ABSTRACT:
This article explores the relationship between the Balanced Scorecard (BSC)
and the 360-degree Knowledge Management (KM) model. It shows how 360-degree KM
and the Balanced Scorecard can not merely co-exist but complement each other so
a user gets the maximum results from both.
Keywords: 360-Degree Knowledge management, Balanced scorecard
1.
The 360- Degree KM Model - Recapitulation
The 360-degree KM model (Hariharan, 2005) enables a single-window access to all Knowledge within and outside an organization that is relevant to the most critical aspects of the business. The model shows how to organize this Knowledge around your most critical business measures. 360-degree KM enables companies to maximize their effectiveness in managing and deploying knowledge relevant to improving performance on their top priority business measures.
The 360-degree KM model helps to keep KM relevant to the business, to smartly focus KM efforts and to ensure real business results and performance improvements through KM.
Most companies today suffer not from lack of knowledge, but from sub-optimal
ability to effectively deploy all available knowledge and expertise
relevant to their top priority business measures – resulting in non-attainment
of their full potential in business performance.
The 360-degree KM model attempts to help organizations unleash the power of integrating knowledge and expertise along six Knowledge Dimensions for each of their top priority business measures – and thereby help raise their business performance to its full potential.
2.
How The Balanced Scorecard Helps 360-Degree KM
The Balanced Scorecard (BSC)
concept pioneered by Kaplan and Norton and adopted in various forms by numerous
organizations across the world essentially offers a holistic or “balanced”
measurement system. It includes a combination of measures of outcomes or
“lagging” measures and enablers or “leading” measures under four “perspectives”
– Financial, Customer, Internal Business Process and Learning & Growth. It
also focuses on “linkages” among these measures to ensure that your scorecard
is not merely a bunch of disconnected measures, but a powerful combination of
inter-linked measures that represent the health of your organization and work
in tandem to lead to the achievement your top one or few ultimate business
objectives. For most business organizations, the “ultimate” objective is a
financial objective.
Organizations with a Balanced
Scorecard (or a similar balanced measurement system called by any other name)
already in place are at an advantage in getting the maximum results from
360-degree KM. This is because of the following.
2.1. Your Top Priority Business Measures Are
Already Identified
If you have a BSC, your task of identifying and measuring (or putting in place a measurement system for) your top priority business measures is already taken care of. If you have a BSC you need not – rather, you must not – identify another set of measures to focus your KM efforts on. The measures on your BSC are your most critical business measures. You may select all (or a sub-set to begin with) of your BSC measures as your top priority business measures for your 360-degree KM program.
Remember the first two questions that 360-degree KM asks you to answer are “Do I know what my most critical business measures are?” and “Do I have a measurement system that helps me know how we are doing?” If you already have a BSC, your answer to both these questions is “Yes”.
2.2. Alignment With
Business Objectives And Focus
Two key objectives of 360-degree KM are to keep KM relevant to your business and to focus your KM time and resources effectively.
The BSC will help you in doing this. At the core of your 360-degree KM model will be your BSC measures. By focusing your KM efforts on all or a sub-set of the measures that form part of your BSC, you will be able to keep KM relevant to your business and focused on your most critical business measures.
2.3. Real Business Results
Focusing your KM efforts around your BSC measures will enable you to ensure real business results and performance improvements through KM. This is because the BSC consists of measures that are critical to sustained success of your business.
2.4. Cultural Alignment
BSC organizations will in general be culturally in an advanced state of preparedness to get the maximum results from their 360-degree KM program as compared to organizations that haven’t completely thought through and identified their top priority business measures and put in place systems to measure and monitor these regularly. BSC organizations will also have a culture of sharp focus by every employee on a relatively few but vital measures and, more importantly, ruthless plugging of any “leak” of efforts, time or resources on anything that is not directly relevant to a top priority business measure. Such a culture is highly conducive for 360-degree KM to thrive.
3.
How 360-Degree KM Helps Your Balanced Scorecard Initiative
Having a 360-degree KM
initiative in place will benefit your BSC initiative by helping to maximize
performance on each of the measures on your BSC.
360-degree KM does this by
enabling your organization to fully leverage all internal and external
knowledge and expertise relevant to each BSC measure. It will also facilitate
the identification of subject-matter experts around each of your BSC measures,
knit them into communities and provide each of your communities of experts (which
is around one of your BSC measures) a single-window
access to each other and to the repository of knowledge relevant to improving
performance on their measure. It promotes collaboration among your experts so
that each community works as a common pool of talent available to all parts of
your organization, and eliminates re-invention.
Synergy not limited to the “Learning & Growth” perspective
There have been several articles
(all entirely valid and written in different contexts) that have talked about
the relationship between KM and the Learning & Growth perspective of the
BSC. It must be pointed out here that the synergy between 360-degree KM and the
BSC is not limited only to the Learning & Growth perspective of the BSC,
but applies to all four perspectives. If your organization has a BSC, you would
have measures under all four perspectives – Financial, Customer, Internal
Business Process and Learning & Growth. These same measures would also be
your top priority business measures for KM. Therefore, 360-degree KM is
relevant to all your BSC measures.
Do not lose focus
Some organizations create a “KM
Scorecard” and similar scorecards for other strategic initiatives. Always
remember your organization has only one overall business scorecard and never
lose sight of this. Your business objectives and measures are all on this
scorecard. The top priority business measures for your 360-degree KM program
must be from this scorecard only.
If you find it useful to have a
subsidiary scorecard to track “enablers” of your KM program – e.g. statistics of
knowledge sharing and replication activity, employee engagement in KM and so
forth – have a “KM Scorecard” by all means. In fact it is important to track
these enablers for sustained business results through KM. But you must ensure
that your KM Scorecard doesn’t become an end in itself or make you lose focus
from your ultimate business scorecard.
4. Conclusion
60-degree KM and the BSC support
each other – and each of the two benefits from the other. The synergy between
360-degree KM and the BSC is not limited only to “Learning & Growth”, but
applies to all four perspectives of the BSC. This does not mean that having a
formal Balanced Scorecard initiative is a pre-requisite to 360-degree KM.
Neither is it suggested that 360-degree KM will not work without the BSC.
However, as we have seen, there is very considerable synergy between these two
strategic tools and smart organizations will not only deploy both of these, but
will obtain best results by ensuring that the two initiatives work in tandem
and complement each other.
5.
References
Hariharan, A. (2005), “360 Degree Knowledge Management”, Journal of Knowledge Management Practice, May 2005
About the Author:
Arun Hariharan is a Knowledge Management, Quality and Performance Management practitioner. He has worked with the leadership of several leading organizations in deploying KM & Quality related strategy with proven and sustained business results. He can be contacted at arun_hariharan@rediffmail.com.