{"id":63,"date":"2018-03-23T16:38:43","date_gmt":"2018-03-23T16:38:43","guid":{"rendered":"http:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/?p=63"},"modified":"2024-09-08T16:09:23","modified_gmt":"2024-09-08T16:09:23","slug":"the-intangible-balance-scorecard","status":"publish","type":"post","link":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/the-intangible-balance-scorecard\/","title":{"rendered":"The Intangible Balance Scorecard"},"content":{"rendered":"

Since Robert Kaplan and David Norton\u2019s hugely successful Balance Scorecard approach to strategic business management, first published in the Harvard Business Review<\/em> in 1992, organizations have sought to measure a variety of different aspects of performance. While there are many different elements of a business to measure, \u2018Quality, Cost and Delivery\u2019 has always been a fantastic way to give an overall picture of the products and services that a company provides. Together, these components go some way to encapsulate value. Customers care about all these elements and consequently, organizations do too.<\/p>\n

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These metrics are very much grounded in the physical, though. As more and more of our work moves into the intangible, digital world, is there a need for a new digital Balance Scorecard?<\/p>\n

In Eric Almquist, John Senior and Nicolas Bloch\u2019s September 2016 Harvard Business Review<\/em> article The Elements of Value,<\/a><\/em> they argue that such dimensions appear merely within the \u2018functional\u2019 realm and that much of what we value is tied up in harder-to-define emotional, life-changing and socially impactful ways.<\/p>\n

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Almquist, Senior and Bloch, 2016<\/p>\n<\/figcaption><\/figure>\n

They cite Amazon Prime as an innovation, which in 2005 sought merely to deliver reduced costs and saved time by providing unlimited two-day postage services for an annual fee. As the product evolved though, it expanded to include streaming services and unlimited photo storage on Amazon servers, which all help users to feel they are part of an exclusive club, packed full of multiple benefits.<\/p>\n

At a recent conference discussing the \u2018Future of Services\u2019, Rory Sutherland<\/a> explained how David Rock\u2019s \u2018SCARF\u2019 model, which seeks to describe the different social concerns that drive human behaviour and motivate people, is a great way to explore digital services.<\/p>\n

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  1. Status<\/b>\u00a0\u2013 our relative importance to others.<\/li>\n
  2. Certainty<\/b>\u00a0\u2013 our ability to predict the future.<\/li>\n
  3. Autonomy<\/b>\u00a0\u2013 our sense of control over events.<\/li>\n
  4. Relatedness<\/b>\u00a0\u2013 how safe we feel with others.<\/li>\n
  5. Fairness<\/b>\u00a0\u2013 how fair we perceive the exchanges between people to be.<\/li>\n<\/ol>\n

    He discussed how Uber\u2019s app appealed to customers on many of these levels. By enabling the customer to know about the driver they were about to engage \u2013 providing a name and picture, for example \u2013 the firm helped allay any fears the customer might have (sense of safety with others). They could track their driver on a map, turning ordering a taxi into more of a controllable act (sense of control over life, sense of what the future holds). The fact that no money changes hands also appeals to notions of \u2018status\u2019 and \u2018fairness\u2019. We can see that this digital example appeals to all five of the above SCARF aspects proposed by Rock.<\/p>\n

    It\u2019s clear that these dimensions are very important, yet in nature they are very hard to quantify. Perhaps that\u2019s why often some of the best digital leaders have an intuition and feel for the development of services that solve customers\u2019 problems? I\u2019d doubt that it\u2019s as simple as that though, and when musing on the intangible alchemy of value, it\u2019s worth discussing another elusive art \u2013 leadership.<\/p>\n

    There can be no doubt that in this ever-connected age, \u2018Collaborative Leadership\u2019 is critically important. It is built on the premise that \u2018the sum of the whole is greater than the sum of its parts\u2019, and that through inspiring cooperation, across functional boundaries between key organizational players, great things can be achieved.<\/p>\n

    Trust is paramount. Within a collaborative leadership space, personal crusades and preconceived notions of expertise should be left at the door, ideas should be shared and discussed, and real and honest feedback provided, all of which requires immense amounts of trust. Trust from the leaders that this process is worthwhile and trust from the teams that their voice will be heard meaningfully and fairly.<\/p>\n

    It seems to me that there are two key dimensions to building this trust: visibility and experimentation. In other words, does it look like they are being open and honest with me and are these observations proving to be correct?<\/p>\n

    So far, I\u2019ve discussed that much of what comprises value can be seen to be \u2018intangible\u2019, trust to a feeling rather than a physical force, and yet I believe that the digital world, with its digital footprints and huge appetite for data, can really help to positively build trust. Sharing data across value streams can be hugely advantageous to all parties engaged in the work \u2013 for example, electronic point of sale data from a store is shared with suppliers to help them produce what\u2019s required. Open-source software enables huge amounts of innovation to occur. Usage data, through \u2018fail fast\u2019 experimentation loops, also provides the visibility required for successful experimentation.<\/p>\n

    It\u2019s here where I think that digitization can help to explore all of the mysterious \u2018elements of value\u2019. Through quick learning loops, achieved from limited releases and intensive customer monitoring, the business can quickly better understand the value of the services it offers through iterative feedback. So, while a great deal of alchemy is required to fully explore the value an organization provides, sharing data helps to build trust, cooperation and, most importantly, helps leaders to determine whether everything is moving in the right direction.<\/p>\n","protected":false},"excerpt":{"rendered":"Since Robert Kaplan and David Norton\u2019s hugely successful Balance Scorecard approach to strategic business management, first published in the Harvard Business Review in 1992, organizations have sought to measure a […]","protected":false},"author":151,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[7,5,12,3,6,8],"tags":[],"custom_author":[44],"class_list":["post-63","post","type-post","status-publish","format-standard","hentry","category-innovation","category-lean","category-operations","category-organisational-culture","category-service-improvement","category-value","custom_author-sarah-lethbridge"],"jetpack_sharing_enabled":true,"meta_box":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/posts\/63","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/users\/151"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/comments?post=63"}],"version-history":[{"count":7,"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/posts\/63\/revisions"}],"predecessor-version":[{"id":990,"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/posts\/63\/revisions\/990"}],"wp:attachment":[{"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/media?parent=63"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/categories?post=63"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/tags?post=63"},{"taxonomy":"custom_author","embeddable":true,"href":"https:\/\/blogs.cardiff.ac.uk\/sarahlethbridgelean\/wp-json\/wp\/v2\/custom_author?post=63"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}