Posted: January 29, 2013
Take a best practice to a next practice
Promote alignment and build great cultureBy Paul Larkins
The Balanced Scorecard is a decades-old business alignment tool that has helped companies, non-profit organizations and government entities around the world focus on the most important and appropriate activities to move forward, while driving financial outcomes.
At SquareTwo Financial, we recently expanded our balanced scorecard tool – called the PowerCard – so it not only looks at what we need to do to achieve operational and individual performance goals but how we are going to achieve them. As a result, our departments and employees have clear expectations, real-time access to evaluations and clearly delineated pathways to achieve peak performance at personal and corporate levels. The PowerCard provides a framework that puts our stated values of focus, alignment, accountability, integrity and trust into daily practice through constant evaluation, measurement and recognition of those who demonstrate these values in action.
If you are new to The Balanced Scorecard concept, here’s a bit of background: The term “balanced scorecard” became widely recognized in the 1990s after the concept was popularized in the articles and books of Drs. Robert S. Kaplan of Harvard Business School and David P. Norton of the Palladium Group. The practice of measuring performance more broadly than financial indicators, however, dates back to General Electric in the 1950s and even earlier in the century through other business entities. The Balanced Scorecard remains popular in business today, and was even selected by the editors of Harvard Business Review as one of the most influential management ideas of the past 75 years.
At SquareTwo Financial, we implemented our PowerCard strategy in 2009, and it has proven an extremely powerful tool for ensuring our company stays on track. Our PowerCard directs our day-to-day efforts toward our overall corporate goal: To relentlessly pursue 100percent stakeholder satisfaction. We also have PowerCards at department and individual levels. Each PowerCard defines how a department or employee will reach overall goals under our five pillars of focus: People, Operational and Compliance Excellence, Growth, Partners, and Financial Performance.
The Balanced Scorecard methodology continues to prove effective in our own business. In 2012, however, we decided to expand the strategy one step further, an innovation other businesses might find useful. This is how our new PowerCard looks: the “front” of the physical document continues to represent the “what” of achieving operational excellence in our work in the $100 billion asset management and recovery industry. But now, we have expanded to the “back” to define “how” roles and tasks will be accomplished. Simply put, the front of our PowerCard is a map of where we want to go, while the back details how we are going to get there.
These new details on the back of our card, taken as a whole, reveal the importance of a great company culture in achieving goals. We have found: Great operations is the WHAT, and great culture is the HOW. A business model alone cannot develop a trusted customer relationship, negotiate a contract or make a sale. Every business model eventually depends on motivated, skilled employees, and partners who are true business leaders.
Our PowerCards are not secrets in our organization, either. They are shared and used at every level. This helps demonstrate the linkages between our corporate, department and employee PowerCards. These linkages are key, as they determine our organizational alignment, which is one of the primary goals of the initiative.
To date, the results of our scorecard innovation are proving successful. A look back at 2012 shows that even though consumers were still hesitant to buy, and businesses hesitant to invest, SquareTwo continued to produce superior performance on a number of measured fronts.
We also know there are no shortcuts to success. Although the balanced scorecard strategy may seem complex, we believe it provides our employees a solid roadmap, which prepares us to continue to succeed.
Paul A. Larkins is president and CEO of SquareTwo Financial (www.squaretwofinancial.com ), a leader in the $100 billion asset recovery and management industry. He has more than 25 years of experience in the financial services industry and was named a finalist in the 2011 ColoradoBiz CEO of the Year mid-sized company category. He can be reached at 303-296-3345.