Chapter Nine SUMMARY AND CONCLUSIONS

Transcription

1 Chapter Nine SUMMARY AND CONCLUSIONS Contents 9.1. Major Findings of the Research Implications of This Research for Practitioners Limitations and Directions for Future Research

2 308 Chapter Nine SUMMARY AND CONCLUSIONS New dimensions to the implementation of BSC have emerged from this research. The research demonstrates that BSC can also be used as a tool for employee engagement. Additionally, the challenges and recommendations for successful BSC implementation are highlighted. Challenges that are specific to the PSU context are also brought out. This chapter summarises the major findings of the research and discusses the implications for practice. The limitations of this research and future directions are also discussed Major Findings of the Research The purpose of this research was to study the BSC implementation process including the challenges, the key success factors, and the outcomes - particularly with respect to its impact on employee behaviour, working environment and business performance. Awareness about BSC, alignment with strategy, assessment of performance, and achievement of strategic objectives are identified as four essential characteristics of successful implementation of BSC. The success of BSC implementation process is measured in terms of improvement in business performance and also awareness and integration of BSC as a way of management in the organisation. The BSC implementation challenges were studied from perspectives of different stakeholders i.e. top management, leaders, BSC implementation facilitators, and employees. The research also identified the PSU specific constraints to BSC implementation. The study reveals that the process of BSC implementation is considerably more complex than it is described in normative literature on the subject. The BSC framework helps translate strategy into simpler operational objectives and targets. It also enables leaders and employees to come up with relevant initiatives. The success of BSC implementation however, is reliant on several factors that are in addition to the design of the BSC framework. These factors were discussed in Chapter Seven and Chapter Eight.

3 309 The study shows that organisational culture, organisational values, and competence and commitment of leaders, employees and implementation facilitators significantly impact the implementation process. It demands a culture that values performance, initiative, ownership, accountability and ethics. Values such as transparency, fairness, integrity, collaboration, and respect for individuals were found to be major factors. The study indicates that contemporaneous change management; leadership development initiatives, and managing an enabling culture facilitate implementation of BSC. The study emphasises the leaders ability to relate with employees and engage them in strategy implementation. The investigation of the context of PSU brings out certain structural and cultural issues inhibiting performance. The macro political environment too impacts PSUs. These were discussed in Chapter Seven. The study of outcomes of BSC implementation highlights the dynamics of the internal process of BSC implementation as shown in Figure 8.1 in Chapter Eight. While the framework of BSC builds the focus on both the performance outcomes (lag measures) and the performance drivers (lead measures), the implementation process initiates transitions such that conditions that are pre-requisite to employee engagement get created. Positive transitions that happen on account of BSC implementation enhance employees perception of the organisation and situation. This, in turn, makes them feel better and appeals to the positive side of their emotions. Consequently, employees are motivated to give their best performance. Thus, when positive transitions take place in the working environment, the inner work life of employees improves significantly. Consequently, employees get engaged in the strategic pursuit. The essence of successful implementation lies in engaging employees in the pursuit of strategy implementation. When implementation process is strictly followed, the necessary antecedent conditions such as enhanced role clarity, communication, information sharing, employee participation, supervisor involvement, objectivity in performance assessment, enhanced alignment, collaboration etc. get generated. Thus, employees are involved and suitable resources are made available for attaining the objectives. Competency development is ensured, supervisory support is enhanced, and therefore, employees perceive a sense of empowerment that makes them proud of their work. Employee engagement precedes the business performance outcomes. Thus, it is a necessary condition as well as an outcome of BSC implementation.

4 Implications of This Research for Practitioners It is evident from the study that employees engagement with the organization and their work plays a pivotal role in achieving strategic objectives. Organisations implementing BSC must actually focus on the transformational nature of BSC implementation. It is important to understand and appreciate the fact that BSC cannot be considered in isolation. It must be integrated with other management systems in the organisation. It should be supported by a well articulated change management plan. Efforts should be directed at engaging the employees and developing necessary capabilities in them. Organisations should focus on building employee competencies, leadership, and a culture rooted in fundamental human values that are instrumental in engaging the employees. A culture of practicing deft execution with humane touch needs to be nurtured to ensure successful BSC implementation. In view of the findings of this study, the following recommendations are considered relevant for the practitioners: 1. Align Personal Vision with Organisational Vision: The plan for BSC implementation should include creation of a personal vision as well as co-creating an organisational vision. In the visioning exercise, effort should be directed towards aligning the personal aspirations of employees with the organisational aspirations. This would engage employees in the process of strategy implementation, which is the fundamental purpose of BSC. 2. Developing Enabling Culture: Successful implementation of BSC requires an enabling organisational culture that encompasses orientation towards performance, discipline, ownership, accountability, innovation, employee participation, empowerment, learning, capability building and value-based management. BSC thrives where performance is valued and rewarded. A discipline of conducting regular performance reviews and providing feedback expedites the process of BSC implementation. Resource availability and competency development sustain the motivation of employees to perform. Amicable relationships at workplace make work an enjoyable activity and rejuvenate the employees. In the absence of such an enabling culture, even if there is technical support available for BSC, its implementation is not viable. Hence, if such a culture does not exist, organisations must work towards bringing in the necessary transitions to build an enabling environment while implementing BSC.

5 Become a Learning Organisation: Learning organisations continuously endeavour to develop employee competencies and organisational capabilities. These learning initiatives should be integrated with organisational strategy. Scorecards help align these learning initiatives at all levels with the strategy. In other words, the success of BSC is enhanced when it is implemented in a learning organisation. As new competencies are developed and internal business processes are improved, the objectives from customer and financial perspectives get achieved in synergy. Learning and Growth perspective lies at the base of the structure of balanced scorecard. Objectives in this perspective are focused on integrating technology, building employee competencies, and developing a climate for action; thereby building a competent and motivated workforce. It necessitates the organisation to become a learning organisation. 4. Synchronised Introduction of Change Management Plan: As explained earlier, BSC may mean a transition in culture. The shift from the old to a new system is a formidable task and it should be meticulously planned and managed. Existing structures, systems, policies and procedures need to be continuously reviewed and modified as required, keeping the strategy implementation in mind. Breaking down old routines can momentarily cause flux and confusion which may lead to an upsurge in resistance to BSC implementation. Hence, ideally, the organisation s change management plan must run concurrently with the BSC implementation process. 5. Develop Agile and Ethical Leadership: To ensure a value-based organisational culture, a strong leadership at the various levels of hierarchy is necessary. It is the leaders whose initiative and perseverance sees the process through. The leaders conviction and commitment to implementing BSC is absolutely necessary. It is essential that leaders are self-motivated and persevere to implement BSC. As leaders are known to form and develop the culture of an organisation (Schein, 1985), ultimately it is their responsibility to develop an enabling, enhancing and elaborating culture to facilitate BSC implementation. 6. Integrate Values in Management: Absence of value-based management can fail BSC implementation. Unethical, or deviant behaviours going against the

6 312 organisational interest, can undermine the whole exercise of BSC implementation. BSC calls for discipline, commitment, courage of conviction, transparency, equality, collaboration, fairness in distribution of rewards, respect for employees and their ideas etc. Ingraining these values in management is instrumental in engaging the employees in the pursuit of strategy implementation 7. Harmonise Employee Performance Management System with BSC: When BSC is introduced the other systems of performance review and management should be discontinued. Existence of parallel systems makes it difficult for employees and leaders to shift to the new system. It also leads to duplication of efforts and causes confusion. The employee performance management should be strictly based on scores achieved on individual scorecards. Any moderation in the performance ratings to ensure a fit on the bell curve can pose a big barrier to the successful implementation of BSC. Organisations must reconsider the need to apply the bell curve in the first place. Alternative methodologies, such as employee performance evaluation based on individual BSC and assessment centres may fulfil the purpose that was being served by bell curve enforcement. In the Indian PSU context, the Department of Public Enterprises may consider harmonising its guidelines on measuring organisation performance based on MOUs with the guidelines on employee performance related pay (PRP) in which the bell curve principle is being followed. The PRP may be directly related to the scores of employees on their individual BSC. Thus, the employee will see a clear linkage between his PRP and performance. Promotions may be based on a separate system (assessment and development centre) that assesses employee potential and suitability for development to a higher position. 8. Link Rewards, Incentives and Deterrents with BSC: The organisation s alignment to strategy can be facilitated by an effective incentive and reward system that can motivate the employees. Kaplan and Norton (1996) argue that this reward system motivates staff and supports the achievement of organisational goals. Rewards, incentives and deterrents should be directly linked with employee performance. There should not be too much time gap between the performance and the reward/deterrent. Management can use rewards and deterrents as tools to

7 313 consciously build a performance oriented work culture that enables successful strategy execution. 9. Foster Intrinsic Motivation: This study suggests that intrinsic motivation can be inculcated among employees by interweaving their personal aspirations to the organisational objectives. In order to establish this linkage, it is important for the leaders to have a very good understanding of the employees and their aspirations, preferences, likes and dislikes. Leaders can also identify the key to self-motivation by nurturing fulfilling relationships with team members and thus, engaging them in the strategic pursuit. 10. Constitute BSC Team/ SMO: It is essential to have a team that is responsible for implementing BSC and ensuring strategy coordination. The team will function more like a strategy management office (SMO) as proposed by Kaplan and Norton. The structure, design and size of the BSC implementation team should be thoughtfully decided. They should report to the office of the head of the organisation - typically the Chairman and Managing Director. The team should consist of truly committed and competent people Make Resources Available: The required resources in terms of money, materials, manpower, technology etc. are elementary pre-requisites for successful implementation. The required budgetary allocations, efficient and hassle free material procurement system, access to required technology are pre-requisites for successful strategy execution. Incompetent and disengaged people either need to be trained and brought into the main stream or they should part ways with the organisation. 12. Validate BSC Design: The teams implementing BSC should receive the necessary support as regards the clarity of concept, validity of BSC design, and the process of implementation. The correctness of causal relationships among lead and lag objectives must be established based on experience as well as research. Also, interdependencies between functions and departments should be taken into consideration while designing of the scorecards. Ensuring a correct translation of strategy into scorecard is the first step to success.

8 Maintain Momentum in Cascading and Alignment: Enough force and momentum must be maintained to ensure the dissemination of scorecards and overall alignment within the organisation. The process must be a time-bound initiative. When systems, structures and employees get aligned, the results start showing. The small successes further fuel employee buy-in and motivation to implement BSC. 14. Institute Effective Communication Channels: Communications, especially in the initial stages of implementation, should be an ongoing process to help connect with the implementing teams. Communications motivate and inspire them towards successful implementation. All means of communication, such as verbal, written, phones, s, Skype, video conferencing, webcast, town hall meetings etc. should be utilised to overcome the challenges of physical distances. Leveraging technology to overcome challenges of distance can help align and engage employees even at distant locations. Leaders should repeatedly communicate what, why and how of BSC. They should also be open to receive feedback from the employees on the finetuning required in the existing systems to facilitate BSC implementation. 15. Automate BSC: BSC software should be integrated with other IT systems in the company to make sure that accurate real time data and information is available for the purpose of review. A dashboard that gives real time performance data is absolutely essential. Integrating technology and IT systems can help achieve many of the initiatives. These should be up to date systems for complete and timely information (MIS). Alternatively, specialised tools required for mapping voluminous BSC data should be made available for the reviews towards strategy implementation. 16. Endeavour to Engage Employees: This study addresses one of the critical issues faced by practitioners i.e. engaging employees in the strategic pursuit of the organisation. Analysis of the case data indicates that the BSC implementation process, when followed systematically, creates conditions that are pre-requisites for employee engagement. Organisations must endeavour to create these pre-requisite conditions which have been detailed in Chapter Eight. The BSC implementation process encompasses reviews, performance feedback, training and competency development, employee participation etc. It also facilitates

9 315 alignment of employee goals and targets with that of the organisation s overall objective. This develops a sense of meaningfulness and purpose among employees. Ensuring that these pre-requisite conditions are created is of prime importance. It is only when transitions happen in the organisation leading to these conditions that engagement of employees can be secured. The framework of BSC can only develop the strategic focus by aligning the work of each employee with overall organisational strategy. It is only when employees get committed to the strategic objectives and take initiatives to achieve these objectives and targets that the strategy actually starts getting implemented. Employee engagement, thus, is an outcome of the implementation process as well as a necessary condition. Hence, it can be construed that BSC implementation process, can also improve employee engagement. Organisations can use this approach for enhancing employee engagement while, at the same time, implementing BSC for business results Limitations and Directions for Future Research This study has limitations usually associated with case studies. As the case study focuses on a few cases, generalising the findings becomes an issue. However, history proves that both social and natural sciences can be advanced by suitably structured study of even a single case. Experiments and experiences of Galileo, Newton, Einstein, Bohr, Darwin, and Freud establish that a single case can be enough for advancement in the horizons of knowledge (Gobo, 2004). Further, focusing on a limited number of cases enhances the intensity of study. Readers can learn enormously from rich descriptions and comparative analysis (Stake, 1995). Although, the richness of data and the depth of analysis of a phenomenon provides the rationale for selection of case study methodology, when generalisation of results is considered this can also become a limitation. It demands considerable resources of time and money. But, lengthy cases are often discarded by the busy practitioners. In qualitative case studies the possibility exists of the researcher s subjectivity and bias impacting the outcome of the study. The researcher has attempted to address this issue

10 316 by ensuring appropriate rigor in the process, triangulation, and constant dialogue with the experts as well as practitioners. Future research on the subject can address these limitations and enhance understanding on the subject. Specific areas for future research are listed as following: 1. This study was confined to a public sector enterprise. Study of multiple cases encompassing both public and private sector can strengthen the generalisation of the findings. 2. This study has brought out various determinants of BSC implementation such as culture, leadership, employee engagement, concurrent change management plan etc. that are highlighted in the emergent theoretical framework as discussed in Chapter Eight. However, their relative strength in terms of the degree of impact they have on the implementation process has not been ascertained. Future studies may consider understanding the relative strength of each determinant. 3. Non-financial consequences of BSC implementation were arrived at through observation and responses of employees and leaders. There has certainly been some recall factor as the data depended upon the memory and perception of the respondents. The financial and physical consequences were confirmed through secondary data such as financial reports, minutes of meetings and other official documents. A longitudinal study, with appropriate control factors, can further validate the consequences of BSC implementation, 4. The study inductively infers that the BSC implementation process can enable the presence of factors that are antecedents to employee engagement. A longitudinal study relating the impact of BSC implementation on employee engagement can further establish this inference. This study brings in a paradigm change in the way BSC is looked at. To the academicians, it shows the linkages between two major theories of BSC and employee engagement and opens up several new avenues of research. To the practitioners, it reminds the words of Jack Welch (GE). The essence of competitiveness is liberated when we make people believe that what they think and do is important and then get out of their way while they do it.