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Mostcompanieshaveusedthebalancedscorecardasareportingformatatsomepointintheirpast.Mostofthemexpectedtheformat,whichbecamepopularinthe1980s,tosignificantlyimprovetheperformanceoftheirorganization.Unfortunately,veryfewrealizedtheimprovementtheyexpected.Whydoesthishappenatnearlyallorganizationsthatimplementthisreportingframework?Howcantheseorganizationsbuildontheirinitiativesandturnthemintosomethingthatactuallydrivessustainable,superiororganizationalperformance?Inmostcases,theshortcomingsthatpreventsuccesslaynotwithintheadoptingorganizations.Rather,theyareinthethoughtprocessthatleadsorganizationstobelievethatchangingthestructureoftheirperiodicscorecardreportswouldhaveanimpactonthedecisionsemployees—atalllevels—makeonthethingstheyfocusoneachday,andthewaypeoplenaturallyactandinteract.Thesethings,collectively,accumulatetocreateanaction-resultrelationshipbetweensuperiordailyperformanceandlong-termsuccess.Blamealsoshouldnotbeplacedontheseorganizationsforadoptingthisapproachtobeginwith.Theyarelookingforananswertotheirperformanceproblemsandmodernbusinessmanagementtheoristshavenotcomeupwithanewapproachthatbrings“managementbymetrics”intothe21stcentury,onethatclosesthegapbetweenstrategyandexecution,properlyfocusesemployeesandgivesthemeasyaccesstoinformationtheyneedtomakebetter,timelierdecisions.Businessleadersmusttransformindividual,tacticalemployeeactionsintoaunifiedeffortinwhicheverythingeveryemployeedoesfocusesondrivingtheperform-anceoftheentireorganizationonsuperiorexecutionandthelinkagetostrategicgoals.Thebalancedscorecardgetstheorganizationfocusedonmeasuringthings,which,inmanycases,doesmakeitagoodfirststep.Onceimplemented,however,thatfirststepwillnotcreateanysignificantchangeinwhatpeopledoonadailybasis,andthereforewillnotaffectoverallperformance.PeriodicityTochangeperformance,orwhatemployeesfocuson,criticalreportsmustbetimelyandrelevanttotheworkanemployeeperformseachday.TraditionalscorecardreportingisfoundedontheperiodicBottomLine:BeyondtheBalancedScorecardENTERPRISEPERFORMANCEMANAGEMENTNEWSissuanceofkeymetrics,oncepermonth,quarterorevenayear.Theexpectationisthatmanagementthenusesthisinformationtotakecorrectiveactionortopreventthesamethingsfromhappeningagain.Thiscreatesadynamicwheremanagersaremanagingthesamewayweplayfootball—callaplay,runit,huddlebackuptoseehowtheteamdid,thencallanotherplay.Offthefield,managementistryingtodeterminewhathappened.Unfortunately,businessisreallymuchmorelikegolf.Golfmovesataconstantpace,andsuccessisachievedbyunderstandingthecourse,planningyournextshotandexecutingitwelleachtime.Ingolf,consistentplayerswin.Similarly,inbusiness,employeesneedconstant,consistentreinforcementonwhatisimportanteveryday.Periodicreportingcannotservethispurpose.Current,up-to-dateinformation,deliveredeveryday,canconstantlyfocusemployeesonwhatismostimportantwithoutlettingthembecomestuckinthesandtrapstheywillinevitablyencounter.BetterFocus,BetterTomorrowThesereportsalsoservetoprovideallemployees,fromexecutivestoprocessowners,withabetterunderstandingofwhatisimportantandwhattheyshouldbefocusingon.Theyareaconstantreminder,showingemployeeswhatismostimportant.Theytakethefocusofffire-fightingandplaceitbackontheactionsthatwillmovetheorganizationintherightdirection.Asthisdynamicbecomesinstilledthroughoutmanagement,eachemployeebeginshelp-ingtheorganizationachieveitshigherstrategicgoals—whethertheyknowitornot.Traditionalperiodicreportingalsocreatesalaggingmentalitywithintheorganization.Sinceittypicallyusesmetricsthatarehistoricalinnatureandareusuallygeneratedmanually,theinformationisoutdatedbeforethemanagerevengetsit.Thesereportsrequiremanagerstospendmoretimejustifyingthepast.Real-timereportsshouldbedeliveringinformationthathelpsmanagersbetterunderstandthefuture.Theuseofreal-timeinformationallowstheresponsiblepartiestotakecorrectiveactionbecausetheycanseethesethingsastheyareoccurring—orseizenewopportunitiesthatwouldhavebeenmissed—andthenmoveontothenextproblemoropportunity.Itstayscurrentwiththem,andbecauseitisalwayscurrent,itisalwaysrelevant.RelativityHigh-levelnumbersthatareimportanttotheorganizationdonotresonatewithmanagerswhofocusontheirkeyprocessesoremployeeswhofocusonthetransactionsthatcrosstheirdesk.Theone-size-fits-allapproachoftraditionalscorecardswillnotfitmostpeopleintheorganization.Itisunrealistictothinkthatemployeeswilltakeintoaccounttheinformationpresentedonaonce-a-monthscorecardreportwhentheyhavetomakedecisionseveryminuteofeveryday.Tobeeffective,scorecardsmustbespecificallytailoredtotheorganizationalunitusingthemtomanage.Allofthemetricsthatemployeesareheldaccountableformustbemetricsthattheycanseeandaffect.Tomakethisdynamicwork,theorganizationmustunderstandtheconnectionbetweenstrategicgoalsandeachdepartmentorunit’sabilitytopositivelyornegativelyaffecttheirachievement.Oncethisrelationshipisunderstood,meaningfulmetricscanthenbecreatedanddeliveredspecificallytotheresponsibleemployees.Eachmanageroremployeeseesonlywhatheorsheisresponsibleforandwhatheorshecanaffect.Thistypeofinformationtakesconceptualstrategicobjectivesa