Research Paper: Strategic Management Comparing Balanced Scorecards and Hotspots

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Strategic Management

Comparing Balanced Scorecards and HotSpots

Of the many strategic challenges organizations have, one of the most challenging to create a culture of continued accomplishment, supporting by processes, systems and procedures that support continued growth. The two books, Hot Spots: Why Some Teams, Workplaces, and Organizations Buzz with Energy and Others Don't (Gratton, 2007) and Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results (Niven, 2002) each take a comparable approach to defining how best organizations can define and sustain high performance and over time create a culture of high achievement. The intent of this analysis is to first provide a synopsis of each book, then define an association of both text, followed by an analysis and evaluation. Both books are predicated on a high level of cooperative, highly collaborative performance, with Gratton's book looking more to how best to combine cooperative mindsets, boundary spanning authority and ownership, and an igniting purpose, all supported by productive capacity (2007). The Balanced Scorecard (BSC) as define by Niven (2002) is predicated on financial projections of past performance indicating the probability of success for future initiatives. The Niven book is one of the best written on BSC, as it provides a well-defined methodology that has enough flexibility to allow for taxonomies to be created and supported in the context of multidivisional businesses (Niven, 2002). Ideally strategists need to consider each and combine their relative strengths for each situation an organization is facing over time. Both ideally need to be included in the development of a strategic framework over time.

Synopsis

In the book Hot Spots: Why Some Teams, Workplaces, and Organizations Buzz with Energy and Others Don't (Gratton, 2007) the author strives to clarify many of the most abstract and conceptual concepts of enterprise performance by seeking to unify personal initiative and effort to organizational performance. Grafton seeks to define a Hot Spot as a combination of individual and relational energy that support creating a sustaining the following factors. First, a Hot Spot is ideally created from a cooperative mindset, which could be considered an exceptionally high level of collaboration and communication. A highly effective, healthy organization will be able to create a cooperative mindset by concentrating on the factors of trust and continued investment in relationships

(Gratton, 2007). Second, the author makes the point that for Hot Spots to emerge and be exceptionally effective there also needs to be a focus on identifying "boundary spanners" or those areas of an organization that can limit or constrain creativity and performance. Third, there must be a strong focus on the vision of the organization and shared passion for success, all leading to what the author calls a strong, galvanizing igniting purpose (Niven, 2002). Fourth, the ability to create a sustainable business model over time, one that can be resilient enough to deal with setbacks yet agile enough to respond to market conditions is critical. This is called sustaining sufficient productive capacity by the author, and shows that the book has a solid foundation for long-term strategic growth (Gratton, 2007). The author also makes the point that these four conditions of an enterprise must also be supported by five core or fundamental best practices from a productivity standpoint. These include appreciating talent (which would also include recognizing and financially rewarding them), making and keeping commitments including the ability to define realistic project schedules; resolving conflicts efficiently and completely both from a resource and personnel standpoint; synchronizing time and getting on the same perception of time and deadlines; and establishing a rhythm of work (Gratton, 2007). There are many excellent insights shared within this book, and one of the most valuable is the role of high performance knowledge sharing networks. The author doesn't specifically call the dynamic of inter- and intra-network information sharing by this term, yet it is in reality what Grattan (2007) is talking about. The author contends that there is value through exploration, innovation and exploration across knowledge-sharing networks (Gratton, 2007). For these frameworks to flourish there must be a high performance knowledge sharing system in place, in addition to very clear and transparent knowledge sharing. To do this, many theorists contend that BSC are also needed, which is the next book summarized in this section.

In the book Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results (Niven, 2002) the author provides ample evidence of how effectively an organization can balance their future strategy with existing conditions through the use of highly defined metrics and key performance indicators (KPIs) that report back customer-based, employee learning and growth-oriented, financial and internal process measuring methodologies. The author is careful to point out that purely relying on quantified performance metrics cannot provide the level of insight necessary to be a strategy-centered business however (Niven, 2002). While there are strategy maps and a very clear methodology of planning and development strategies, the book leaves the actual definition of taxonomies to the reader and implementer. The author is also quick to show how the structure of the methodology can be used for creating a highly effective framework for ensuring transformational change in an organization as well, a best practice of BSC-based change management strategies (Abernathy, 1997). This is one of the most powerful aspects of the book and its methodology, as Niven (2002) has been careful to interweave in the steps necessary to ensure lasting change in an organization. The result is that the objective of creating a highly balanced methodology of the quantitative and measurable to the inherently unquantifiable, personnel-based issues of trust emerges from the book. The author successfully provides a series of examples of how best to integrate the concepts of a BSC with the more strategic need of insuring integration of vision, mission and values to how a business measures how effective it is in creating value (Niven, 2002).

Association of the Two Texts

In analyzing each text and their association with each other, both share a common core attribute of attempting to take the most critical areas of an organization and bring greater clarity and accuracy to how they are relied on to deliver customer value. Both books are heavily reliant on the customer, employee performance management, financial and internal processes and their integration to define the core business model of the firm and measure performance. Both also successfully show how higher levels of creativity and innovation can be created as a result of gaining executive support for change management plans that are quantified and verifiable in terms of performance (Niven, 2002). In addition, both also provide insights into how best to create value through continual, recursive improvement over time (Agostino, Arnaboldi, 2012). Both stress a continual improvement strategy that is predicated on a development stage that is agile enough to respond to feedback internally as well (Gratton, 2007) (McClure, 2000). In conclusion, both books aim to create a highly effective strategic framework for managing an organization with Hot Spots concentrating on the systemic development of innovation and BSC-based initiatives taking a more strategic approach that is cross-functional and cross-departmental in focus.

Analysis and Evaluation

The proven ability of any organization to ensure growth is predicated on being able to measure what matters most and align the inherently unquantifiable, yet critical, factors to long-range, challenging objectives (Craig, Moores, 2005). Being able to create a culture of achievement predicated on measurable change is one of the most visible signs of an enterprise agile enough to capitalize, measure and attain significant achievement (McClure, 2000). While every organization is attempting to accomplish this, few actually attain this level of performance. The best practice of building strategic frameworks based on shared outcomes and objectives is crucial for the overall growth of a business.

(Ritter, 2003). Using the Hot Spot approach to create a highly collaborative workflow and series of framework has proven successful, and when combined with… [END OF PREVIEW]

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