In my previous post, I discussed the easy part of building a scorecard and left us thinking about the hard part of managing with the scorecard. I tried to distinguish between the process of creating objectives and measures with doing something about having these objectives and measures. I believe strongly in the strategy review meeting. This isn't a once a year report, but it is a quarterly meeting where senior executives actually discuss strategy.

Pablo Eisenberg rightly points out the crisis facing charitable giving today in today's Wall Street Journal Report. He uses the better of a full page of print to outline his recommendations for how foundations and others can make a difference for nonprofits and their beneficiaries. While one can agree or disagree with the list – readers of this blog no doubt agree that to formalize strategy management, reporting and execution using a Balanced Scorecard would go a long way to addressing the challenges the author outlines.

Building a Balanced Scorecard is fun. We have been helping organizations determine what their strategy map, measures, and initiatives are for over 10 years. The process and the product are both enjoyable. Imagine spending time waxing on about your strategy and your objectives. Looking at your past performance and pondering the future opportunities. Your leadership team then gets together to debate the one-page view of your strategy, the strategy map, as Norton and Kaplan call it. This is fun stuff.

It is actually not all that bad to then determine key measures. What will drive the right behavior? How high or low of a target should we set? What initiatives are we working on today and what should we be focused on in the future? These are all intellectual challenges that a leadership team usually embraces. For the ambitious, there is a follow-on exercise to link the business units and support services to the strategy of the organization and create and alignment matrix with objectives and measures. While some of this takes more time than other things, this is stimulating work.

The real challenge is what to do after you have built your Balanced Scorecard. Many leadership teams will talk about the value they received during the "construction" phase of work, but if you stop there, you will fall short of the true benefits of the BSC. Organizations should begin the process of managing their strategy. Some people think that producing an annual report based on their Balanced Scorecard measures is the next logical step. This report many times is given to the board of directors or submitted to a committee of the board. I would argue that this is called reporting and not managing.

Managing with the Balanced Scorecard means that on a regular basis, the leadership team of an organization creates and looks at the information in a Balanced Scorecard, discusses what it means, what the impact is on the organization, and what actions should be taken as a result. This is a lot of work. With this work comes a reward. Members of your organization's leadership start acting like a team and have a good command of all of the components of the organization, not just their silo. Adjustments are made throughout the year, rather than just at budget time. The organization begins driving results, not just reacting to them. Meetings not only become interesting, they become important.

In the next few posts, I'll talk about some of the components of managing your strategy, and I don't want to discount the fact that building a scorecard is important. It is the first step. You just must not forget that there are several steps in the process.

A few years ago, V. Kasturi Rangan from Harvard Business School argued that nonprofits need to have more than just a lofty mission to survive. In his article, entitled "Lofty Missions, Down-to-Earth Plans," he argued that nonprofits need a systematic method that connects their callings to their programs.

I was perusing an article from the Nonprofit Times published back in November of last year, Layoffs Hitting Nonprofits Despite Need Increasing. The article of course focused on the fact that in an economic crisis, the need for social service nonprofits rises greatly, but the ability of these organizations to raise money goes down. Thus the nonprofits have to cut staff in times of increased need. How do they do it?

The Wall Street Journal weekend edition last weekend covered Eli Broad and his philanthropy. If you don't know, Mr. Broad is retired from for-profit jobs where he founded two Fortune 500 companies. He lives in Los Angeles and manages a foundation with $2.1 billion. As Ms. Riley, from the WSJ points, out, he is living by the Carnegie mantra of "Who dies with wealth, dies in shame."

I read an interesting article in the Harvard Business School, Working Knowledge website. It is essentially a book review of esteemed professor Michael Beer. His new book is called High Commitment High Performance: How to Build a Resilient Organization for Sustained Advantage. The book explores long-term successes like Southwest Airlines, Johnson & Johnson, Hewlett Packard, McKinsey, Goldman Sachs, Toyota, etc. It got me wondering about nonprofits leveraging these same skills.

Yesterday, InsideNGO kicked off their week-long annual meeting in Washington, DC. The first few days focus on Finance, Grants, Contracts, and Personal/Professional Development. The next few days focuses on Human Resources. Ascendant and one of our clients, Rare, gave a presentation yesterday afternoon.

I had the pleasure of being at the best practices workshop and the awards ceremony at the Washington Post today. This was the 15 year anniversary of the award for excellence in nonprofit management. The Center for Nonprofit Management manages the award program. This year, there were some great finalists.

The Wall Street Journal reported today that the stimulus plan had $100 billion in it for school systems, with only one catch to the money. You had to demonstrate that you were making progress in improving the performance of students. This is money on top of all of the foundation money that is available to the same schools with the same challenge. "Show me you are making a difference."