9 crucial steps to implement a winning framework based on BSC model

Step 1: Assessment

The first step in building a balanced scorecard process is to examine the organization's mission and vision, problems (pain), facilitators, and values. Step one also includes developing an organizational change management strategy and holding a targeted communications workshop to identify important messages, media outlets, scheduling, and messengers.

Companies can make use of other management tools to conquer this step (McKinsey 7S Framework, OKR, SWOT, Porter’s Five Forces, Ansoff Matrix, Competitive Analysis, VRIO…).

Step 2: Strategy Formulation

Based on the assessment, in the Strategy Formulation step, businesses must clarify their strategy. Step two involves developing parts of the organization's strategy, such as Strategic Results, Strategic Themes, and Perspectives, in order to focus on consumer demands and the organization's value proposition.

Furthermore, organizations are perceived both internal and external perspectives, which frame the organization as a system of specified parts and capabilities that collaborate. The titles of the four viewpoints (or perspectives) may differ significantly (depending on the type of business) from the original design: Financial, Customer/Stakeholder, Internal Process, and Organizational Capacity (or Learning and Growth). The views interact in a chain of cause and effect (or drivers and results), producing value from the inside out. The strategic themes and perspectives, when combined, outline and define an integrated strategy.

Step 3: Objectives & Results

Step three decomposes the strategic elements generated in steps one and two into strategic objectives, which are the fundamental building blocks of strategy and describe the organization's strategic intent. Objectives are launched and categorized at the strategic theme level, then categorized by perspective, connected in cause-effect linkages (Strategy Maps) for each strategic theme, and finally combined together to form one set of strategic objectives for the entire organization.

Step 4: Strategy mapping

The strategy mapping step develops cause-and-effect relationships between the strategic objectives, resulting in a "value chain" of how the organization's goods and services satisfy consumers and stakeholders. Plan Maps are created for each topic to ensure that a comprehensive strategy is in place to accomplish each strategic outcome, and these are then blended into a final organizational Strategy Map. A Strategy Map is a visual representation of the cause-and-effect links of objectives across the four perspectives, conveying the story of how the organization will accomplish the intended results.

Step 5: Performance measures

In Step Five, Performance Measures for each of the enterprise-wide Strategic Objectives on the strategy map are defined. This stage focuses on assisting you in developing the necessary leading and lagging metrics required to manage plan execution.

Step 6: Initiatives

Strategic initiatives that support the strategic objectives are established in step six. Ownership of Performance Measures and Strategic Initiatives is allocated to the relevant people and recorded in data definition tables to increase responsibility throughout the business.

Add-in stage: Roll-out, implement step 1-6

The organization-level balanced scorecard system is ready to be distributed to all employees after Step 6 is completed. The purpose of this stage of the process is to establish a coalition of employees who will start thinking more strategically and using the system to better inform decision making.

Step 7: Performance Analysis

Data is turned into evidence-based knowledge and understanding during the Performance Analysis stage. Effective analysis enables individuals to make better decisions, which leads to better strategic results. This stage focuses on monitoring and assessing performance in order to determine what works well and what does not, taking remedial action, and becoming a high-performing company.

Step 8: Alignment

In the Alignment stage, strategy is turned from something that only leaders are concerned about to something that everyone supports by cascading high-level corporate strategy to first business and support units, and then to individual workers. The Alignment stage generates scorecards for business and support units, as well as individual scorecards for each person or team.

Step 9: Evaluation

Step Nine involves evaluating the finished scorecard. During this review, the company attempts to answer questions such as "Are our plans working?" "Are we measuring the correct things?" "Has our environment changed?" "Are we allocating our money strategically?"