The process of building a balanced scorecard—
clarifying the strategic objectives and
then identifying the few critical drivers—also
creates a framework for managing an organization’s
various change programs. These initiatives—
reengineering, employee empowerment,
time-based management, and total quality management,
among others—promise to deliver results
but also compete with one another for
scarce resources, including the scarcest resource
of all: senior managers’ time and attention.
Shortly after the merger that created it,
Metro Bank, for example, launched more than
70 different initiatives. The initiatives were intended
to produce a more competitive and successful
institution, but they were inadequately
integrated into the overall strategy. After building
their balanced scorecard, Metro Bank’s
managers dropped many of those programs—
such as a marketing effort directed at individuals
with very high net worth—and consolidated
others into initiatives that were better aligned
with the company’s strategic objectives. For example,
the managers replaced a program aimed
at enhancing existing low-level selling skills
with a major initiative aimed at retraining salespersons
to become trusted financial advisers, capable
of selling a broad range of newly introduced
products to the three selected customer
segments. The bank made both changes because
the scorecard enabled it to gain a better
understanding of the programs required to
achieve its strategic objectives.