Leadership Strategy Balanced Scorecard Essay

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Leadership

The balanced scorecard concept highlights a number of different measures that reflect on the success of a company. These measures include the normal financial measures that corporations use, but also measures relating to the customer, to the staff and to the environment/community. The leader must therefore take into account these different dimensions -- innovation, processes, financial outcomes and the customers -- in order to ensure that the company excels (Kaplan & Norton, 1992). The role of the leader is both to serve as visionary and strategist, but also as the inspirational leader of the organization. Vision is essential, because the leader has to see how all of the different elements of the organization come together to deliver on the multiple objectives laid out in the balanced scorecard approach.

The first step for the leader is to determine the organization's strategy, something that demands a high level of vision (Porter, no date). The strategy flows from this vision. As Porter (n.d.) notes, the leader must define the trade-offs that the organization will make, and in this make the decisions with regards to strategic priorities and with respect to resource allocation within the organization.

As Powell notes, however, leadership is more than just scientific management of resources. Leadership is about motivating the people within the organization, to engage them in the vision and have them work towards the strategic objectives. Part of this is inspirational in nature, but part is putting systems into place that will motivate specific behaviors that help take the organization closer to its objectives. The leader also has to understand how to accomplish this without compromising any of the key elements of strategy. For example, if a company wants to increase sales, and places all its emphasis on commissions for sales people, this could lead to unethical sales behavior. The leader has to define the morality of the company and set the ethical tone, but also has to have the right systems in place to ensure that the people within the organization are working towards these strategic objectives.

Every organization has a set of resources that can be used to help it achieve its objectives. For most companies, this is a finite set of resources, which is where Porter's understanding of trade-offs comes into play. The deployment of resources is one of the most important roles that leaders play. Where this involves financial or asset-based resources, there is no need for leadership, just management. But where these are human resources, this is where leadership comes into play, because human performance can be influenced by leaders, by objectives and by the environment in which the person works. Leaders play a strong role in maximizing human performance within organizations.

First, the leader has to ensure that human resources systems, such as the job descriptions and incentives, are aligned with strategic objectives. That is, however, only the first step in ensuring high performance from employees. Evidence suggests that employees who buy into the organization's vision for the future are going to perform better. It is also known that employees perform better when they can see how their work contributes to this vision. This is why the balanced scorecard emphasizes the employees. They are the ones who excel in the learning and innovation dimension, for example, and the more people are engaged in innovation the more innovative ideas will come out of the company, if the systems are in place to capture and effectively filter those ideas.

It is also important for any organization to ensure that there is leadership throughout the organization. The CEO cannot be expected to be the sole leader, and the larger the company the truer this is. For the most part, leadership is something that all managers do throughout the company, and there are informal leaders who may not have formal authority as well. It is important for the senior leadership team to cultivate a high level of leadership throughout the organization -- many view the optimal situation as being when the company can function well without the high level leadership at all.

One of the interesting dimensions with respect to strategy and leadership is that there is often resistance within an organization to strategy. Sometimes the resistance comes from entrenched interests that will lose power from changes, but in some cases it is simply a matter of people who do not understand the changes, have a low level of buy-in and are not engaged to a very high level with the company. One of the most important roles that leadership plays is in bringing people in the company together for a common vision, one that is directly tied to the organization's strategy.

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It is important, then, for leadership to be able to communicate their vision to the rest of the organization, and build some buy-in. Moreover, the leader has to recognize the points of resistance that might exist, and find ways to overcome that resistance. This is essential to ensuring that the organization works together to implement strategy. In some cases, resistance might arise because the tactics being used to implement a strategy are not congruent with the strategy -- an important trait of good leaders is that they are capable of self-reflection and will understand when they might have contributed to the problems.

Information is something that is becoming a weapon in today's business world, a source of competitive advantage for organizations that can capture and effectively process information. The modern leader needs to understand the role that information plays in an organization's success. Information can guide a lot of managerial decision-making, but it can also guide strategy as well. For the modern leader, understanding what information is available, and what it can do for the company, is essential. Information has the power to highlight potential solutions that address multiple elements of the balanced scorecard simultaneously, and information can also be used to support strategy, where strategy derives from analysis of the external and internal business environments.

Communication is a critical element. Not only does a leader need to convey a vision and achieve buy-in, but the vision and strategy need to have a certain simplicity. This is because managers throughout the organization will need to interpret the strategy for their own units and roles. People at each layer of the organization need to know what is expected of them, and how that will contribute to the organization's outcomes. But the communication needs to flow from the bottom up as well. One of the biggest reasons why leaders need to be able to listen is because somethings there are issues at the ground level that they are not thinking about -- they need to be able to hear responses from the front line and understand what is working, what is not working, and what potential changes need to be made.

Kaplan and Norton (1992) make the point that strategy and vision need to be at the heart of the organization, not control. Indeed, they argue that leaders cannot achieve all of an organization's objectives just based on control, but rather that the entire organization needs to be engaged in a vision and strategy in order to be successful. With this engagement, the different parts of the organization can be motivated to work together, towards these common strategies, rather than working in silos, with limited communication and no common vision . Control is a function of management, but leadership is more than just control. As Colin Powell argues, leadership is specific what the leader does beyond managerial control.

Thus, for any company, the process is fairly straightforward in its concept.. The leader devises a vision and from this vision a strategy that will get the organization there. Then, the next step is that the organization should have a set of resource deployments, communication flows, and tactical decisions that all serve to work towards the vision and strategy. Important is the fact that there will need to be a number of different measures, not just financial but in other areas as well, because it is the balance that allows an organization to excel year after year.

In conclusion, the role of the leader is to facilitate greatness in the organization. There are a number of different dimensions in which an organization should excel. For the leader, however, the key is to have a vision and a strategy, and then be able to communicate what the vision and strategy mean for the rest of the organization. This means determining how the organization is structured, how information is to be used, what communication flows will exist, and other facets of management. But it also means finding ways to inspire people to be at their best, and building a strong organizational culture that is focused on getting the organization to successfully implement its strategy.

Lastly there is the control function. The leader has already at this point determined what the measures of success are for the organization, including defining the trade-offs that will be made. However, the different tactics….....

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