Empower and Enable - to Measure the Success

KK Sharma

The discussion on human capital generation, harnessing

and management has been going on for the last 20 years in

corporate and other organizations. Jury is still out, if the

organizations have adopted best practices in this format or

are still financial report driven when it comes to

performance measurements. Lynda Gratton in her book

‘Hot Spots: Why some teams, workplaces and

organizations buzz with energy and others don’t’ identified

four elements which are necessary for the creation of hot-

spots or a happening work place. These are directly linked to the enablement of employees and

leaders. The ultimate goal is to keep a work environment buzzing with productive activities and

keep it highly competitive (Gratton, Lynda, 2007). Another author of repute, Paul Niven in his

book ‘Balance scorecard (BSC) step-by-step: Maximizing Performance and maintaining results’

provides a step by step guidance towards implementation of BSC in an organization. As an

effective blueprint, it can be used for converting strategic ambitions of a company into effective

execution at floor level. Many authors have devised different approaches to enhance productivity

through performance monitoring and employee enablement focus. Key for survival in knowledge

economy is human resource and its ability as a value createor. The organizations are increasingly

coming round to accept human resource as an asset as against the mindset of last century of

treating them as a liability.

First we can look at Lynda Gratton and her book, where she attempts to identify the reasons

behind success of some teams in generating energy in a workplace. An organization with a

positive work environment leads to higher productivity. As explained, the author has derived

these conclusions after studying over a dozen companies and interacting with a large number of

cross cultural employees. Author draws her work from organizations like Nokia, Goldman

Sachs, Reuters and BP. Example of Polly’s struggles with BP in Poland and positive role of

Carlos, BP chief in Venezuela in assisting Polly, is an important illustration. As a result of their

boundary spanning, both Polly and Carlos developed skills and competencies in working

cooperatively with people very different from themselves. She shares the principles for enabling

hot spots to emerge and flourish. ‘You always know when you're in a Hot Spot. You feel

energized and alive. Times when ideas and insights from others combine with your own in a

process of synthesis to produce eureka moments, ground breaking ideas and innovations’

(Gratton, 2007). Collaboration is the key theme of the book and it analyses reasons of such

collaboration. Key points for collaborative and enabling environment are:

A cooperative mindset, where people are excited, willing and able to work together will

make hot spots appear. Three aspects of human potential are intellectual, social and

emotional capitals. Main contention is that human potential is the result of a self-fulfilling

cycle in which attitudes drive the practices thus reinforcing behaviour. Here leader’s

attitude towards cooperation and competition is identified as a crucial input.

The second element is boundary spanning, which reflects in innovative mind-set and

work practices. Multi-functional assets provide more innovativeness over traditional

homogeneous teams. There are challenges across distances, working with different

cultures and languages. But the hot spots become hottest when people from very different

backgrounds with varying skill-sets and backgrounds combine their expertise in new

ways. The author provides some guidance on how to make such teams function together

and span the boundaries.

With collaborative mindset and boundary spanning,

a healthy environment full of latent energy is created for

the organization. However to use the goodwill and trust

thus created, there is need of an ignition point. The author

explains with Linux example that to obtain ignition, there

must be a question, a task, a vision that excites and

energizes people. These three elements have a multiplier

effect on each other.

The energy released by above three multipliers above is sought to be channelized into

productive capacity in next chapter. This capacity is a reflection of teams and people

working together in a productive manner. Skills required for this conversion to take place

are through resolution of conflicts and management of rhythm of their work (Gratton,

2007).

An interesting observation, not likely to find much support from bureaucratic organizations is

that hot spots emerge in uncontrolled way, and can not be directed or controlled. Leader’s role is

to support conversion, shaping signature practices and processes, and creating networks across

where hot spots can flourish.

The BSC on the other hand has been used as a strategic performance management tool by

various companies around the world. The BSC as a tool was first conceived when Robert

Kaplan, David Norton and Paul R. Niven were working with Nova Scotia, Canada in the 1990s.

It was articulated by Robert Kaplan and David Norton to track the activities of the staff and

monitor their performances and consequent results (Kaplan and Norton, 1992). The aim was to

move away from monitoring of financial result based performances to adding intangible factors

at play in an organization. The BSC has evolved over the last 20 years in various forms. Book by

Paul R. Niven (BSC step-by-step: Maximizing Performance and maintaining results), takes the

theory of BSC forward and makes it more practical for use in an organization.

Two key issues describe the purpose of BSC - effective organizational performance

measurement and implementation of strategy. While the modern financial management

measurements have evolved to economic value added (EVA) concepts, these still leave out many

intangible assets outside the measurement scope. Studies point to the barriers to implementation

of strategy as people more than the resources. However, the fact that 80% of the management

spends less than one hour a day on strategy discussion is perhaps the basic reason of strategy

failures. Creation of a scorecard using simple to follow steps is one gift that Niven gives in his

book and may be used by all companies. Behind-the-scene details such as warning signs to look

for during the creating stages are given. Vision, mission and objectives; the ‘solid rocks’ as the

author puts in are important before a BSC is built. Creating measurement norms for various

factors required to build the BSC and development of performance objectives, finalizing

measures and developing cause and effect linkages and finally setting targets and priorities are

other usable areas. Niven lays down six steps for planning stage starting with the objectives and

taking reader to the need of development of a communication plan. For Development stage, there

are seven steps and culminate in implementation plan. Mr. Niven tackles the implementation

process in a straight forward, step-by-step approach. He takes the reader along and builds the

process like a pyramid, one layer at a time. Mr. Niven uses personal experience and examples of

past failures and successes to drive his point home (Niven, 2002).

Implementation of the BSC inside an organization will always remain a challenge. We have

heard theories on systems of system, but ask any middle level employee in an organization, one

finds a total lack of system integrated thinking. Allocation of strategic resources, reward policy

and implementation are needed if a BSC has to succeed.

Gratton lays down ways to obtain a cohesion and collaborating spirit in an organization. Four

focuses discussed are fostering a cooperative mindset, removing boundaries between people,

giving them a sense of purpose and consequentially increasing their productive capacity. The

author has drawn on her experiences from many organizations including BP and Nokia. While

the book exhorts towards enabling environment, it is difficult to implement academic diagrams

and complicated formulae given by the author. It is extremely difficult to quantify her diagrams

and formulae. The ultimate goal is in enhancing human capacity, which has been accepted as an

important tool in modern knowledge driven economy.

BSC is designed to focus an entire organization on implementing and improving its strategy. In

his book, Niven gives well articulated steps to put BSC into practice. The book focuses on the

details of implementation and the role of leadership in establishing and maintaining the program.

Chapters 5, 6 and 7 are the most critical and crucial to implementation of Niven's step-by-step

methodology. Author provides methodologies, tools and steps necessary to create and execute

BSC in an organization. Its linkage to Lynda Gratton’s book relates to the human capital. Both in

a different way have emphasized on the necessity of intangibles and knowledge as a powerful

resource for any organization. All management thinkers from Peter Drucker to Gratton, Niven or

Kaplan have laid stress on human capital development as a tool for success in the 21st century. It

is the enablement and empowerment, which holds the key.

References

Kaplan R.S. and Norton D. P. (1992). The balanced scorecard: Measures that drive performance,

Harvard Business review, January-February 1992, pp 71-79.

Gratton, Lynda (2007). Hot spots: Why some teams, workplaces, and organizations buzz with

energy and others don't. San Francisco: Berrett-Koehler Publishers Inc. ISBN 978-1-

57675-418-4.

Niven, Paul R. (2002). Balanced Scorecard Step-by-Step: Maximizing performance and

maintaining results. John Wiley & Sons, Inc. ISBN 9780471078722.