Implementing a Balanced Scorecard is a five-step approach. Last week, we focused on the first step: deciding what to measure. Let's now go through the final four steps.

Step 2: Winning Senior Management Commitment

Implementing a Balanced Scorecard is not like flicking on a light switch. It has a long-term impact on how the company defines and measures objectives, management systems and corporate performance. Consequently, putting a system into place can take a long time - three to four years, in some cases.

Needless to say, this change must be not only supported but driven by senior management. The corporate decision makers aren't passive onlookers. They must be prepared to mobilize the organization to effect the change.

Step 3: Planning & Process

Let's turn to the nuts and bolts of implementation. Last week, we discussed the process of establishing key metrics and goals for each of the four perspectives of the Balanced Scorecard - Shareholders, Customers, Internal and Innovation/Learning. At the end of the process, consensus must be reached regarding the objectives and action steps for metrics in each of the four perspectives.

When combined, the end result will be the creation of a plan. Now, the emphasis shifts to implementation. Again, senior management will play the leading role. But don't overlook the importance of participation of middle management and employees. It's not easy to get people within an organization to embrace change. To overcome resistance, you must get everybody involved and create a sense of ownership across the entire organization, even to the point of establishing personal goals, measures and scorecards for individuals.

Step 4: Analysis

Balanced Scorecards are similar to behavioral based safety programs in that that they generate data on a daily, weekly, monthly and annual basis. These data must be captured and analyzed. The results of the analysis - which can be done in graphs, charts or simple verbal discussion - must be disseminated and absorbed by the appropriately affected employees at each level of the organization. Distribution of information on a need to know basis is critical to the success of a Balanced Scorecard.

Step 5: Feedback & Adjustment

As you put the Balanced Scorecard into action, the feedback systems generate and report actual results. The data enable you to test your hypotheses to determine if your strategy is working. Adjustments are made actively and immediately in response to findings, much like an aircraft navigating its way to a destination makes changes in altitude, course and speed in response to cockpit readings. This process is also akin to Deming's: Plan, Do, Check cycle.

Being able to change "on the fly," if you will, is thus crucial to Balanced Scorecard success. Organizations must be prepared to adjust quickly. In this sense, smaller companies have the advantage over larger ones. Still, with the active participation of senior management, even larger companies can act nimbly.

Conclusion

That's the Balanced Scorecard in a nutshell. Although it's an overall business strategy, the principles of the Balanced Scorecard can be incorporated in microcosm at different levels of a company's operations. Thus, occupational health and safety professionals can apply their own version of the initiative to drive down injuries and illnesses. Of equal importance, the Balanced Scorecard imposes on health and safety leaders a discipline that many CEOs and upper managers demand: the ability to define success and relate performance - both in terms of safety and overall economic performance - to specific, pre-defined metrics.

MEASURING SAFETY PERFORMANCE

Balanced Scorecards & the OHSMS

By Glenn Demby

As Barb notes, a Balanced Scorecard can be used to define and measure a company's health and safety performance. This is particularly true of companies that have adopted an Occupational Health and Safety Management System (OHSMS).

If you want to use a Balanced Scorecard to measure the performance of your OHSMS, you must identify the dimensions of the OHSMS you intend to consider and what data you'll need to evaluate them. Here's a matrix you can use for this purpose.

Source: OHS Management Systems: A Review of their Effectiveness in Securing Healthy & Safe Workplaces, National Occupational Health and Safety Commission (Australia), page 54

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