{"id":29030,"date":"2013-10-29T15:58:44","date_gmt":"2013-10-29T19:58:44","guid":{"rendered":"https:\/\/balancedscorecard.org\/staging\/?p=29030"},"modified":"2022-08-23T11:06:23","modified_gmt":"2022-08-23T15:06:23","slug":"dear-abby-gail-how-much-is-too-much","status":"publish","type":"post","link":"https:\/\/balancedscorecard.org\/staging\/blog\/dear-abby-gail-how-much-is-too-much\/","title":{"rendered":"Dear Abby-Gail: How Much is Too Much?"},"content":{"rendered":"

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There has been a lot of interest in my recent blog post:\u00a0 \u201cBalanced Scorecard Gone Bad: What\u2019s that Funky Smell?<\/a>\u201d\u00a0 Several people have posted comments and questions in various forums, but one in particular deserves special attention.\"\"<\/p>\n

From Gary:<\/em><\/strong>\u00a0I believe a key point in your message is that a strategy is never static due to external changes (e.g., competitor moves, new technologies), so it will require continuous adjusting.\u00a0 But this raises a different question. Since as strategic objectives change or the emphasis of what to accomplish within strategic objectives change, this means some KPIs may be dropped and others added (or their weightings may need to be tweaked). As a result, how much change in KPIs can an organization tolerate?<\/p>\n

Dear Gary<\/strong>:<\/em>\u00a0This is an excellent question.\u00a0 When strategy changes, then KPIs will have to change. Organizational tolerance to change is affected by several things.<\/p>\n

(1)\u00a0Is the scorecard system engrained in the organizational culture such that management trusts the system and uses it to make decisions?\u00a0 If so, they will have relatively high tolerance for change in the KPIs because they understand that the change is necessary if they are to continue to rely upon the system to make strategically relevant decisions.<\/p>\n

(2)\u00a0Given that you know you need to adjust the KPI, how quickly can you achieve 7 data points on the new or adjusted KPI?\u00a0 In other words, is there baseline information available that will help you quickly establish an XmR chart?\u00a0 If not, can you achieve frequent enough reporting points to have useful trend analysis within 6 months?\u00a0 If you were using an excellent KPI in the past and then switch to one in which it will be a year (or more) before you have enough data for management to have the 7 data points needed to make statistically sound decisions, this will cause frustration and lower the tolerance for the necessary change.<\/p>\n

(3)\u00a0Can your software system handle these changes without losing your historical performance on the objective (assuming the objective does not change)?\u00a0 Knowing that you won\u2019t be throwing away historical information increases tolerance for change.<\/p>\n

(4)\u00a0What about rewards tied to KPIs?\u00a0 How do your Human Resources processes link individual or group performance and incentives to KPI performance?\u00a0 What will be the result of changing a KPI right now?\u00a0 If it can\u2019t be changed due to a covenant with employees, can it be removed from the calculation so that you don\u2019t keep working towards an \u201cexpired strategy\u201d?<\/p>\n

I invite feedback from others.\u00a0 What else has impacted your organization\u2019s tolerance for needed change in its KPIs?\u00a0 And does anyone want to share their tips for overcoming resistance to this sort of change?<\/p>\n

For more challenges and solutions, we invite you to explore The Institute Way: Simply Strategic Planning & Management with the Balanced Scorecard<\/em><\/a>.<\/p>\n

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\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div> There has been a lot of interest in my recent blog post:\u00a0 \u201cBalanced Scorecard Gone Bad: What\u2019s that Funky Smell?\u201d\u00a0 Several people have posted comments and questions in various forums, but one in particular deserves special attention. From Gary:\u00a0I believe a key point in your message is that a strategy is never static due […]<\/p>\n","protected":false},"author":5,"featured_media":29031,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[13,15],"class_list":["post-29030","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-kpi-performance-measurement","tag-strategy-execution"],"yoast_head":"\nDear Abby-Gail: How Much is Too Much? - Balanced Scorecard Institute<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/balancedscorecard.org\/staging\/blog\/dear-abby-gail-how-much-is-too-much\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dear Abby-Gail: How Much is Too Much?\" \/>\n<meta property=\"og:description\" content=\"There has been a lot of interest in my recent blog post:\u00a0 \u201cBalanced Scorecard Gone Bad: What\u2019s that Funky Smell?\u201d\u00a0 Several people have posted comments and questions in various forums, but one in particular deserves special attention. 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