No matter how much we advocate the science of marketing, its art has not disappeared.
Take the balanced scorecard, for instance. In the tradition of marketing creativity, a graphical document—the balanced scorecard—translates marketing strategy to operational terms and sows the seeds for marketing accountability as measured and highlighted on the marketing dashboard.
Balanced scorecards, very simply, help marketers and the executives to whom they answer visualize strategic project planning.
But the scorecards don't end with their simplicity or their coordinated colors. They represent an approach to strategic management that surfaced in the early 1990s with Robert Kaplan and David Norton, the same guys who brought us Success Mapping.
Recognizing some of the weaknesses and vagueness of previous management approaches, the pair wrote a 1992 Harvard Business Review article about a format that communicates what companies measure in order to "balance" their marketing goals with broader corporate aims.
The balanced scorecard provides feedback around both business processes—from employee communications and training to launching a pilot program with print, outdoor and online advertising—and outcomes. When fully deployed, the balanced scorecard transforms strategic planning from a creative exercise into the interim tool for organizations migrating from purely intermediary metrics—brand awareness, customer satisfaction and the like—to a marketing dashboard of hard metrics like ROI.
Kaplan and Norton introduced four perspectives to include on the balanced scorecard: financial, customer, internal business processes, and learning and growth.
Whether you subscribe strictly to their outline or adapt it for your own use, the balanced scorecard suggests that you view the organization from different perspectives, developing metrics, setting goals, defining timeframes, and analyzing data relative to each. It relates corporate missions to marketing efforts—or vice versa—through a tool in which even unrelated key objectives such as brand development metrics, customer satisfaction scores and channel penetration can be plotted and tracked. This mix-and-match illustrates how individual initiatives and integrated campaigns work toward fulfilling enterprise-wide goals.
With unique missions on the corporate level and visions within marketing, balanced scorecards tend toward customization. Some even go by different names. However, all work toward the same ends—improved business process outputs and strategy outcomes.
The balanced scorecard methodology builds on some key concepts of previous management ideas (total quality management), including customer-defined quality, continuous improvement, employee empowerment, and measurement-based management and feedback. Because of its ties to other recommended management disciplines, many companies use a balanced scorecard without even knowing it.
Achieving Equilibrium and Excellence
As stakes around accountability of business functions within organizations rise, marketers don't want to monkey with measurement. To maintain the reliability and quality of the marketing scorecard, users agree that they must focus on every step in the process, keeping an eye on their proposed marketing initiatives as they progress from the planning phase, to introductions to the C-suite, general employee base and beyond.
These "feedback loops" check back from specific action plans to see that they will accomplish stated goals, ensure that applied metrics will identify success or failure of action plans and adjust timeframes to realize outcomes. The scorecard lives through constant improvement. Outputs, in numerical form, guide improvements, show performance over time, evaluate measurement methods and provide models for future goals and action plans, working from small goals to larger ones.
Through the analysis of data from the tracking processes, the measures or key performance indicators (KPIs) themselves may be evaluated and changed to better support such goals.
Build It and the CEO Will Come
To build a balanced scorecard, you first have to consider your organization's corporate mission and determine marketing's place within it. On which portions of the mission can marketing have a direct impact? Where does marketing have to start? Does it first have to win respect from the C-suite? Respect that will help executives acknowledge the value of marketing and of its scorecard?
From responses to these questions, marketing develops a vision of its own, a higher calling that it aims to answer to elevate its position within the company. Where is the organization going? How can marketing help it get there? In other words, what sub-strategies belong to marketing?
In looking at these, consider the different internal and external audiences affected, and include each of their perspectives in your marketing scorecard, at the same time defining marketing's core competencies able to assuage each perspective's needs.
You'll be happy you've done such homework before deciding on metrics. Remember that you'll review metrics continuously to make sure you've matched them to marketing's strategies and audiences appropriately and that they maximize the outcomes, displaying the complete value of marketing's success or pointing out, if possible, the missteps in marketing's failures.
With a solid scorecard—one that you feel confident will balance marketing's strengths to fulfill the function's vision of the corporate mission—action plans such as product and service rollouts, reinvigorated brand toolkits, increased media coverage of the brand message and others come to the fore.
The next step prepares to start the process over again, adjusting for missions accomplished and those left at the starting gate, in need of better metrics or cross-functional help from inside the corporation. Charge a high-ranking marketing team member with managing the scorecard and moving it forward, with sins confessed and salvations praised.
A Strategy for Action
These are benefits of activating a balanced-scorecard approach to marketing management:
- It helps align KPIs with strategy.
- It provides management with a picture of marketing operations.
- It facilitates communication and understanding of business goals and strategies to different audiences, internal and external.
- It provides strategic feedback and learning with a forward-looking thrust, not a study of past performance patterns.
- It organizes marketing information and converts it into numbers—an attractive outcome for the CEO and CFO—from a broad system that champions long-term marketing excellence.
Continue reading "The Balanced Scorecard: Prelude to a Marketing Dashboard" ... Read the full article
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