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2GC completed a major Balanced Scorecard design project with FS Co, a large UK financial services company, and then returned to help them update the content a year later. The initial design work, which is the main focus of this case study, was spread over a four month period and involved the development of a Strategic Balanced Scorecard for the Executive Management team, and the development of cascaded Balanced Scorecards in three Business Units, and three corporate functions.

This case study note has the following sections:

Client need

The company had three main Business Units:

  • Investment;
  • Administration Services;
  • Trustee Services.

And three corporate functions:

  • Finance and Business Assurance;
  • Human Resources;
  • Information Technology.

Each of these had contributed a strategic review and a plan into a corporate strategy project known as CONNECT. However, this was primarily a bottom up process which did not have any strong guiding principles from the Executive Management level. The executive management felt that a strategic approach, as enshrined in 2GC’s 3rd Generation Balanced Scorecard methodology, would help to provide this and also allow them to embed the strategy in the organisation.
FS Co wished to complete all the design work in a period of four months.

Process followed

2GC Active Management has had many years’ experience of large scale Balanced Scorecard design and implementation projects. The main drivers of its approach are as follows:

  • Involvement of the users in the design process - if the Balanced Scorecard is for the Executive Team then members of this executive should be in the workshops to design the content;
  • Starting with the end in mind - using our proprietary concept - the Destination Statement - a simple statement of ‘what success looks like’ at a future point in time - normally 4-5 years ahead;
  • Visualising the priorities for the next 12-18 months using a Strategy map or Strategic Linkage model which shows cause and effect between Activities and Outcomes;
  • Documenting priority Activities and Outcomes with detailed milestones and metrics and targets to allow the monitoring of progress;
  • Setting out a clear review process for performance against the Balanced Scorecard designed.

In order to test the approach planned and interview key personnel 2GC were awarded a Scoping Study at the start of the process. This proved the appetite amongst the Executive of FS Co who opted to pursue a four workshop process sandwiched into a two month period.

Corporate Balanced Scorecard

FS Co’s Balanced Scorecard was designed by its Executive Team during four whole-day interactive workshops spread over a period of two months. Between these sessions a project team, comprising consultants from 2GC and the sponsoring director and a project manager from FS Co, worked with the directors to ensure that:

  • The directors were well prepared for each of the working sessions, and
  • Where work was required of the directors between workshops (for example the provision of additional information about definition of objectives or measures agreed during a workshop) that this were done efficiently and effectively.

The multi-workshop approach to Balanced Scorecard design has been used by 2GC since its founding in 1999, and over this period has evolved into a finely tuned and reliable process that allows a group of directors to craft their own Balanced Scorecard design quickly, efficiently and reliably.  

For FS Co these workshops ran as follows:

Workshop 1 - Developing a Destination Statement for FS Co 

An interactive workshop during which FS Co’s  directors’ agreed upon what they and FS Co’s key stakeholders would consider to be a successful outcome for the organisation for the end of four years of strategy implementation work.

Workshop 2 - Building a Strategic Linkage Model for FS Co

Another interactive workshop for the directors of FS Co during which the Destination Statement drafted in the first workshop was finalised, and a set of priority short/medium term activities - selected. A set of related short/medium term outcomes were also agreed (to be used to confirm the priority activities were having the required impact), and the two sets of objectives were plotted on a cause-effect diagram called a ‘Strategic Linkage Model.

Workshop 3 - Identifying measures and milestones to track FS Co’s  progress towards its objectives.

A third interactive workshop for the directors of FS Co, during which they finalised their design of the Strategic Linkage Model, confirming their choice of priority objectives and assigned accountability for each objective among the directors. They also began the process of identifying and documenting performance measures and project milestones that they could subsequently use to track progress towards their objectives.

Workshop 4 - Validation of the whole Balanced Scorecard design.

A final interactive design session for the FS Co directors, during which they agreed upon performance targets for many of the measures and project milestones to be used to track FS Co’s progress towards the agreed short/medium term objectives (targets for some new measures could not be set as baseline information for the measure was not available). The directors also agreed upon the manner and timing of the Balanced Scorecard review process they would use - quarterly meetings chaired by the CEO.

The corporate work introduced the business unit and function leaders to the 2GC approach and enabled more efficient cascading of this Balanced Scorecard to their departments. It also allowed them to be confident that this would enable to align their operations with the corporate CONNECT strategy.


In addition to the development of a Balanced Scorecard for the Executive Team itself, FS Co’s leadership decided to create additional localised Balanced Scorecards for the major organisational units that made up FS Co. The aim was twofold:

  • to allow each unit to clarify (and agree with the executive team) what it would need to do in order to contribute most effectively to the FS Co corporate strategy (as documented in the executive level Balanced Scorecard);
  • to provide the FS Co executive team with clearer and more concise information about the progress each functional unit was making against its agreed local strategic objectives.

The ‘cascading’ of the Balanced Scorecard used a standard approach based on a simplification of the multi-workshop approach used by the executive team. The reasons for the use of the simplified process are straightforward:

  • much of the strategic context for the functional unit had already been set by the executive team, so the management teams of the organisational units could focus on local interpretation of the strategy rather than the development of new strategic ideas;
  • by design, the scope of each organisational unit was narrower than that of the executive team - the managers of the units were able to identify their ability to contribute to/respond to strategic initiatives quite quickly.

Accordingly a shorter two workshop approach was designed for each of the major organisational units. FS Co has six such units - three Client facing Business Units, and three internal service providing Functional Units.  

The approach used for the cascaded Balanced Scorecards was as follows:

Business Unit Cascade

Initial work - prior to the first working session with a Business Unit’s leadership team, a draft ‘Contribution Statement’ for the Business Unit was prepared by the Business Unit’s Director, based on previous unit strategic plans and the content of the newly created executive team Balanced Scorecard.

Workshop 1 - a whole day workshop with a very similar focus to “Workshop 2” of the process used by the Executive Directors. During the session, working from the Contribution Statement drafted by the unit’s Director, the unit managers agreed upon the Business Unit’s target outcomes for end 2015, and drafted some priority activity and outcome objectives for the unit for the 2011-12 period each of which were assigned to one of the unit managers. The collection of objectives were plotted on a unit level Strategic Linkage Model;

POST WORKSHOP 1 - The unit managers worked independently on their assigned objectives to develop detailed descriptions of the priority objectives identified in the workshop, and identified relevant measures and targets and project milestones that could be used to track progress against these priority objectives;

Workshop 2 - A second whole-day session for the unit management team to validate the work done independently by the unit managers. The workshop concluded with a review of the unit Balanced Scorecard in its finished form, and agreement on the Balanced Scorecard review process to be adopted by the unit.

Function Cascade

The functional Balanced Scorecard design process was similar to that used by Business Units, but that each of the two workshop sessions was attended by all three functional management teams: the teams worked in parallel/concurrently during the workshops.  

By having the three functional units working in the same space, it was easier to ensure alignment of contribution towards objectives between the units: duplication of activity was avoided.  However the facilitation skills and resources required to run each workshop were considerable - each workshop was supported by three facilitators (one for each Function).  (The Strategic Linkage Model for the HR function is shown above).

Challenges faced

Certain aspects of the work threw up challenges to the client and the project team:

  • Split office location with directors based both in the North of England and London - this meant that some design workshops suffered because time was limited due to transport delays caused by the weather in two instances and by the need for attendees to return to their home location;
  • Ensuring that sufficient detail was completed by the right people e.g. directors - we encountered the ‘law of diminishing returns’ as work was being done without sufficient access to delegates of the Directors who were more aware of the day to day detail;
  • Timescale for cascades - the timescale requested by the client CEO was very tight in terms of getting the dates for workshops in people’s diaries and in ensuring the completion of the necessary detail by FS Co managers between workshops.

Notwithstanding these pressures (and what large project does not have such pressures?) much was achieved to time and budget as outlined in the client’s own words shown in the ‘Outcomes achieved and conclusions’ section.

Client update after six months...

The client was very positive about progress being made with:

  • Corporate (EMG) Balanced Scorecard review having taken place in early June - quarterly planned thereafter;
  • Board and Trustees’ Executive committee were both fully informed and supportive of the use of Balanced Scorecards;

As regard the Cascaded Balanced Scorecards:

  • Administration BU - meeting to review its scorecard monthly
  • Investment BU - review meeting every other month
  • Trustee Services BU - first meeting planned for late June

Lastly the Dashboard design project had started - that would provide integrated Balanced Scorecard reporting in due course.

Reset Work a Year Later

About 18 months after usage of the Balanced Scorecard began, FS Co asked 2GC to organise some resetting of the objectives on their Balanced Scorecards to allow for:

  • Some reorganisation between the three Business Units;
  • Changes in the way Corporate Services was managed;
  • Adoption of a new dashboard to collate and report on BSC results; and
  • The natural alteration to priorities as time elapses (some Activities already completed, others growing in importance).

This work involved 2GC discussions with the coordinators of each Scorecard and then single one day workshops with each of the Management Teams to:

  • Update their Destination Statements by one year;
  • Reassess priorities and brainstorm new ones for actions to achieve them;
  • Amendment to Strategic Linkage Model objectives - mainly activities as outcomes are mostly still applicable.

Having completed this work FS Co updated the Balanced Scorecards with revised deadlines for Activities and targets for the quantitative targets agains the outcome metrics.

Outcomes achieved and conclusions

Our design work and assistance to this client in getting multiple cascaded Balanced Scorecards up and running successfully shows the efficacy of the approach used, as witnessed by these quotes from the client:

  • I really enjoyed the process" - active participation from the management teams who will use the Balanced Scorecard is essential if the resulting tool is going to be used effectively. An enjoyable and understandable design approach - such as the 3rd Generation Balanced Scorecard approach used by 2GC - helps ensure this kind of positive engagement is achieved;
  • "We should be pleased at what we have achieved in the four months - seven Balanced Scorecards all but complete" - use a time-efficient design process. It is important to do Balanced Scorecard cascade work to a high standard, but usually the amount of time available within the organisation to complete the required work is limited. Using an approach that was tailored to reflect this constraint and followed best-practice Balanced Scorecard design principles, this organisation was able to complete the bulk of the required design work very quickly;
  • "I clearly see the read through from the Business Plan and helped setting my team's annual objectives" - focus on achieving clear goal alignment. Strategic alignment implies the adoption by the sub-units within the organisation of broadly similar goals; but we design most organisations with units chosen to allow specialisation (e.g. of function or geographical focus). How can an operational unit and a functional department share similar goals without these goals becoming vague or generic? Balanced Scorecard cascading using aligned 'contribution statements' ingeniously allows for clear alignment behind common strategic goals, while allowing each management team to identify specific objectives to pursue that are uniquely focused on the issues of their own part of the organisation;
  • "It helped bring my team together" - remember to build alignment within each team too. While the focus of thinking about how to cascade Balanced Scorecards is about achieving the difficult balance between alignment and local relevance at the unit level, it is important not to forget the importance of building consensus and buy-in to the emerging Balanced Scorecard within each management team. This level of engagement can be achieved by using the same kind of interactive design processes developed and proven in the 3rd Generation Balanced Scorecard design approach.

In our reset work we learned how these Balanced Scorecards are being used to keep the business on track against its strategy and successfully to help embed organisational developments in the day to day performance monitoring systems.