Combining the Balanced Scorecard and Leadership as Practice (L-A-P) to Improve Regional Maritime Security Partnering

Authored by Daniel T. Murphy

Introduction

One’s initial reaction to the idea of leadership-as-practice (L-A-P), as it is described by Raelin (2011, 2015, 2016), might be that it risks organizational chaos. A “Great Man” (Raelin, 2015) or Great Woman leader brings order, do they not? While L-A-P might work in some settings such as academia, scientific settings, and the arts, how can it possibly be useful in a setting that requires timely decision-making? How could it work in an organization with a rigid chain-of-command structure and a command-and-control culture? This paper will suggest, not only that L-A-P can work in a military setting, but that it is the best leadership approach for some situations, and specifically within the context of my dissertation problem of practice.

My study will be focused on regional maritime security partnering. I have suggested Kaplan and Norton’s (1993, 1996, 1997) Balanced Scorecard method as a solution that I believe will help Navy fleet commanders improve their decision-making regarding the countries they select as security partners, and the roles they assign to those partners. I believe L-A-P can be combined with the Balanced Scorecard to significantly improve a fleet command’s decision-making ability, and to help make the maritime domain, and ultimately our world, a safer place. In this introduction, I will provide short overviews of my problem of practice, the Balanced Scorecard approach, and L-A-P. The remainder of the paper will describe how L-A-P is synergistic with, and can be combined with the Balanced Scorecard to improve regional maritime security partnering, and ultimately to make a safer world.

The United States National Security Strategy directs military services to develop new and deeper partnerships in each region of the world.   Multi-national integration and interoperation is also emphasized in our National Defense Strategy, National Military Strategy, and in the Cooperative Strategy for 21st Century Sea Power. In a world where security is becoming more complex each year, and where military resources are becoming more and more finite, the challenge for a fleet commander is to make smart partnering decisions with the right countries, to enhance regional maritime security. My dissertation will test my theory that fleet commands will make more effective regional maritime security partnering decisions if they transition from today’s intuition-focused planning approach to a more data-driven approach such as the Balanced Scorecard method used by many commercial sector executives.

The Balanced Scorecard method, developed by Kaplan and Norton (1993, 1996, 1997) has become a standard for documenting and measuring an organization’s business strategy. In a series of collaborative working sessions, an organization creates a graphic value tree model, with cascading strategic objectives from the top level (e.g., increase earnings per share) to the work group and individual levels (e.g., increase cross-selling of services to existing customers). Performance measures and targets are then created to support each strategic objective in the linkage model. The performance measures are typically balanced across four dimensions (financial, customer, internal processes, and employee learning and growth), and include a mix of both leading indicators of future performance and lagging indicators of past performance. The result is a Balanced Scorecard that provides leaders with a “dashboard” to manage their organization.

Raelin (2015, 2016) has suggested that modern organizations operate in fast-moving environments, and therefore cannot rely on traditional individualistic approaches to leadership. He points to a Gallup poll showing 70 percent of employees are either not engaged or actively disengaged with their work. When an organization has 70 percent of its workforce practicing passive (at best) followership, it is at a significant disadvantage vis-à-vis its competitors, especially if the organization is in a highly competitive market segment. Raelin (2016) described how Whole Foods’ decentralized leadership structure allowed an empowered employee to propose an in-store “tap room” for employees to taste local wines and beers. The tap room contributes both to employee satisfaction (internal benefit) and employee product knowledge (market competitive benefit). Raelin (2016) believes organizations should start thinking less about leadership as a set of traits associated with specific individuals, and more about leadership as a set of collective practices among employees who engage together to craft their own role in an organization. Raelin suggests Leadership-as-Practice (L-A-P) occurs when people: (1) understand a problem and begin to design the problem-solving role they can play; (2) scan the environment for resources that can help solve a problem; (3) mobilize with each other to share knowledge and create consensus; (4) weave new information-sharing networks to help address the problem; (5) reflect, redirect, and re-stabilize as necessary; (6) Invite all members to share; (7) confirm inclusiveness has been achieved, even at the cost of creating ambiguity; and (8) reflect collaboratively on how individuals and the group as a whole are challenging their biases and assumptions. Raelin believes not only is L-A-P a more natural form of leadership for people to work together for a common cause, but more importantly, that L-A-P can be actively practiced and consequently embedded and normalized in an organization, and can result in breakthrough performance.

This literature review suggests that there are at least five areas where the Balanced Scorecard and L-A-P can synergistically combine to benefit an organization, whether that organization is public or private. The Balanced Scorecard and L-A-P could be especially useful to a Navy fleet command engaged in regional maritime security cooperation planning. The five areas are: (1) improved leadership and staff connectedness; (2) improved staff collaboration; (3) improved middle-management role clarity and accountability; (4) improved collaboration among partners; and (5) greater reflexivity and identification of potential unintended effects.

Improved Leadership and Staff Connectedness

Multiple studies show that both the Balanced Scorecard and L-A-P improve the connectedness between leadership and the workforce. The Balanced Scorecard helps frame the structure and content of the conversation, and L-A-P helps shift the organization from an individualist leadership paradigm (Raelin, 2016) to a more collaborative and leaderful (Raelin, 2011) paradigm. For example, Chang (2007) studied a Balanced Scorecard-based Performance Assessment Framework (PAF) initiative at the National Health Service (NHS) in the United Kingdom. The NHS PAF helped cascade the organization’s strategic imperatives from the leadership level to the workforce. A key criticism of the PAF was that it was a mostly top-down communication tool. L-A-P could make the PAF a much more powerful leadership tool because it would drive more bidirectional communication between leadership and the workforce. MacBryde, Paton, Grant, and Bayliss (2012, 2014) studied a more successful Balanced Scorecard initiative at Babcock Marine, a military subcontractor supporting the British Navy. Their study found empirical evidence that the Balanced Scorecard improved the communication of strategic direction from leadership to the workforce. Again, the study by MacBryde et al. (2012, 2014) indicated that the communicative benefit of the Balanced Scorecard was more top-down than collaborative. Thus, McBryde et al. (2012, 2014) presents another opportunity for L-A-P to make a Balanced Scorecard initiative more effective.

Perramon, Rocafort, Bagur-Femenias, and Llach (2016) studied Balanced Scorecard initiatives across 253 organizations in Spain. They validated that the cause and effect linkages of the strategic objectives helped align leadership and workforce around the business strategy. Chen, Jermias, and Panggabean (2016) determined that the visual nature of the strategic linkage model alone helped managers improve their understanding of the direction of the business. Hurtado, Gonzalez, Calderon, and Galan (2012) conducted a study at a large printing company, and found that the Balanced Scorecard reduced causal ambiguity around the business strategy at multiple levels in the organization. The study also proved that the Balanced Scorecard could be successfully combined with Capelo and Ferreira’s (2009) strategy mapping method for a more collaborative approach to strategy development.

While the Balanced Scorecard provides a content framework for a conversation between leadership and the workforce, L-A-P can potentially enable a more democratic and workforce-engaged problem-solving and decision-making process. Zerjav, Hartmann, and Amstel (2014) studied a work group engaged in L-A-P in a medical imaging center in the Netherlands. The objective of the study was to construct an L-A-P model for collaborative design to support architecture, engineering and construction-related projects. The researchers recorded and coded team interactions related to a specific problem-solving discussion. They segmented participants by level of experience, and captured total interactions per participant, conversational durations, and self-reference ratios. They found that L-A-P emerged naturally as the session progressed, as participants took ownership of their specific knowledge domains, and as they brokered their knowledge during the problem-solving process. Leaders emerged from the multiple knowledge domains necessary to solve the problem at hand. Presumably, some of the participants brought expertise from multiple knowledge domains, some brought expertise from a single domain, and some others brought expertise that was ultimately not needed by the team.

Imagine in a Navy fleet command where the Balanced Scorecard could be combined with L-A-P for improved leadership and staff connectedness. For example, if the objective was to develop a counter-piracy strategy for the Strait of Malacca, multiple knowledge domains would be required to create an effective and efficient strategy. Counter-piracy operational knowledge would be one such knowledge domain. Similar to the study by Zerjav et al. (2014), naval officers with counter-piracy experience would likely emerge as leaders, and demonstrate a greater number of interactions, longer conversational durations, and self-reference ratios. The difference between Zerjay’s et al. (2014) environment and the fleet environment would be that the Balanced Scorecard could be a conversational starting point. And, rather than the admiral telling the operations team “I want the Indonesian Navy to cover patrol sector X-Ray?” the conversation might begin with “The Balanced Scorecard shows that the Indonesian Navy has four new coastal warfare vessels coming on line in the next three years, and they are retiring two larger offshore vessels. I would like the operations and intelligence team to collaborate on the implications of that change. Then, let’s figure out who should patrol which sectors.”

Improved Staff Collaboration

Multiple studies show that both the Balanced Scorecard and L-A-P each improve internal workgroup collaboration. The Balanced Scorecard enables collaboration by helping frame the structure and content of the conversation. L-A-P works as the enabler of conversational flow. In tangible Navy terms, the Balanced Scorecard is the engine, the measures inside the Balanced Scorecard are the fuel, L-A-P is the discursive lubricant, and the practitioners are the operators and engineers. Together the Balanced Scorecard and L-A-P can bring a work group into a greater rhythm of problem-solving, decision-making, organizational learning and performance improvement. In other words, the result is an engine that hums. Carmona and Gronlund (2003) and Elefalk (2001) studied how the Swedish National Police used the Balanced Scorecard as a communication and consensus-building tool for long-term and short-term strategic goal-setting. Dreveton (2013) conducted a study in the French government’s National Centre for Distance Education (CNED), and concluded that the Balanced Scorecard had improved the organization’s ability to work strategically and collaboratively. Kaplan and Norton (1993, 1996 and 1997) studied multiple private sector implementations of the Balanced Scorecard and found examples where the tool helped organizations reinvent themselves through strategic collaboration and definition. For example, a large insurance company used the iterative and collaborative Balanced Scorecard workshop-based approach as a way for the leadership team to redefine the company as an underwriting specialist. A large metropolitan bank similarly used the Balanced Scorecard approach to collaborate and align its 25 senior executives around a new customer-focused strategy.

Kaplan and Norton (1996, 1997) emphasize that the Balanced Scorecard is not only a dashboard of metrics. The method around the Balanced Scorecard is collaborative, cross-functional, workgroup and working session-based, and evolutionary. Similarly, Raelin (2016) emphasizes that L-A-P is a coordinated and collaborative practice of leadership among participants who develop their own norms to achieve a specific outcome. A member of a workgroup may disagree with the current approach because it conflicts with their preferences, role identity or self-concept. In a Balanced Scorecard environment and even more so in L-A-P, disagreement is encouraged, because it helps the group stop, learn, reflect and push forward in a new direction, or in the same direction with a new perspective.

Like the insurance company described by Kaplan and Norton (1996 and 1997), a Fleet command could use an L-A-P-powered Balanced Scorecard as a collaborative mechanism to re-envision itself from being a regional protector and defender to becoming a regional facilitator and partner-builder. Like the bank described by Kaplan and Norton (1996, 1997), a U.S. fleet command could use the Balanced Scorecard to help senior military officers collaborate around a new emphasis on partnership-building as a primary mission of the organization. While the Balanced Scorecard drives the “what” of the conversation, L-A-P can drive the “how” and the “why”. When the Balanced Scorecard shows the Philippine Navy’s indicators flashing red, and the Malaysian indicators flashing green, L-A-P might be the unfreezing (Lewin, 1947) mechanism that enables participants to say, “Before we select Malaysia to take the lead on a particular mission area, let’s stop for a moment and talk about why the Philippine Navy is flashing red in particular area.”

Improved Middle Management Role Clarity and Accountability

The Balanced Scorecard and L-A-P can also potentially be put to work in the middle management layers of an organization. Kempster and Gregory (2015) believe middle managers are particularly challenged because they have both a vertical relationship role where they must participate in communications upwards with their senior managers, plus they must also execute leadership decisions downward with their own direct reports. Psychological studies have shown middle managers to be vulnerable, ambiguous and insecure. They seek to protect their role and identity, and they are resistant to change. Kempster and Gregory (2015) conducted a case study of middle managers who were confronted with a difficult ethical decision, and they used that case study to develop a practical reflexive L-A-P process to help middle managers work through such challenges in the future. Combining Kempster’s and Gregory’s (2015) L-A-P process with the Balanced Scorecard might be helpful in improving role clarity and accountability in the middle management layer of an organization. As evidenced previously by Perramon, et al. (2016), Chen, et al. (2016), and Hurtado, et al. (2012) the Balanced Scorecard does help connect leadership and workforce (including middle management) in a more tangible way.

A Navy staff at a fleet command similarly functions as a middle management team. They are the department heads who report to a senior leader who is an admiral. They have direct reports who are division officers. They are confronted with quandaries similar to the one faced by Kempster and Gregory’s (2015) middle management team. For example, policymakers and diplomats might suggest a regional partnering strategy that, when viewed from the top, makes sense. However, those on the ground may identify potential unintended consequences that leaders in the upper echelon are not in a position to recognize. Thus, the fleet staff would similarly benefit by having a reflexive process that would result in a more collaborative and presumably better solution. And, presumably, such a solution would more effectively withstand political flak from above, especially if the solution was based on empirical data, such as the data in the Balanced Scorecard. When pressed by the admiral, the department heads might be able to say, “Admiral, we understand that Country X wants to take point on the regional energy infrastructure security mission. However, our team has a dashboard of metrics that will be blinking red if we do this. In our working sessions, we are using collaborative and reflexive approaches that we believe result in sound data-based and consensus-based decisions. If you would like, you can participate with us in those sessions, and maybe together we can come up with a strategy that will help you satisfy the needs of our external stakeholders, yet without resulting in too many undesirable ripple effects.”

Improved Collaboration among Partners

Studies indicate that the Balanced Scorecard and L-A-P can also work in concert to improve collaboration among country partners. Similar to the intramural examples described above, the Balanced Scorecard can enable extramural collaboration by helping frame the structure and content of the conversation. L-A-P would work as the enabler of conversational flow. Together the Balanced Scorecard and L-A-P might bring a regional coalition into a greater rhythm of problem-solving, decision-making, organizational learning and performance improvement.

Sundin, Granlund, and Brown (2010) studied a Balanced Scorecard initiative at a state-owned electric company in Australia. The organization was seeking to balance competing objectives and interests of multiple stakeholder groups. The study showed that the Balanced Scorecard helped the company define stakeholder groups and interests, and also helped all parties agree that stakeholder needs must be balanced in some logical way. In other words, the Balanced Scorecard helped clarify that the organization could not please all stakeholders all the time. The Balanced Scorecard could similarly help a Fleet commander negotiate competing stakeholder needs, for example, between State Department representatives, foreign navies and United Nations representatives.

Folan and Browne (2005) studied a company that supplied automobile parts to manufacturers in Europe and Canada, and defined itself as an extended enterprise (EE). According to Brown & Zhang (1999), the EE manufacturing paradigm redefines organizational boundaries, and helps make an enterprise more competitive. An EE must measure performance not only within the segments of the supply chain which reside within its own company walls, but also the segments that reside outside the company walls, in the organizations that have traditionally been called suppliers and customers. Amazon.com is a good example of an EE in that it relies on other companies as producers and suppliers, and sticks to its core competencies of marketing, selling and managing fulfillment. Folan and Browne’s (2005) study demonstrated that the Balanced Scorecard can help measure and manage an EE, and therefore help enable the shift from a traditional organizational structure to an EE. The study is relevant for regional maritime security partnering, because it demonstrates how the Navy can potentially “unfreeze” (Lewin, 1947) the current traditional regional maritime security partnering paradigm, and replace it with an EE-type paradigm. In today’s maritime security cooperation paradigm, regions of the world have: (1) countries that cannot defend their own interests (customers); (2) neighboring countries that have some excess security forces they share (suppliers); and (3) U.S. military forces (and the United Nations) working between the customers and suppliers in a supplier and brokering role. A Balanced Scorecard built on the EEPM model could, potentially help the U.S. fleet commander manage the regional maritime security situation overall as more holistic EE.

A key question is whether an EE model could work at a fleet command, given the culture of the Navy. I believe the answer is . . . possibly. However, a regional maritime security EE could not be built on the Balanced Scorecard alone. The Navy’s current individualist-based leadership (Raelin, 2016) paradigm is not the best fit for such a solution. For decades, Navy leaders have been trained, evaluated and promoted based on a traditional competency model. While the Navy’s competency model does include a leadership dimension with indicators such as teamwork, organizational skills, inspiration, etc., it does not include skills such as collaboration and reflexivity. However, a Balanced Scorecard combined with a purposeful L-A-P emphasis could enable a transition to a more EE-based regional maritime security cooperation program. Carroll, Levy and Richmond (2008) have specifically proposed an L-A-P as an alternative to competency-based leadership programs. They conducted a survey of 65 leaders who had recently completed L-A-P-based leadership development programs in Australia, and described the dramatic paradigm shift that happens when leaders discover L-A-P possibilities. Participant responses included: “I am still in the process of actively unlearning,” and “It made something unconscious conscious” and “For me, it’s how I articulate me to myself.” These L-A-P-transformed leaders describe the type of reflexive awareness that, when combined with a powerful decision-making tool like the Balanced Scorecard, can result in transformational ideas that can potentially change the security posture of the world. A traditionally trained Navy leader might look up at the Balanced Scorecard on the wall and say “Hmm . . . Vietnam’s antisubmarine warfare capability score is low. Malaysia’s antisubmarine warfare capability score is high. So, let’s partner with Malaysia.” An L-A-P-focused Navy work group might say “Why is Vietnam’s antisubmarine warfare capability score low? Would Vietnam agree with the criteria we are using? What other questions should we be asking?”

Greater Reflexivity and Identification of Unintended Effects

Perhaps the most potent result of combining the Balanced Scorecard and L-A-P would be the enhanced level of intramural and extramural reflexivity that would occur, and the improved ability to proactively identify potential unintended effects of decision paths. Bento, Mertens and White (2016) studied a Balanced Scorecard in a commercial bank. The study compared performance measures related to shareholder value maximization (SVM) and performance measures related to corporate social responsibility. Not surprisingly, researchers found that the SVM measures outweighed the CSR measures in executive decision-making. The study is relevant for a fleet commander, because a regional maritime security Balanced Scorecard would likely present similar quandaries. For example, partnering with highly capable Country A might be the most tangibly beneficial option for U.S. national security interests (the commander’s equivalent of SVM). However, Country B might have the highest “upside” potential in the region. If the objective is simply to improve near-term regional security, then partnering with Country A would be the logical choice. However, if the plan is a more “grand” strategy, Option A versus Option B quandaries will likely abound.

One of the L-A-P participants in the study by Carroll et al. (2008) explained, “In the end it asks that very existential question about who is the person we are creating through our actions and work.” While the Balanced Scorecard alone can present the Fleet commander with an array of red, yellow and green indicators for each country in a particular region, L-A-P can enable the Fleet commander’s team, plus the partner countries in the region, to be able to step back, reflect on the indicators, purposefully blur their eyes a bit, and ask bigger questions, such as “What is the partnership we are creating through our actions and work?” Such reflexive questions create a new starting point that generates even bigger questions such as “What is our definition of regional security?” Through reflexivity and discursiveness, we will surely realize that U.S. and western definitions of security differ from definitions in non-Western and developing countries. And, coming to those realizations in concert with our allies can be a tremendously good thing.

Conclusion

This literature review has demonstrated that there are at least five areas where the Balanced Scorecard and L-A-P can work synergistically for the benefit of organizational performance, and especially in support of improved regional maritime security cooperation. Specifically, the Balanced Scorecard and L-A-P together can improve leadership and staff connectedness, staff collaboration, middle-management role clarity and accountability and collaboration among partner countries. Most importantly, and underlying all the other benefits, is the benefit of greater reflexivity and identification of unintended effects.

In this paper, I chose to focus on L-A-P, which is one of multiple “new” leadership theories which Cunliffe and Eriksen (2011) describe as “post heroic”. Similar to L-A-P, Harris (2007) and Hairon and Goh (2015) found that Distributed Leadership (DL) encourages cooperation between formal and informal leaders, and helps link vertical and lateral leadership structures. Gronn (2008) and Bolden (2011) demonstrated that DL domains of expertise necessary for decision-making are typically distributed across the many, rather than the few, and for that reason, actions should be concertive action and decision-making should be shared. What matters most is not the name of the method, whether it is DL or L-A-P, or whether it is some other “post-heroic” method. What matters is the nature of the leadership method, and whether it is collaborative, reflexive and discursive. On one hand, a Navy fleet commander’s job is to always ask the question, “Is this the best decision for the United States?” On the other hand, even international relations realists such as Henry Kissinger and Hans Morgenthau (1978) do understand that a zero sum or “we win/you lose” approach to national security is not the right answer. We cannot change the world if we define regional security in terms that are beneficial only to the United States. The question for the fleet commander will be “How do we strive for ontology, when we have been only practicing epistemology at best?” How do we redefine what does regional maritime security mean in a particular region of the world. Or, as Freire (1970) might ask, how do we rename the world to make it a safer place.

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