Magazine article Training & Development

Learning the True Score

Magazine article Training & Development

Learning the True Score

Article excerpt

Balancing the Corporate Scorecard: An Interactive Simulation CD-ROM and print, 1998, Harvard Business School Publishing; 800.998.0886, Purchase US $795. Other material: user guide, facilitator guide, HBR article.

Wing walkers entertain folks at county fairs by walking along the biwings of vintage airplanes hundreds of feet in the air. These daredevils share the survival secret of holding firmly onto one wing strut as they reach out and tightly secure the next strut before moving farther along the wings. Likewise, the Balancing the Corporate Scorecard interactive simulation offers us a strut-by-strut learning experience to internalize its content. We learn the fundamentals of the balanced scorecard without putting our careers or companies on the line.

The BSC is a powerful performance measurement framework. It takes organizations beyond looking only at financial measurements to balance them with three other measures: learning and growth, internal business processes, and customer focus. The BSC emphasizes a strategic cause-and-effect relationship among these measures.

Upbeat music welcomes you to the program, followed by Phil, the onscreen guide. He introduces the BSC developers, Bob Kaplan and Dave Norton. They give a brief introduction, and the simulation begins. The program uses Sentra, a fictional subsidiary of GigaSoft, as its learning vehicle. Sentra is in the data-mining software business, and you take the role of Sentra's new CEO. Your boss, GigaSoft CEO Steve Tucker, instructs you to get out of the consulting business and into full-time, data-mining software development and customer service. Accepting your mission at face value, you plunge into the simulation and click your way first through a company orientation and then-quarter by quarter-a realistic scenario. You're guided by a panel of updates, including profit, cash flow, revenue, market share, sales forecast, and customer satisfaction. You get pop-up emails, voicemail, memos, news stories, and drop-in visitors along the way to keep you in touch with the evolving situation. You respond by setting product pri ces, hiring and firing, investing in training and information technology, and adjusting software-debugging time.

Heady victory in the early quarters turns into ignominious defeat in the last several quarters, though. The fun stops, and you start feeling like you're flying blind. No matter what adjustments you make, things get worse.

During the last quarters, Tucker skewers you several times, the VPs bicker, and customers leave in droves. By quarter 15, you run out of cash and the screen goes dead. Tucker comes on the phone and says you get one last chance, Phil comes back to offer you encouragement, and the consultants arrive to help you and your VPs with a BSC.

You then work your way through several exercises to understand the sensitivities of the BSC measures, learning how they interact with each other and market conditions. You also view a focus-group discussion and the results of a customer survey. Phil gives a tutorial on what went wrong, using an instructive systems diagram. Basically, the shortcomings cause dissatisfied customers who buy less and switch to competitors. As a consequence, revenues, profits, and cash levels drop.

Part 2, "Dig Deeper," begins with Phil coaching you on building a new BSC panel. You go through a menu of measures, pick those that seem most appropriate to the situation, and advance--quarter by quarter--following a trial-and-error, decision-making process. …

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