Wednesday, October 17, 2018

The Digital Board’s Balanced Scoreboard

With a balanced scoreboard, the top leadership team such as BoDs can become more confident and accurately judge the upcoming curves and obstacles on the path. 

Due to the “VUCA” digital new normal, the directorship in any organization must have the ability to inspire, guide, motivate, and innovate. The boards need to keep adapting to changes by the boardroom refreshment and taking advantage of effective tools to improve the board effectiveness. A well-balanced scorecard measuring key strategic performance indicators such as the business finance health and performance, process effectiveness and efficiency, innovation and learning capacity of the company, and customer satisfaction, etc, can provide board directors both information-based stories and holistic pictures for improving digital fluency and directorship influence and maturity.

A strategy oversight tool: A scorecard assesses the business progress to strategic goals. It is important to define the strategic level performance indicators which take into consideration the possible implication of the organization as a whole and the future orientation. A balanced scorecard approach is needed to measure all the relevant areas of corporate performance such as, how the company is dealing with its customers, employees, vendors, and communities; how it is performing financially, with a focus on how assets are being employed; and how it is cutting cycle time, improving quality and developing new products and services. It provides them with a holistic view about the progress of digital transformation, and it offers a way for a corporation to gain a wider perspective on its strategic decisions about the future business performance. The feature of the scoreboard is an effective communication tool to help the board capture the holistic picture, make sure that the strategy execution is on track. It enables feedback & learning, as well as adjusting the strategy accordingly.

A decision support tool: A Balanced Scorecard, correctly and fully implemented and used, is nothing more than a strategic decision support system, allowing the most effective initiatives to be planned for achieving the corporate goals and the appropriate corrective actions to be taken upon those initiatives when needed. A scoreboard is to provide the “balanced” view of trade-off variables and ensuring decision makers such as board directors understand and weight in on making effective decisions. You also need to consider, among other things, the overall strategic balance, dependencies, and constraints between components, and overall risk exposure. There are a lot of things (both “hard” factors such as policy, process, performance, and “soft” factors such as culture, leadership, communication) that come with business success, boards need to gauge diverse conditions and choices, in order to make the digital model transformation sustainable. The board’s oversight of appropriation - matching priorities and resources is to ensure that management can see and agree on what has been done and what should be done next all these with proper check and balance, make use of clear targets, communicate and embed prioritization mechanism into the multitude of management disciplines for unlocking performance and unleash digital potential.

A discussion facilitation tool: A balanced scoreboard is a very useful tool for facilitating board discussions and communication. Quality boardroom communication ensures that information is concise and update in enabling decision-making and goal tracking. It is a matter of leadership guidance to make sound judgments and steer the organization in the right direction. Thus, the important issue is how the board accommodates diverse opinions and how they assess them and converge the diverse thoughts into effective decisions. It is a matter of leadership guidance to steer the journey of digitalization in the right direction by understanding the purpose of doing that and engaging on that. The balanced scorecard measures key strategic performance indicators along with the things that drive those measures. The well designed balanced scoreboard with well-selected metrics can harness information-based communication and lead to continuous improvement. A balanced scoreboard is very useful for facilitating discussions and ensuring decision makers understand the various trade-offs and make the overall strategic balance, business dependencies, and constraints between components, individuals, and overall risk exposure.

With a balanced scoreboard, the top leadership team such as BoDs can become more confident and accurately judge the upcoming curves and obstacles on the path. With the support of measurement, the management can clearly evaluate each stage of change, and point out clearly wherein the business gets the benefit of taking up the activities so far to form a stepping stone for the big jump of digitalization.

0 comments:

Post a Comment