Cascading Scorecards Throughout Your Organization

A single, top-level scorecard will not drive results. A framework of linked, "cascaded" scorecards from top to bottom and across the organization will.

As you cascade scorecards, you map out how strategic objectives and measures will be impacted by horizontally- and vertically-aligned areas of the organization. By the end, you'll have a powerfully predictive management framework. It will allow you to pinpoint problem areas while they're still quite manageable, rather than wait until the problem blossoms into a high-level emergency.

Creating this type of framework of linked scorecards requires a focused effort, plus a widespread understanding of some key cascading techniques. To drive long-term results, an organization must also commit to managing via this framework, which includes regular reviews of scorecard performance. ActiveStrategy helps clients with 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.

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, warning that a critical top-level 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 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 "decomposition" 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.

ActiveStrategy can help you create this type of framework for your organization by teaching you the techniques you’ll 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.

Learn more about:

• Coaching on Cascading Scorecards & Measures
• Tips on Driving Results from Your Scorecard Framework
• ActiveStrategy Enterprise Software
• Developing Performance Improvement Skills