On Your Mark … Get Set … Change!

Today’s business environment isn’t what it used to be, but it would be cliché to say that the only constant is … change. You can blame it on the new millennium or the dramatic shift in our nation’s economy that paved the way for all-things-different. Regardless of how you slice it, two factors are unshakably certain: the landscape of business will never be the same again, and you can’t count on the same tried-and-true methods of getting your product or service to market.

It is without a doubt that the next decade will bring dramatic change to all aspects of the workplace, including demographics like the size of the workplace, age and income distribution; white and blue collar jobs; and products and services. Furthermore, as we become even more technologically astute, varying methods for creating productivity also will become different.

How do you begin to change? Start by understanding your clients, customers, employees and the changing face of the workforce.

The Bureau of Labor Statistics indicates there are about 127 million working Americans, but in just four years, this number increases to 133 million. While the 25 to 35 age group decreases about 10 percent, the Baby Boomers – 45 to 55 years old – will be about 50 percent larger. Americans over age 50 will be among the wealthiest we have ever seen, controlling $87+ trillion, or nearly 70 percent of the U.S. household net worth. White collar jobs will comprise more than 60 percent of the workforce, significantly reducing the traditional importance of blue collar jobs in the economy, and almost half of white collar jobs will pay more than $40,000 annually.

The 9/11 tragedy certainly spawned an increase in service-sector jobs, and according to the World Future Society, there will be a shift of 25 million workers into service and information industries. At the same time, generational groups like Generation X and the Echo Boom have changing priorities in the workplace. As more firms and organizations strive to recruit younger employees comprehending these two sectors is key.

Generation X (born 1965-1976), for example, came of age in times of recession, and experienced job restructuring and job scarcity before they even turned 30. Being the first technologically proficient, online and techno savvy generation, they exude entrepreneurism as the American dream. The youngest work group – the Echo Boom – was born from 1977 to 1994, so eligible workers are now in their mid-twenties. The Echo Boom generation is more relaxed about the corporate world than their Gen-X counterparts, but they will shape the workforce on their own terms and enter it with high expectations.

While this information probably comes as no great surprise, it does prompt the business professional to reconsider and redefine the way the company or organization recruits and retains employees. Any notion that perks like free parking, pizza parties and goofy golf will keep someone around until retirement must be completely erased. In fact, both the Gen-X and Echo Boom would frown on such so-called “perks,” and instead want to know how to make a difference for the company so that his or her own goals can be met.

Some of the changes employers may soon face include:

•	There will be more emphasis on job performance and less on college education.
•	Career paths will be less predictable and jumps within companies will be the norm; the job as a stepping-stone to something greater will be altogether different.
•	Expect more fluidity in assignments and less written job descriptions; these groups don’t want to be pigeonholed into a set of bulleted statements.
•	Praise and reward will be mandatory and immediate; we know Generation X wants quick gratification, so why not give it to them?
•	Fewer regulations like dress codes, a set start and quit time (9-5), and others will not inhibit individuality and originality.

Moreover, managers will coach, motivate and empower. They will direct less and less. There will be more self-directed teams, with team leaders instead of a “boss.” Self-directed team leaders will need a blend of instinct, on-the-job learning and patience.

While these observations may sound good on paper, reality is a different animal. To anticipate change, begin by assessing your company accomplishments, endeavors and other ways of conducting business, then determine how your company’s management style might mesh with the changing workforce. Write down a set of ideas about how you can change for the short- and long-term, and ask each of your key managers and employees to do the same.

Anticipating – even embracing – change will help you make the most of it. We can make a difference. Give us a call today.

Maybe Cuba Gooding, Jr. said it best, but it’s the performance and profitability professionals that are making good on this familiar statement. Business owners today are smart – and sometimes cautious – about working with outside consultants. Many demand to see a return on investment scenario prior to signing an agreement.

With the new tools available to performance measurement professionals, owners can immediately see how simple changes in strategic areas of their business can dramatically impact their bottom line. In short, these tools can show you the money.

Accelerating revenue growth through performance measures continues to be one of the fastest-growing consulting niches. Qualified professionals equip themselves with state-of-the art tools that work well for analysis and modeling, and offer business owners an easy-to-understand interface for viewing financial data.

On the cutting edge, this technology presents owners a real-time financial overview of his or her business as well as specific information about critical business drivers. Performance measurement professionals can help with “what-if” scenarios that will work to increase profitability. What if I increase sales by X percent? What would happen if I cut my inventory? How would cash flow be impacted if I resolve an accounts receivable lag?

Systematically, these professionals can break complex financial statement data into easy-to-understand performance measures. Financial information immediately becomes real and tied to day-to-day activities – and outcomes. Suddenly, owners know exactly what they must address to achieve their desired company goals.

The opposite is also true.

Company owners that have immediate objectives, including a certain cash flow threshold or an increase in profits, can look to these well-equipped professionals to provide the areas of business to target to meet desired outcomes.

Goal setting starts with describing exactly what you want to achieve and by when. New software efficiencies available to us combined with our knowledge of performance measures can help you plan and set goals, knowing you can achieve them if you stay on course. Let’s get started. Give us a call today!

In these times of economic turbulence, strategy execution has become the new mantra for executives who seek growth. Executives are demanding more of their strategy efforts; a strategy must be sound and executed before any benefits can be realized. The Balanced Scorecard explains that one major risk confronts all organizations who hope to achieve strategic success.

Is your organization achieving the promised benefits of its strategy? If not, it's likely that you are doing something wrong. You may have a flawed strategy that requires some rethinking. Or, perhaps your strategy is a good one but you are not executing it well.

In either case you can't really be sure what the root cause is until you know that your strategy is being implemented. You can't test the hypothesis of your strategy in theory; you have to test it in the field. 

If you have already implemented a Balanced Scorecard you are well along the path to discover whether your strategy will deliver the results you seek. Your strategy map lays out your periodic reports and strategic hypotheses, and review meetings provide opportunities to see how well these hypotheses are working. If you have implemented your strategy through the use of this management framework you should be well along the path to become a strategy-focused organization. 

But if you aren't sure if your strategy is sound – or if you are having trouble executing it –  it's not too soon to assess your approach to strategic management to understand whether you have done everything possible to achieve the promise of your strategy.

According to a study just released by Bain and Co., the Balanced Scorecard is now in use in approximately 60 percent of organizations around the world. This figure is up from 50 percent reported two years earlier (a 20 percent growth rate over this period). The study reports that companies are increasing their use of "compass-setting" tools such as strategic planning, benchmarking, and mission and vision statements as they search for growth opportunities in a tough economic environment. The Balanced Scorecard clearly provides an opportunity to integrate these "point" solutions.

Numerous factors explain the increased use of the Balanced Scorecard; foremost among them is the fact that it works. In a recent study of Balanced Scorecard usage in Europe, none of the 42 companies in the study currently using this management approach plan to discontinue use.* In fact, the level of commitment increases as usage becomes more sophisticated. Even for those just getting started, there is 100 percent commitment to continue the practice. Among the top five benefits associated with this management approach was the fact that it was shown to improve company results in the long-term.

Avoid the Pitfalls

But, in spite of a 60 percent penetration rate and rave reviews from demanding users, there is always the risk that you may not get it right. Many organizations fail to achieve the benefits of their strategy because they fail to make strategy execution a core competency. The pitfalls that await those who don't embark upon this journey with adequate understanding and executive commitment are well documented. Pitfalls that can put your scorecard program at risk include:

• Members of the senior management team are not committed
• Executives are not accountable for implementation
• The scorecard is treated as a one-time event

To help organizations successfully execute their strategies we have created a best practices database to document the management practices that contribute to strategic success. Organized around the five principles of the Strategy-Focused Organization (SFO) as defined by Drs. Kaplan and Norton, we have identified 28 strategic management practices that, when implemented correctly, improve the probability of achieving strategic success.  These management practices have been used to establish benchmarks for best practices.

Putting Best Practice to Use

In one example, a large financial services firm was enjoying significant strategic benefits nearly two years into its Balanced Scorecard implementation. However, they wanted to learn more about progress they were making, and whether they were truly on the path to breakthrough results.

The executive team compared its strategic management approach to the best practices benchmarks.  Based on the analysis, they were able to identify needed mid-course corrections that they have since used to enhance their strategic management practices. 

Despite the fact that this financial services firm was already achieving results, they made some surprising discoveries about their organization. For example, in their review of SFO Principle #1 (mobilize change through executive leadership), the firm came to realize that executive accountability for strategic initiatives was not well embedded and aligned at the right levels of the organization. They were unaware that this had not occurred to the extent that they expected.  If this had remained hidden, progress would have begun to lag as the lack of accountability failed to reinforce the right behaviors to drive results.

Likewise, after uncovering weaknesses in their processes and activities to review the strategy and update their Balanced Scorecard to reflect new realities, the organization enhanced its management practices to more thoroughly and accurately translate the strategy through to the organization. As well, similar changes were made under each of the other SFO principles to eliminate a number of bad habits that had crept into their management practices, reducing the organization’s potential to execute strategy to get results. 

The experience of this Balanced Scorecard firm demonstrates that even those who are doing it right can still make additional gains in their strategy execution capabilities by benchmarking themselves against best practices. The simple fact is that, in the real world, no one gets it right all the time.

Reprinted with permission. © 2003 Balanced Scorecard Collaborative, Inc.