Another best practice, we think, is prioritizing initiatives. The problem that a lot of companies have is they have 400 projects. They couldn’t say no. There is no disciplined way of them saying no. Now they have a disciplined way. That was the big value of the balanced scorecard or one of the values.
So this is what we do. We start out with the candidate initiatives, develop selection criteria and then prioritize those using a waiting scheme. But we have seen that as a best practice.
How many of you are familiar with double-loop learning, right? This is where we start at the top here with our assumptions, build our strategic themes down into our balanced scorecard that drives the budget formulation process. From the budget formulation, the annual operating budget, we get our programs, projects, services, whatever we are doing in our business, leading us to outcomes.
What do we actually accomplish? Then we can go back through the costing side of the equation and then back up to the balanced scorecard and test our assumptions. So there is a link between the planning side of this and the management side of this that planning drives management. Any other best practices? I think we only have a couple of minutes left here.
Okay. Some challenges, we talked about sustainable engaged leadership. Folks, the history of strategic planning works against us. Give it to the planning shop, and they will build it for us. Just get a few smart people off in a corner someplace on a weekend at a nice resort, and they will write this sexy clever colored document and share it with everybody.
Boy, this is a big one. I was in the Pentagon talking to the head of Strategic Planning, and he was talking about goals, goals, goals. I literally walked across the hall to one of the program offices, and this guy was using objectives the same way the guy across the hall was using goals.
Folks, get the dictionary right on day 1. It doesn’t matter whether you use our definitions, or you use the collaborative definitions. Agree on something so that they are the same. But the point is there are different terms, different uses of the language in this stuff and so be real careful on how you use it. We try not to use the word goal very often because so many people get goal and objective mixed up, and that's why we use strategic result for example. It’s an easier term for us.
The marathon, make sure you are not just communicating with yourself and a few folks thinking it’s only about measures and what you are currently doing, choosing software too early. This a crucial one, not rewarding success and desired behaviors, managing change and not following through. That's the execution piece of that, isn’t it?
Moving on to obstacles, there is going to be resistance to change. The key is to communicate benefits clearly. Put in the language of benefits rather than the language of the tool that you are using. Most of us are scared of being measured.
Make sure we use this system to improve, not to punish. You have heard many speakers talk to that. There is always a fear of a new system so keep this one simple. There is a disbelief that any real improvement is going to result, and we want to get some early successes to disprove that.
Old timers are pretty good at gaming the system. They know where stuff is buried, and they know where to hide stuff so make sure you get a process to measure the critical thing so it’s harder for them to game it. Make the information useful and used.
Finally, a scorecard work is a separate activity from normal business operations. The organizations that have been using the scorecards the longest, they don’t talk about working on a balanced scorecard then go doing my real work, right.
It’s integral to the process. It is the way we plan. It is the way we manage, end of discussion. You don’t have to raise a flag and say balanced scorecard every time because it’s the way you do business. Make sure you don’t set your measures independently of the framework.
Any other obstacles? Sustainability, keep your emphasis on the results you want and the strategy you are going to use to get there. Think of the balanced scorecard as your strategic planning and management system, not just a strategic management system.
If you harness the discovery process of hearts and minds, you can really move a lot, and the balanced scorecard can take on a much wider meaning than just narrowly focusing on the execution, on strategy execution. You have got the best and the brightest. Take advantage of it, and go a little deeper. Make sure leaders are walking the talk so they don’t disrupt this whole thing. You have seen that before.