requires measurement. But measurement restricted to financial variables is not adequate for managing an organization


• To make a measurement process work, you have to measure the right things


• Measuring the wrong things leads to lots of wasted time and opportunity costs


• The Balanced Scorecard approach does not work in every case, but most organizations can see improvement when the Balanced Scorecard process is implemented

Keywords:

• Balanced Scorecard


• Performance Measurement System


• Key Drivers


• Targets, Measures and Desired States

Main Idea:

The idea behind the Balances Scorecard is basic and simple, i.e., what organizations and companies measure gets done. But, the right things have to be measured.

Once the right things are identified, the measuring process has to be workable so that the measuring does not interfere with ongoing operations. The measuring process cannot be so cumbersome and complex that it ties up managers and employees so that they cannot get their work done.

Thought and planning are necessary before a system is implemented because it is possible to measure the wrong things and actually diminish progress.

The buy-in of all stakeholders also is necessary if the right measurements are going to be used to effect worthwhile change.

Quotes:

"Over the last 10 years, companies have come to realize that they can no longer manage using financial measures alone. To survive and prosper, companies have to track non financial measures…The Balanced Scorecard is a framework for designing a set of measures for activities chosen by you as being key drivers of your business. For the scorecard to be effective, you will need to display these measures and manage the resulting actions to improve performance." (p. - 5)

"Unless you measure accurately and consistently, the whole ethos of measurement will be undermined. Before you start making comparisons between departments or between your company and someone else's you need to establish your current position through clearly defined and appropriate performance measure. "(p. -

"How many times have you seen a well-constructed strategic plan, created and read by a few but ineffectively communicated across the business? Performance measures can rectify this, making the goals and objectives explicit, bringing the strategy to life and communicating direction throughout the whole business." (p. - 9)

"Having a set of measures is one thing, but the real benefit comes from reflecting on what the measures are telling you and deciding what action you should take. " (p. - 9 & 10)

"The Balanced Scorecard was originally developed for the business sector, for profit-oriented organizations. However, there is no reason why it shouldn't be used for charities or public sector organisations. [sic]" (p. - 17)

"Perhaps the most important factor for success in using the Balanced Scorecard is ensuring that you are measuring the right things. If you measure the wrong things you can channel energy and time into activities that are not contributing to the success of your business, with damaging results." (p. - 27 & 28)

"Many people think that the process is over once you have set the objectives, but this is not the case. " (p. - 39)

"Clear thinking is vital for deciding what to measure."(p. - 40)

"Although it is useful to consider the design of each measure individually, you will find that measures often overlap in the application. It is not uncommon for more than one measure to be use to track one dimension of performance. " (p. - 55)

"Deciding what to measure is not enough. You must also take care in designing the measures themselves." (p. - 57)

"If positive action is to be taken after analyzing the measures then everyone concerned with improving performance needs to fully understand what the results mean." (p. - 60)

"When deciding what to measure, give some thought to the amount of time each measure will take -- if it is very time consuming is it really worthwhile or can it be measured less often? " (p. - 68)

"Concern about what will happen if results aren't good can lead to distortion of the figures or excuses as to why the measures are no good. Of course some of these excuses might be genuine, particularly at the early stages before wrinkles have been ironed out. The important point is for individuals to see that the results are being used objectively for improving the business and not to allocate blame…No matter how carefully you design your measures, problems in collecting the data can distort your results" (p. - 68 & 69)

"In fact, each time you review and update your strategic plan, the measures should also be reviewed to ensure they remain congruent. This may well mean dropping some well-established measures and implementing new ones. If this isn't done, then don't be surprised if the strategy fails, The [sic] old measures and reporting system will ensure that what has been decided is never implemented." (p. - 75)

"Another important way to keep your scorecard going is to weave it into the everyday processes of your business rather than to regard it as an initiative in itself…The danger is that if you create the Balanced Scorecard as a separate initiative it will receive attention only for a short time and then will fade when the next fad appears on the horizion. If you link initiative or processes together so that they are complimentary you develop a certain strength and cohesion and the positive results are cumulative. This helps build management competence in running the business." (p. - 78 & 79)

Issues Addressed by the Book:

This book summarizes the thinking behind using more than financial data in managing a business.

The key to understanding how measures can be used to improve the function of an organization is to understand that an organization operates from more than one perspective.

The book itself recognizes that the original Balanced Scorecard does not address the perspectives of people, suppliers, regulators, or other entities. One of the biggest omissions for the original scorecard was the perspective of competitors.

In the case of school districts, it is clear that the teacher's perspective has been absent in the "drum-beating, circus parade" know as "benchmark testing."

Sidebar

For further examination of the issues affecting Benchmark Testing, see our article, The Flaws, Fallacies and Foolishness of Benchmark Testing.

Note: Benchmark Testing, as performed by most schools, fails to rise to the level of being called a Balanced Scorecard.

The Book's Shortcomings:

If you consider the format as a digest-volume that is intended to cover a complex subject in seven bite-sized chapters, this book doesn't have any shortcomings.

The book gets the job done, is easy to read, and the main points are highlighted.

If there were a criticism, it would be that the book doesn't dig deeply enough into the difficulties of implementing any initiative where people's behavior must change. The Balanced Scorecard assumes that all folks who are working for an organization want success and assumes that these individuals are willing to make whatever changes are required to obtain that success.

Observation of human nature, in school districts and without, verifies that this assumption about people's willingness to changes is unfounded.

Comments:

The author gets a number of items correct about school districts, even if his information targets businesses. These include warnings about…

• Measuring the wrong thing


• Misusing data and assigning blame


• Not understanding what the data mean


• Measuring the same old stuff, even after the plan changes


• Measuring only items that fit the perspective of one group, especially if another group is responsible for the implementation of the organization's mission

The frustration in reading a simple volume like Balanced Scorecard in a Week is knowing that the challenges facing school districts could be resolved with simple thinking and basic common sense…but knowing that the changes needed just won't get done.

Summary:

The book also allows us to interpolate the difficulties that school districts will face when coming up with key perspectives. There will be so many perspectives, so many divergent views and so little knowledge behind these divergent opinions that nothing is apt to be done.

This book is an easy read, and offers a common sense approach to identifying strategic goal, discovering measures of progress toward those goals, and consistently executing improvements until those goals are reached.

Rating (Four Point scale):