22 June 2009 • 7:11 am

Cascading Conundrums – Part III

In Parts I and II of this topic, I asserted that cascading a balanced scorecard (BSC) across an organization is a process that requires careful planning, and thoughtful answers to the ‘When’, ‘Why’, and ‘Where’ questions. I cautioned that hastily planned cascading can derail the entire change program. Here, we conclude with the final three questions a leadership team should consider before cascading strategy across the organization.

Carefully Balance Autonomy and Mandates to Answer the ‘What’ Question

The ‘what’ question entails the actual content of strategy maps and measures. Unsurprisingly, there have been a variety of approaches used, with mixed results.

One such approach is to simply cascade the enterprise-level strategy map intact to subordinate units, and requiring them to select their own measures, which may be unique, subordinate to, or identical to enterprise-level measures. Sometimes there are no strategy maps at all at subordinate levels. But business and support units each have their own internal value proposition, and the top-level strategy map is rarely a good fit at subordinate levels. The motivation for this approach may not be benign; it has been employed to both eliminate the effort of creating subordinate strategy maps, and to offload the effort of collection measurement data to the subordinates. This approach is likely to create resentment at the subordinate level, and rarely results in a sustainable change program. Avoid this approach if at all possible. 

A more balanced approach is to require that subordinates follow the established vertical and horizontal structure of the parent strategy, but give them the freedom to establish their own objectives and measures. The reward from this approach is much higher engagement and buy-in for subordinate leadership teams, but the risk is fragmented or unaligned strategic messages. It is best to ensure that the same facilitator(s) who guided development of the higher-level strategy also facilitate development of the subordinates’ strategies – the facilitator can guide leadership teams to a better-aligned change agenda. It is important that subordinate and parent strategy maps resemble one another (I describe it as a ‘family resemblance’) and that there are no obviously conflicting strategic objectives. An excess of autonomy at subordinate levels will fragment and confuse the strategic intent.

The endless additional variations on approaches to managing cascaded content simply cannot be captured properly here. Please submit comments with your organization’s approach, and how well it is working.

The ‘Who’ Question Helps to Answer the ‘How’ Question, and Informs the ‘When’ Question

The ‘Who’ question is far easier to answer, as in, ‘Who facilitates the cascade?’ As the organization cascades its strategy deeper and deeper, the number of parallel efforts quickly multiplies. To save time and money, the pragmatic approach has been to enable third- and fourth- tier groups to self-facilitate their strategy development. Don’t do this. An expert, objective facilitator, (whether an outside consultant or from the enterprise’s own strategy office) is absolutely essential to the success of each step in the cascading. Self-facilitated meetings are likely to create poor quality BSCs, or none at all. Another unwise approach is to have the strategy create the strategy map and measures for the subordinate organization, and simply provide it to them as a mandate. This easily alienates the subordinate organization to the entire process, and loses any possibility of true engagement with the change agenda.

The ‘How’ question is answered by the choice of facilitator. An expert facilitator makes good decisions about the process of creating the BSC on the basis of his or her past experience, and tailor the approach to the unique characteristics of each subordinate organization. There is no one right way to make or cascade strategy in an organization; sadly, there are many ways the process can go awry. Expert facilitation is insurance against bad outcomes.

We now return to the ‘When’ question. Leaders want to sustain the momentum of enterprise-level strategy development, and aggressively pursue rapid cascading. But the enterprise probably doesn’t have the facilitation capacity for too many such efforts simultaneously, and this is where dangerous shortcuts are likely to be considered. It is far better to develop a high-quality cascade over time than one that is rushed and poorly-executed. A carefully planned and executed cascade is an essential ingredient to an effective and sustainable strategic management effort.

Agree with these ideas? Disagree? Seek clarification? Please comment below with your own cascading experience and questions. I hope we’ll have a robust dialog here.

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