Happy Friday!

You know what sucks? Massive powerpoint decks full of updates and nothing informative. It sucks to sit through slide after slide of updates and try to piece together where your project, group, or organization stands. It sucks to ask what seems like a basic question like, "Are we on target," and hear, "I'll have to get back to you."

The problem groups face is that there is a need for reporting, but nobody knows what to report on or how much to report. So you wind up with reports on what is easy to report on, and you have to hope it's enough.

There is a tool called the Balanced Scorecard that I bumped into when I was going through some books on Beyond Budgeting, and it has always stuck with me.

The concept is simple enough. A balanced scorecard targets four areas that the group cares about. So they could be, customer success, operational success, financial success, and growth/innovation success. These are examples. Each of these categories are large and important enough that if one of these pillars suffers or gets out of balance, it will have significant consequences. You can also see how they can each affect one another. This is where the balance part comes from.

Now, within each of these targeted areas, you break it down into a small set of goals. The temptation will be to make each goal take the form of "Complete x project." This is a mistake. Look past the project completion to the intent behind it. I promise there is a substantial desired impact beyond how much work you can do. That desired impact is what you want to focus on.

This, of course, assumes these larger goals are not obvious, and they often aren't.

Once the goals in each target area have been identified, you will decide what KPIs or signals to examine to determine whether you're moving in the right direction.

With that all done you now have a consistent way to report on what is truly important. The questions people ask will be ones that prompt significant decisions. For example, instead of talking about delivery risk, you now might talk about how a competitor just launched a product that makes what you do irrelevant, and the real decision is to pivot or kill the project entirely.

What is interesting is that you can create these scorecards at different levels of the business that all align back to the highest level of strategic importance. So if at an executive level, they're talking about revenue growth, down in the code mines, your work might be directly related to that, and your group's balanced scorecard can show how you are attempting to make movement there.

If you'd like to read more on the concept, you can read an article here, and just search Harvard Business Review for "Balanced Scorecard," and you'll find plenty of information.

You might be wondering what this has to do with Beyond Budgeting. The Balanced Scorecard is a tool they use to replace a lot of budgeting and accounting conversations. The Balanced Scorecard became a tool leaders used to decide where to continue investing and where to intervene or pivot their efforts instead of cumbersome annual budget planning.

Sincerely,

Ryan