Page 42 - Performance Leadership

Chapter 2 Traditional Performance Management • 31

not reveal the value drivers behind the complete value chain. A retailer
might for instance determine that the best way is not to organize its
scorecard by department and business unit, but rather by customer con-
tact channel. Another example of a nondepartmental balanced score-
card is the project balanced scorecard. Others have implemented
supplier scorecards or even personal scorecards.
Although the balanced scorecard is a very generic business concept,
figuring out how to actually implement it is harder than you might imag-
ine. People sometimes ask if it is “allowed” to move a few metrics from
the process perspective to the learning/growth perspective, as there are
“too many” metrics in the process perspective, and people sometimes
find it hard to create adequate metrics to assess growth and learning.
This of course is not the right approach. Others have done the opposite
of doing a checkbox exercise and have taken an extremely analytical
approach. In one case, the project team performed a broad and deep
investigation and came up with an ultimate set of metrics that proved
to be stable for over two years. According to this team, the metrics
showed how fundamental their analysis was. However, the sad truth was
that, in reality, the metrics weren’t actually being used and no change
requests came in. Scorecards should be living systems.

Organizational Learning
Throughout this chapter, I have discussed a number of performance
management methodologies, as summarized in Table 2.2.
With this overview of methodologies and approaches, the question
quickly arises of what the best methodology would be. The most pop-
ular methodology is the balanced scorecard; the most ubiquitous is
budgeting (although you cannot compare the two, as they are com-
plementary). But empirical evidence that explores the performance
impact of the balanced scorecard is extremely rare and much that is
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available is anecdotal at best. For every success story, there are mul-
tiple examples of projects that have failed or did not deliver to the
desired extent. However, this holds true across all performance man-
agement methodologies, not only the balanced scorecard.
The conclusion is obvious: There is no direct link between bottom-
line performance and implementation of a specific performance