Kim Wizard Example Paper

Randy Davis July 11, 2009

Kaplan, R.S., & Norton, D.P. (1996, January- February). Using the balanced scorecard as a strategic management system. Harvard Business Review, 1-12.

In analyzing Kaplan and Norton’s article on using a balanced scorecard I will look at two of the four processes discussed in the article. The two processes I will discuss are communicating and linking and feedback and learning. I would like to state something very simple that I believe makes the balanced scorecard so effective. It is visual, something you can see and touch. It communicates the vision of the corporation to all levels within the corporation by being able to have specific measurements at all levels that relate back to the mission and vision of the organization. We use a scorecard at E. D. Bullard Company and I will discuss aspects of it as I look at the two processes mentioned earlier.

The process of communicating and linking lets managers communicate their strategy up and down the organization and link it to individual objectives. The individual scorecard has to have teeth to it. It has to be both motivating and obligating. The article states that by tying compensation systems to balanced scorecard measures, it becomes a powerful lever. I have been in sales my entire working life and I would not take a job that did not link my financial compensation to my performance. I believe that it is the strongest motivator. My personal scorecard at Bullard is broken down into four categories; channel management, market penetration, boosting efficiencies, and developing talent. My monthly and quarterly bonuses are linked to all four of these. My primary compensation is based upon sales and sales growth but I do receive a substantial reward based on my ability to drive the metrics in these four categories. Bullard’s mission is to have better products than our competition and to have a better trained and more professional sales staff. Under my developing talent tab on my scorecard, I am required to complete one significant external training course, maintain my membership in two trade associations, and participate in all division sales meetings and web meetings. Bullard also encourages its employees to pursue advanced degrees by providing tuition reimbursement. The article also mentions the risks that are associated with this. The biggest risk is the unexpected consequences that may arise. An employee may neglect certain aspects of his job in order to perform well in the area he is receiving rewards. A company has to be sure the right things are being measured and that it has valid and reliable data.

The second process to discuss is feedback and learning. In today’s unpredictable economy, a corporation has to have the ability to know at any point in time whether their strategy is in fact working. The metrics on my scorecard are updated monthly and my manager and I know exactly where I stand. I know within a matter of a few weeks whether my efforts in the field are driving the metrics on my scorecard to the desired level. Our national sales manager meets with all of us regional sales managers once a quarter to analyze our most recent results. My scorecard facilitates the strategic review and the learning that needs to take place as a result. This learning process goes both ways in our organization. I learn individually and expect my national sales manager to learn ways to remove obstacles in order to help me achieve the desired results. Our scorecard system is invaluable to our organization because it drives individual employee efforts toward our mission and it stimulates senior management to constantly look for cutting edge ways to make that possible.