Cascading Balanced Scorecards Using ActiveStrategy Software

What Are the Benefits of Cascading Balanced Scorecards?
A single, top-level Balanced Scorecard will not drive results. A framework of linked, "cascaded" Balanced Scorecards from top to bottom and across the organization will.

It is through the process of Cascading Scorecards that organizations identify and map out the cause and effect relationships that exist between higher- and lower-level strategic objectives, as well as their measured outcomes (also called lagging and leading measures), ultimately linking every employee's performance to the top-level organizational strategic objectives, as identified on the top-level Balanced Scorecard or Dashboard.

Using ActiveStrategy Software to Manage Cascaded Balanced Scorecards
A linked framework of Balanced Scorecards, composed of related objectives, measures, and aligned improvement initiatives, is most powerful when enabled and automated by ActiveStrategy software, which was designed explicitly to help manage cascaded Scorecard management frameworks.

ActiveStrategy software, along with well-crafted and aligned Scorecard content, provides organizations with incredible insight into – and control over – overall business performance. Our software makes the linkages between top-level outcomes and underlying root causes apparent by facilitating multi-dimensional “drill-downs” across and into linked Balanced Scorecards. Users are just a click away from seeing what lies below a poorly performing area. See an example of how this works.


Just getting started with your Balanced Scorecard framework?
ActiveStrategy can help. We work with clients through every step of this process, from content creation, through cascading scorecards effectively, building the framework in ActiveStrategy software, and even coaching on effective review techniques.



Example of an ActiveStrategy Software User Clicking through Cascaded Balanced Scorecards to Manage Performance

Here is an example of how a review of cascaded scorecards with linked lagging and leading measures can help a business leader improve performance:

1. A Business Unit leader within fictitious automotive manufacturer Universal Motors sees a red stoplight indicator on the top-level Dashboard, warning that a critical lagging measure – Core Model Sales – is below goal and trending downward.
   
   
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2. Clicking on this measure in ActiveStrategy software reveals underlying information that exists on a cascaded Balanced Scorecard, including the two measures that roll up to create Core Model Sales (Sedan Sales and SUV Sales).
   
   
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3. The next layer of detail shows the "dimensional" measures that make up SUV Sales (i.e. SUV Sales by region). This reveals the specific area where the problem exists (SUV N.A.), but it still does not provide the Business Unit Leader with actionable information on the cause of the problem. Unfortunately, many organizations stop here, often because systems that are analytical or financial in nature are not designed to link causal measures that do not roll up mathematically.
   
   
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4. The next layer of information (which might be found on an Operations or Manufacturing Scorecard) begins to explain the cause of the slump in SUV Sales. Only by following the path of underperformance through cascaded Scorecards can this Business Unit Leader find that a problem with Crash Test Ratings is at the heart of this sales issue.
   
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At this point, she has discovered where the problem exists, what is contributing to this problem, and who is responsible. She can also see if an appropriate improvement initiative is underway, or contact the responsible team to discuss other options. She can also quickly and easily keep track of action items in the software, as well as create new or link existing objectives or measures “on the fly” if a new root cause has been discovered.

Need Help Getting Started?
ActiveStrategy can help you create this type of framework for your organization by helping you create or fine-tune a top-level Balanced Scorecard based on your strategic needs and by teaching you the techniques you need to cascade your objectives and measures effectively.

If you’ve already begun cascading scorecards, we can help you improve alignment, coach your team on effective review techniques, and even teach your teams the analytical problem solving skills you’ll need to fix the causal issues once they’ve been discovered.