The 80-20 strategic scorecard

All of us are acquainted with the Pareto principle, which says that, for many outcomes, roughly 80% of effects come from 20% of causes. Better said: 80% of results derive from 20% of actions. What if the same principle applied to your credit union’s strategy? Is it possible that a handful of vital measures and projects lay the groundwork for the largest part of strategic success?

Strategic scorecards, and the number of metrics, run the gamut. Decades of strategic advisory service to credit unions reveals most scorecards to have between seven and 15 metrics, with the bulk displaying around 10. But, not all measures and their related projects are created equal. A smaller group are mission critical and deliver results and resources that provide for other measures and projects. However, we often assume that strategic success is not complete unless all measures and projects meet target goals and make a good run at stretch goals.

What if your scorecard was an 80-20 scorecard? What if your CEO and Board determined the few metrics that provided the greatest results toward strategic success and kept strategic conversations and priorities focused on these critical few, knowing that success where influence was greatest would contribute to subsequent progress in the second-level measures of strategy?

 

continue reading »