Using the Balanced Scorecard to Improve Regional Maritime Security Cooperation: Organizational Communication Implications

Authored by Daniel T. Murphy

Introduction

Organizational communication is challenging enough in a commercial organization where top-level strategic objectives are well-defined and ingrained in the culture. In the for-profit world, employees generally have a common understanding that the organization’s objectives are to maximize revenues, minimize costs, and deliver value to the company’s owners or shareholders. While internal communication in for-profit enterprises can still be challenging, leadership at least has that commonly understood set of objectives upon which the organization’s “story” can be communicated. For example, while employees of the New England Patriots organization in Foxboro, Massachusetts do believe that the organization has a mission to give back to the community, we can presume they understand that the organization is a for-profit enterprise that ultimately exists to create wealth for its owners. In the public service and military sector, the story of “why we are here” is not always as easy to tell and sell to employees. Internal communications related to transformational initiatives are especially difficult in the government and military sector, because, for a variety of reasons (e.g., legislated requirements), such organizations are difficult to unfreeze (Lewin, 1947). The United States Navy’s fleet commands, located in geographies across the world, are a good example.

My dissertation focuses on regional maritime security cooperation planning in the fleet commands. The United States National Security Strategy directs military services to develop new and deeper partnerships in every region of the world.   Multi-national integration and interoperation is also emphasized in the 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 regional fleet commander is to make smart partnering decisions that enhance regional maritime security. My dissertation will test my theory that regional fleet commanders will make more effective regional maritime security partnering decisions if they transition from today’s intuition-based planning approach to a more data-driven approach such as Kaplan and Norton’s (1996) Balanced Scorecard method used by commercial sector executives.

The Balanced Scorecard method, developed by Kaplan and Norton (1996) has become a standard for documenting and measuring an organization’s business strategy. In a series of collaborative working sessions, an organization creates 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 identified to support each strategic objective in the linkage model. The performance measures are 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 the organization.

Assuming my research ultimately does support the argument that the Balanced Scorecard will deliver value, there will still be the challenge of implementing the Balanced Scorecard in an environment where leaders and their staff are comfortable with their current subjective or intuition-based approach. Such an initiative will require a multi-dimensional organizational change management (OCM) effort. Organizational communications will be a significant percentage of that effort. This literature review addresses organizational communication within the context of performance measurement initiatives such as the Balanced Scorecard, and especially within the government environment. Several themes emerged from this literature review: (1) Employees usually wish they had more, rather than less communication from leadership; (2) Communication content may be shifting from qualitative to quantitative; (3) Employees recognize organizational communication as something that connects them to leadership; (4) Organizations are recognizing that communication is only one component of OCM; (5) The Balanced Scorecard itself is a powerful communication enabler.

The Workforce Wants More

Multiple studies show that the workforce usually wants more communication from leadership than they are currently receiving. Ruck and Welch (2012) conducted a study of organizational communication across 12 organizations. They determined that most internal communication programs and assessments of those programs focus on communication process effectiveness, rather than employee content needs. The study suggests that most organizations must improve their internal communications, especially during stressful times when new initiatives are being introduced, and during times of economic pressure. Finally, the study proposed a conceptual model to help organizations practice a more balanced approach to communication assessment, considering both channel effectiveness and content satisfaction.

Similarly, Florina (2013) conducted a study across government agencies in Hungary, investigating workforce opinions on both internal and external organizational communication. The study found that leadership granted a greater level of importance on external communications than on internal communications, and that employees were less satisfied with the organizations’ internal communications than with external communications.

Leonard and Grobler (2006) studied employment equity (EE) initiatives within organizations in South Africa. Even when compared with the world’s largest corporate mergers, acquisitions, downsizings, and information technology implementations, the EE transformation efforts underway in South African companies are unprecedented. As a contrast, in the United States, there has been much debate about Disney employees losing their jobs to offshore replacements, and being required to train those replacements (Preston, 2015). Disney employees feel confused, fearful, and resentful. However, the reason for their replacement is relatively tangible. Disney is trying to reduce its cost of human capital. EE transformation in South Africa is also causing “fears, uncertainties and expectations” (Leonard & Grobler, 2006, p. 401). Yet, the reason is less tangible. The South African government is seeking to reverse a history of racial oppression. Leonord and Grobler (2006) conducted semi-structured interviews in a qualitative study across multiple organizations. Like Ruck and Welch (2012) and Florina (2013), they too determined that, even in a highly emotionally-charged transformation environment, internal organizational communication did not receive as much attention as external communication.

The findings in these studies are relevant for my own dissertation research. Trying to transform a Navy fleet command from a subjective and intuitive regional maritime security cooperation planning approach to a more data-based decision-making approach will require a communication plan that targets multiple stakeholder groups. The lesson learned from Ruck and Welch (2012) is to not only worry about selecting the proper communication channel (e.g., Should we use email or Twitter?), but also about content (e.g., Are we giving stakeholders the information they want and need for the initiative to be successful?). The lesson learned from Florina (2013) and Leonard and Grobler (2006) is to have a holistic communication program where external communications to partner countries, policymakers and the public are balanced against internal communications to the military personnel who must make the program work.

Qualitative to Quantitative Shift

Some studies indicate a trend in organizational communication from qualitative to quantitative information. This is something that could be confirmed through a more focused follow-on study. Olsen (2015) described a new research focus on numerical psychology, and how quantitative performance information affects organizational behavior differently than qualitative information. Olsen points to old school psychological studies which argued that personal experiences have a greater effect (the vividness effect) on decision-making than statistical information. However, ready access to quantitative performance data (i.e., through the Balanced Scorecard and other performance measurement tools) may be changing that psychology, and Olson believes this field is worthy of additional research.

Moynihan and Pandey (2006) conducted a national survey of U.S. state government agencies to understand the factors that lead to desirable organizational characteristics. They conducted their study within the new public management (NPM) paradigm that public sector organizations must adopt a greater focus on results, while allowing managers greater decision-making authority. The study found that strong internal communication is a key enabler of the NPM model. They suggest strong communication enables an organization to transition from bureaucratic systems, which have a high emphasis on inputs and few incentives to increasing efficiency, to NPM which emphasizes clear goals and authorities.

Pollitt (2006) described the worldwide trend of government organizations at the federal, state and local levels to adopt quantitative performance measurement programs. Pandey (2015) emphasized the shift has been fundamental and continuous through the remainder of the last decade in the public sector. Kroll (2015) underscored that, despite the trend toward performance measurement, few researchers have studied the linkage between performance measurement and how it impacts organizational performance. Of those that have studied that linkage, a percentage have found that performance measurement itself is not what matters most, but rather how the performance data is communicated and used in decision-making. Kroll conducted a study of 397 museum employees in Germany, Austria and Switzerland, to understand how performance information affects managerial accountability and organizational performance. He found that quantitative information is particularly effective when the organization is in the midst of a transformational change, when there is a greater need for tracking and communicating progress against innovation-related goals, and when established assumptions must be questioned. He found that performance information is less effective when it is used as a new way to track and communicate business-as-usual progress against old objectives. However, Kelman (2006) surveyed 1,600 frontline government contracting officials in the United States, and found that crisis situations inhibit, rather than enable organizational change, especially when employees feel that the “social contract” has been violated, or that the initiative is downsizing-related. Therefore, the correlation of quantitative performance-related communication to organizational performance is worthy of further study.

The shift to a more quantitative dialogue within public sector organizations seems to be real. Conversations between leadership and the workforce are becoming less focused on “How are we feeling today?” and more focused on “How are we performing this month?” Assuming the trend has started to trickle into the Navy’s fleet commands, such a paradigm shift should be helpful to the implementation of a Balanced Scorecard-based approach. In past decades, it would be perfectly natural for the admiral to ask their staff, “So, how did we do with the Indonesian Navy this year? Thumbs up, or thumbs down?” In future years, perhaps the staff will not be surprised if the admiral asks “Show me the numbers for the Indonesian Navy. Let’s start with the capabilities numbers and then talk through enablers and constraints. And how we are measuring up against last year?” Ideally, the new quantitative communications paradigm shift will help smooth the way for a relatively painless Balanced Scorecard implementation.

Creating Connectedness

Multiple studies confirm the criticality of organizational communication in building relationships between leadership and employees. Welch (2012) conducted a qualitative survey-based study which support Ruck’s and Welch’s (2012) findings that organizational communication strategies must focus on employee preferences, rather than manager perceptions. More importantly, the study found that: (1) Internal communication is critical to organizational effectiveness because it contributes to positive relationships between managers and employees, and (2) Paradoxically, internal communication poses a threat, because poor communication can be counter-productive to the relationship. Similarly, Hume and Leonard (2014) conducted case studies at five non-governmental international organizations, and determined that internal communications play a significant tactical role in manager and employee relations. Karanges, Johnston, Beatson, and Lings (2015) used surveys and regression analysis to confirm that internal communication creates workplace relationships based on meaning and worth, and helps improve employee engagement.

The new shift to a more quantitative discourse, plus the new realization of the role played by internal communication in the relationships between managers and employees, sets the stage for significant improvement in Navy fleet commands. The Balanced Scorecard, because it is a data-based tool, can be the mechanism for a more quantitative, more rhythmic, and less anxious dialogue between the fleet commander and his or her staff. And, presumably, more structure, more rhythm, and less anxiety will contribute to more connectedness.

Returning to the Indonesian Navy example, the fleet staff will be able to know, rather than guess, the elements of conversation that the admiral will want to have regarding the Indonesian Navy. In fact, that connectedness can potentially extend even beyond the managerial relationship between the admiral and his or her staff. The Balanced Scorecard would hopefully become the mechanism for a more structured, rhythmic and less anxious dialog between the fleet command and the partner navies in the region. For example, in decades past, a conversation with between the fleet staff and the Indonesian Navy staff might sound like this: “So, how many of your ships will be coming to the RIMPAC exercise in Hawaii this year, and what role do you think you would like to play?” Future conversations with the Indonesians might sound different: “The metrics show that you are significantly growing your coastal warfare capabilities. Other metrics are showing that you have some constraining factors. We have some ideas on the roles we think your navy could play in regional security in the coming years. Let’s look at the metrics, and have a conversation, okay?” In other words, the Balanced Scorecard can be an instrument for what Freire (1970) would call the transition from cultural invasion, where invaders come to teach and transmit, to cultural synthesis, where navy members from multiple countries in the region come together to dialogically learn about the world.

Communication as a Component of Organizational Change Management (OCM)      

Both the public sector, and in the private sector abound with stories of organizational transformation initiatives that either failed, partially failed, or succeeded, but with a significantly larger measure of fear, anger, confusion, and resentment than was necessary. The good news is that, especially in the last two decades, organizations have become more adept at handling the human dimension of organizational transformation. Today’s information system implementations, organizational restructurings, mergers, acquisitions, and other transformational initiatives, typically include, not only a training work stream and an internal communications work stream, but also an overarching OCM work stream. Change agents have begun to recognize and address the complexities of creating change in organizations where “man is an animal suspended in webs of significance he himself as spun.” (Geertz, 1973, p. 5). Thus, an organizational analysis-based OCM work stream has become a critical component of most transformation initiatives, and internal communication is typically a sub-stream of a larger OCM work stream. Researchers have begun to study OCM successes, partial successes and failures.

Nograšek (2011) studied OCM as a critical success component in e-government implementations. The study identified the complex challenges of implementing e-government solutions. For example, e-government service often requires integration across multiple government agencies. Government agencies typically have distinct stove piped organizational cultures. Each has their own norms, and languages. Imagine, for a moment, if a state environmental police department working with a state department of motor vehicles, in order to automate a vehicle registration process. Both agencies might typically use the word “risk” in their daily business conversation. However, one agency defines risk in transactional terms, while the other defines risk in environmental terms. E-government initiatives also have a multitude of external stakeholder groups, each with their own distinct concerns and languages. Vehicle registration customers might define risk in an entirely different way. They might be most concerned about the risk that their vehicle registration will be mishandled by a government bureaucrat. Nograšek’s (2011) study sought to develop a conceptual change management model that could be used across all e-government implementations. More importantly, the study may underscore the paradigm shift described by Mumby (2013), where scholars have begun to understand organizations as structures of meaning, has begun to trickle from academia into practice. Apostolou, Mentzas, Stojanovic, Thosenssen, and Pariente Lobo (2011) also studied e-government initiatives, found consistent communication as critical to success, and suggested a model that brings users, designers and developers into a more collaborative development cycle.

Lawler and Sillitoe (2010) conducted a study across multiple Australian universities undergoing significant changes to their government funding processes. The changes were causing high levels of personal uncertainty for the staff. Rather than attacking the issue as a communication problem, a tactic that would be typical in decades past, they combined insights from Senge (1990) and Kotter (1996), to suggest a set of principles for a more holistic set of OCM principles. Specifically, they argued that an organization in transition must: (1) learn from its mistakes; (2) conduct solution consultations with stakeholders before making decisions; (3) conduct consultations regarding change implications with stakeholders; and (4) provide training and development to support the change. While Lawler and Sillitoe (2010) did not propose a communication solution per se, they did propose a solution where every principle has a significant communication element.

Fernandez and Rainey (2006) studied OCM in the public sector and developed a set of eight success factors based on a consensus of researchers and experienced observers. Six of the eight are either explicitly internal communication-related or discursive in nature. Cunningham and Kempling (2009) tested a similar set of nine success factors across three public sector organizations in Canada, through a series of ten interviews. Six of their nine OCM success factors either explicitly internal communication-focused or communication-related. Kickert (2014) studied the conditions for successful OCM in six government ministerial organizations in the Netherlands. Kickert combined Kotter’s (1996) and Fernandez and Rainey’s (2006) findings into a set of eight OCM success factors: (1) establish a sense of urgency; (2) develop a vision and strategy; (3) communicate the change; (4) ensure top-management support and commitment; (5) build external support; (6) provide resources; (7) institutionalize the change; (8) pursue comprehensive change. Similar to Lawler and Sillitoe’s (2010) principles, seven of the eight are either explicitly internal communication-focused or communications-related in nature. Kickert discovered that OCM success factors varied considerably by organization and by initiative. More importantly, however, he discovered that the third and fourth success factors, communicating the change, and top management support and commitment, were by far, the most critical conditions for success. Fernandez and Rainey’s (2006) third and fourth success factors are nearly identical to Kickert’s. However, Fernandez and Rainey stress the considerable challenge of these two success factors in the public sector. For example, career civil servants may be more motivated by security and caution than their private sector counterparts. They have a tendency to “wait out” a new initiative until the current political appointees (which career civil servants sometimes call the “summer help”) are replaced by the next group of political appointees. Also, political appointees are political. While a particular initiative might be good for the organization, good for the tax payers, and good for the employees, the initiative may have inherent political risks to which an appointee might not want to be exposed. Such obstacles require creative and sometimes rigorous OCM tactics to overcome.

Cunningham and Kempling (2009) stressed the importance of building a guiding coalition. The good news is that, at a Navy fleet command, that coalition will already have been partially constructed. A Navy fleet leadership team, which consists of the fleet commander and his or her department heads (called “J-codes”), will already have an established and ongoing meeting cadence (called the commander’s “battle-rhythm”). As explained in the previous section, the keys to success will be to: (1) change the language of that coalition from a intuitive and subjective nature, to a more quantitative nature, and (2) extend that coalition from what it is today, with U.S. forces guiding, and other countries following, to what it should become in the future, with all countries collaborating, and using empirical data as a starting point to a strategic conversation and Freire’s (1971) cultural synthesis. The lesson learned from these studies is that a successful Balanced Scorecard implementation at a Navy fleet command will require a strong emphasis on communication of the change, and vocal top management support and commitment. Also important will be to keep in mind that, while each of the studies described in this section emphasized communication as a key to success, those same studies emphasized that communication is but one of the dimensions of a successful transformation effort.

The Balanced Scorecard as a Communication Enabler

Finally, several researchers have studied Balanced Scorecard implementations both in the public and commercial sectors, and have focused, not on how the Balanced Scorecard must be communicated to be successful in an organization, but rather how the Scorecard itself functions as an enabler for organizational communication. While the Balanced Scorecard does not help an organization decide when, where and how to communicate, it absolutely can help an organization determine what to communicate. A Balanced Scorecard can contribute to the qualitative to quantitative shift described earlier in this paper, and it can help build connectedness between leadership and employees.   Kaplan and Norton (1997, 1993) conducted case studies across multiple industries and countries, and determined that organizations achieved a variety of communications-related benefits from the Balanced Scorecard including: (1) communicating the strategy throughout the company, and (2) aligning business units, workgroups, and employees with the business strategy.

For example, MacBryde, Paton, Grant, and Bayliss (2012, 2014) studied how the Balanced Scorecard was used by the United Kingdom (U.K.) Ministry of Defense as a communication tool to manage the relationship between Her Majesty’s Naval Base Clyde, and a Royal Navy defense contractor. Also in the United Kingdom, McAdam and Walker (2003) studied how 13 local governments used the Balanced Scorecard to build strategic consensus, to focus attention and subjective analysis on specific municipal issues and to minimize information overload.   Chang (2007) studied the implementation of a Balanced Scorecard-based Performance Assessment Framework (PAF) at the National Health Service (NHS) in the United Kingdom. The PAF was intended to operationalize the U.K.’s national healthcare strategy, communicate that strategy down to the local level, and measure, track, compare, and communicate the performance of local health authorities.

Muldrow, Buckley and Shay (2002) studied Balanced Scorecard implementations at the U.S. Mint and Environmental Protection Agency, and concluded that the Balanced Scorecard helped those organizations transition from hierarchical and non-participatory cultures to more communicative cultures that reward creativity and innovation. A U.S. fleet command would similarly want to transition its culture to a more communicative and collaborative data collection and analysis rhythm. A more communicative, collaborative and rhythmic culture would presumably result in better data, and better data would presumably result in better decision-making regarding partner selection and role assignments.

Dreveton (2013) studied the Balanced Scorecard implementation in the French government’s National Centre for Distance Education (CNED), and concluded that the Scorecard provided a new way for the organization to work strategically and collaboratively, and specifically helped the comptroller of the organization communicate his role as a key enabler of strategic decision-making. The Balanced Scorecard could similarly communicate role clarity for regional maritime security partnering in the Navy fleet commands.

Perramon, Rocafort, Bagur-Femenias, and Llach (2016) studied Balanced Scorecard implementations across 253 organizations in Catalonia, Spain. The authors validated the effectiveness of the tool in improving organizational performance, especially in communicating of cause and effect linkages of strategic objectives. Chen, Jermias, and Panggabean (2016) determined that the visual nature of the Balanced Scorecard’s strategic linkage model alone helps communicate the business strategy from leadership to management, and helps managers make better business decisions.

Hurtado, Gonzalez, Calderon, and Galan (2012) studied a Balanced Scorecard implementation at a large printing company in Spain. The Balanced Scorecard helped reduce causal ambiguity regarding the business strategy. Similar to the findings by Perramon, Rocafort, Bagur-Femenias, and Llach (2016), the study showed that the Balanced Scorecard helped managers communicate how strategic objectives at the top of the organization cascade down to, and are supported by tactical objectives at the work group level. The researchers also demonstrated that the Balanced Scorecard could be combined with Capelo and Ferreira’s (2009) mapping method, to provide leaders and employees a more visually communicative strategy. The combination of the two methods could potentially be useful to the Fleet command as they endeavor to communicate and align perceptions versus realities of maritime security partner roles and responsibilities within a region. Interestingly, the fact that the Balanced Scorecard’s strategic linkage model helps make an organization’s strategy more visually communicative, Lewin (1947), Giddens (1979, 1984), Freire (1971) and Schein (2010), might argue that that is a bad thing, since it helps keep the culture frozen. Mumby (2013) might argue that the organization instead needs unfreezing tools that enable, rather than inhibit the paradigmatic shift from pragmatic to critical/purist.

Sundin, Granlund, and Brown (2010) studied the Balanced Scorecard initiative at a state-owned electricity company in Australia. In the first part of the study, the researchers demonstrated that the organization had stakeholder groups with multiple competing objectives and interests. In the second part of the study, they examined how the company’s Balanced Scorecard helped communicate the cause and effect relationships between strategic objectives, and it helped facilitate agreement that the interests of competing stakeholder groups must negotiated and balanced. The Balanced Scorecard could similarly help a U.S. fleet commander negotiate competing stakeholder needs, for example, between U.S. State Department representatives, foreign navies and United Nations representatives.

Conclusion

This literature review demonstrates that there is already a great deal of organizational communication-related research that is directly relevant to a Balanced Scorecard-type initiative. Five themes emerged from this literature review. First, existing research shows that employees often want more, rather than less internal communication from leadership. Second, because organizations are tending to increase their use of quantitative performance measurement methods and tools, they have more performance information to share with employees. As a result, the content of internal organizational communication may be shifting qualitative to quantitative. Third, research suggests that employees increasingly recognize organizational communication as something that connects them to leadership. Fourth, leadership seems to be realizing that organizational communication is only one component of the larger OCM context. Successful organizational transformation requires a holistic OCM approach. Whether real world organizations are transitioning from a pragmatic to a more purist (Mumby, 2013) paradigm is worthy of follow-on study. Fifth, the Balanced Scorecard itself has become recognized as an enabler of organizational communication, because it helps ensure that leaders and employees are singing from the same sheet of music regarding the organization’s strategic direction.

The themes in this paper suggest a multitude of potential paths for future study. For example, is it true that organizational communications are shifting from qualitative to quantitative? What is the correlation between the quality and quantity of organizational communications and leadership-employee connectedness? Do organizations that have implemented the Balanced Scorecard have higher communication satisfaction scores using frameworks such as the Communication Satisfaction Questionnaire (Downs and Hazen, 1977)? One exciting possibility is to explore how the Balanced Scorecard could be coupled with a community of practice approach to create rhythmic and communicative regional maritime security partnering programs. Wenger, McDermott and Snyder (2002) describe a community of practice approach that could overlay and enable a Balanced Scorecard-based partnering program: (1) Design the program for evolution; (2) Create dialogue between internal and external, and public and private sector stakeholder groups; (3) Focus on value (mission); (4) Combined familiarity and excitement; and (5) Build a rhythm. Hercheul (2011) argues that such communities can actually build social capital and emotional support, which is crucial for building the kind of regional relationships that can make the world a safer place.

As the world security environment continues to become more complex, and as budgets are likely to tighten, fleet commanders must make smart partnering decisions that enhance regional maritime security, while making best use of increasingly finite resources. My dissertation will suggest and test whether regional maritime security partnering decisions can be optimized through a more data-driven approach such as the Balanced Scorecard method, and whether better decision-making will result in a more secure region, and a more secure world. Yet, implementing a data-based decision-making tool in an environment where leaders and their staff are comfortable with their current intuitive-based approach will be no easy task. A Balanced Scorecard implementation in a Navy fleet command will require a holistic OCM approach, with organizational communication as a key component. The good news is that the Balanced Scorecard will not only be dependent on OCM, it will be an enabler of OCM.

 

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