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Creating a Gross National Happiness Scorecard

Creating a Gross National Happiness Scorecard adapting Balanced Scorecard and Appreciative Inquiry Methodologies


by Pamela Schreiner


Introduction

This concept paper was first presented at the “Second International Seminar on Gross National Happiness”, which was part of the “Rethinking Development” conference in Antigonish, Nova Scotia, 2005. The article aims to explore a means for operationalizing Gross National Happiness by using two organizational change methodologies -- Balanced Scorecard and Appreciative Inquiry. While these methodologies are used in large and small, private and public sector organizations, it is proposed that they can also be applied to optimizing Gross National Happiness at the community and country-wide levels.

We will begin with a very brief background of Gross National Happiness (GNH) and overview descriptions of Balanced Scorecard and Appreciative Inquiry. In the 1980’s the country of Bhutan was implementing modernization concepts, one of which was to consider GNH as a replacement to Gross National Product (GNP) as an indicator of success.  Unlike GNP, which is only concerned with the economy, GNH is also concerned with the well-being of the people.

Balanced Scorecard is a strategic management system that translates the organization’s strategy into operational objectives. The organization’s strategy is mapped out, performance measures are identified and strategic initiatives are planned. Corporations are increasingly moving from managing using financial measures to managing using a Balanced Scorecard. Similarly, countries can move from using Gross National Product to Gross National Happiness as a measure of citizen well being.

Appreciative Inquiry uncovers an organization’s areas of excellence, best practices and innovation. It translates these findings into goals that become the ideals for the daily processes and practices of the organization’s work.

Both of these methodologies are practical. They include adaptable processes for implementation. They also complement each other. Appreciative Inquiry keeps the focus on a positive approach, while Balanced Scorecard provides the data to determine progress and make course corrections. Both of these methods also ensure a holistic or whole-systems view.

It may be useful for the reader to consider applications of Balanced Scorecard and Appreciative Inquiry as they read the following explanations of these methodologies.

Balanced Scorecard

As a strategic management system, Balanced Scorecard goes beyond planning strategy and also concerns itself with implementing and managing strategy on an ongoing basis. Balanced Scorecard is a framework that helps organizations translate strategy into operational objectives that drive both behaviour and performance. Although Balanced Scorecard uses data for implementation, it is more than a measurement system; it is a management system.

Balanced Scorecard was developed by Robert Kaplan and David Norton in the 1990s. Historically, organizations were managed based on financial data. Kaplan and Norton developed a system that takes all aspects of an organization into account. Not only is management based on financial data, it also uses data such as that on customers, processes and employees. It is a more holistic approach for managing the organization.

The following possible steps for developing a Balanced Scorecard illustrate some of the structural concepts. Since Balanced Scorecard has been used predominantly in the private sector, the example that follows uses for-profit strategies.  However, we will illustrate later how the same concept can be used in not-for-profit initiatives:

1. Identify the guiding ideas of the organization. This includes identifying the vision, mission, etc. The guiding ideas provide the general direction of the organization.

2. Build the strategy map. The strategy map tells the story of the organization’s strategy. It imbeds the long-term strategy. I have created the following strategy map for illustrative purposes. As can be seen, the map contains four most commonly used perspectives: Financial, Customers, Internal Business Processes, and Learning & Growth. However, many organizations define their own unique perspectives. The bubbles are strategic objectives. They identify the key strategies of an organization in each of the perspectives. A strategy map may contain from 6 to 25 strategic objectives. The arrows show the cause-and-effect linkages between the strategic objectives. For example, the assumption behind the arrow from “Delighted Customers” to “Be Profitable” is that if customers are delighted with the product, the company will be more profitable.

Figure 1  Example of a for-profit Strategy Map


3. Identify performance measures. Performance measures are indicators of the health of the organization. For each of the strategic objectives in the strategy map, identify a performance measure. For example, the performance measure for “Be Profitable” might be corporate profit. The performance measure for “Delighted Customers” might be the result of a survey that measures customer satisfaction. Performance measures parallel the strategic objectives and tell the organization how they are doing on each strategic objective. They also provide an indication of the validity of the cause-and-effect linkages.

4. Identify strategic initiatives. For each strategic objective, determine the initiatives that will cause progress towards the goal identified by the strategic objective. This is the action-planning step.

5. Write the implementation plan. The purpose of the implementation plan is to ensure that the developed Balanced Scorecard is fully implemented and used by the organization. It contains three sections. First, the communication plan identifies how the Balanced Scorecard will be communicated to the organization to maximize alignment to the guiding ideas and strategy. Second, the management plan identifies how the Balanced Scorecard will be used for managing the organization on an ongoing basis. Third, the information systems plan identifies changes to IM/IT (Information Management / Information Technology) systems for gathering the data for the performance measures.

The newly developed Balanced Scorecard becomes part of the management system. It is regularly used to ensure that the organization is managed strategically. The performance measures show whether the organization is making progress on the strategic objectives. The performance measures show whether the assumptions behind the linkages in the strategy map are valid. Management clearly sees where adjustments need to be made to reach their goals. Not only does the Balanced Scorecard become part of the management system, it is communicated to the entire organization so that everyone can see whether or not they are in alignment with the organizational goals. Through these practices, the strategy is brought to life for the organization.

A Balanced Scorecard is always a work in progress. The linkages and assumptions that comprise the strategy map are always being tested and revised. The Balanced Scorecard might undergo more major changes annually.

All of the performance measures can be combined into a single number that gives an indication of how the organization is doing overall. The performance measures would be normalized, weighted and rolled up into a single measure.

A more participative approach for developing the Balanced Scorecard ensures greater buy-in. Well planned communication of the Balanced Scorecard ensures that everyone involved is working towards the organizational strategy.

A good Balanced Scorecard reflects the whole system. It ensures that the big picture is kept in mind and connects the big picture to the details. It translates strategy into action.

Appreciative Inquiry

Appreciative Inquiry is a positive approach for organizational change. It uses unconditional positive questions to discover the best in an organization. It is a highly participative process, often involving the whole organization. Although Appreciative Inquiry can be viewed as an emerging paradigm, it is largely attributed to David Cooperrider, who in the 1980s, discovered and began to use the power of positive questions for organizational transformation.

Many organizational change initiatives attempt to find the problems in an organization and then fix them. This puts the focus and energy on the problems. It causes the wall of resistance to be encountered. Employees do not easily go along with the proposed changes. The Appreciative Inquiry approach, by putting the focus and energy on what works, does not encounter the wall of resistance to the same degree. Most importantly, the organization is energized by this approach.

The key principles underpinning Appreciative Inquiry are:

1. The Constructionist Principle – Words create worlds. Reality is socially created through language and conversation. Meaning is made in conversation, reality is created in communication, and knowledge is generated through social interaction.

2. The Anticipatory Principle – Human systems move in the direction of their images of the future. Our collective imagination and our discourses bring the future into the present.

3. The Positive Principle – The more positive the questions we ask, the more positive and long-lasting the change. Momentum is generated through positive questions that amplify the positive core.

4. The Simultaneity Principle – Inquiry and change are not separate; they are simultaneous. The moment we ask a question, we begin to create change.

5. The Wholeness Principle – Wholeness brings out the best in people and organizations. It leads people to focus on higher ground rather than common ground.

Most interesting, the Appreciative Inquiry process uses interviews among people in the organization to discover the life-giving factors in an organizational system. The wording of the interviews is positive and generates excitement. Their interviews result in stories that connect the future to the past. Appreciative Inquiry uses images of a desired future. Provocative proposition statements are developed, similar to a mission statements but written in such a way that it speaks to the deepest desires of the participants. With the stories, images, and provocative proposition, employees move more easily to the desired future.

Appreciative Inquiry is profoundly factual. It is an empirical process grounded in experience. The data is gathered from the brains of the employees. It makes tacit knowledge explicit.

The transformation starts when you ask the first question. Ask the right questions and the change can be powerful. According to Jane Magruder Watkins and Bernard J. Mohr, in Appreciative Inquiry – Change at the Speed of Imagination, “Appreciative Inquiry recognizes that human systems are constructions of the imagination and are therefore capable of change at the speed of imagination.”

Further, by sharing stories, people become more connected. They become more of a community. Community allows people to be authentic, to communicate from the depths of who they are. They listen intently to the other. They see their connectedness both through sameness and differences. They see that they are all part of a bigger picture. They are part of a whole.

A community with shared meaning and purpose is more effective. When people share language, they share meaning. When they have a shared purpose, they have a clearly shared intention. People are energized when they have shared meaning and purpose. They are more creative.

It is important to understand that meaning and purpose exist within community. We determine meaning as a community – the determination of meaning is through its relationships. Kenneth Gergen, in An Invitation to Social Construction helps us understand that meaning is in the relationships when he says “Our modes of description, explanation and/or representation are derived from relationship.”

This potential impact of community with purpose is highlighted by Margaret Wheatley in her book turning to one another – simple conversations to restore hope to the future where she says “There is no power for change greater than a community discovering what it cares about.”

Appreciative Inquiry also stimulates creativity. The positive approach is fun and engages the brain. Appreciative Inquiry engages both the left and right halves of the brain. For example, creating the image of the future is a right-brained activity. Creativity requires both the left and right halves of the brain to be functional and in communication.

Through a recognition of the power of language, positive questions, the desire for wholeness and by holding a clear image of the future, the best traits of a community or organization are brought forward. Most importantly, they energize the people and the organizational system.

We are now ready to put these concepts together and explore how Balanced Scorecard and Appreciative Inquiry can be used in the service of Gross National Happiness.

Putting It All Together in the Service of Gross National Happiness

The exciting challenge would be to involve as many citizens as possible beginning with Appreciative Inquiry interviews to discover the strategic objectives and related cause-and-effect linkages. I would recommend that the four platforms already identified for Gross National Happiness: economic development, environmental preservation, cultural promotion, and good governance could best form the perspectives from which a Strategy Map would be created. Using these four perspectives, I have created a simplified strategy map for Gross National Happiness as follows:

Figure 2  Gross National Happiness Strategy Map



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The steps for the creation of the Gross National Happiness Scorecard combining both Balanced Scorecard and Appreciative Inquiry would include, among other elements:

· Creation of images of the desired future

· Development of provocative propositions of the desired future

· Creation of the strategy map

· Identification of performance measures which should be positive measures

· Identification of strategic initiatives

The data for the performance measure relating to the strategic objective of “Happy Citizens” could be collected with as much participation as possible, through surveys, town hall meetings, Search Conferences or Appreciative Inquiry workshops.

The Gross National Happiness measure would be created by combining all of the performance measures into a single measure. This could be done by normalizing (converting measures to a common unit), weighting (prioritizing the measures) and rolling them up. We would then have a single measure, like the GNP, for GNH!

Finally, it is important to make the Gross National Happiness a living strategy.  This will take ongoing dialogue that will mobilize and engage citizens to make happiness a reality.  The participative approach will help make this happen.  It will help people to think and to better understand the goals of Gross National Happiness; it will build on the experiences of the citizens through narrative; it will help ground the process in reality; and it will fully deploy the knowledge that already exists.

Conclusion

We need to rise to a new level of being. The world has found itself in a situation where a more holistic view must be taken into consideration and where possibilities for a future capable of adapting to ever more complex issues is looked at from a positive and appreciative vantage point. By combining  Balanced Scorecard and Appreciative Inquiry we will do just that. By taking this approach, the spirit of Gross National Happiness is exemplified. What’s more, it is fun and the process itself spurs on happiness.

Bibliography

Cooperrider, D.L. & Srivastva, S. (1987). Appreciative inquiry in organizational life. In R. Woodman & W. Pasmore (eds.), Research in Organizational change and Development: volume 1. (129-169). Greenwich, CT: JAI Press.

Cooperrider, D.L. & Srivastva, S. (1990). Appreciative Management and Leadership : The Power of Positive Thought and Action in Organizations. Jossey-Bass Inc Pub.

Emery, M. & Purser, R. E. (1996). The Search Conference : A Powerful Method for Planning Organizational Change and Community Action. San Francisco: Jossey Bass.

Gergen, K.J. (1999). An Invitation to Social Construction. Sage Publications.

Kaplan, R.S. & Norton, D.P. (1996). The Balanced Scorecard : Translating Strategy into Action. Harvard Business School Press.

Kaplan, R.S. & Norton, D.P. (2001). The Strategy-Focused Organization : How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School Press.

Mohr, B.J. & Watkins, J.M. (2001). Appreciative Inquiry : Change at the Speed of Imagination. The Practicing Organization Development Series. Jossey-Bass Pfeiffer.

Wheatley, M. J. (2002). turning to one another: simple conversations to restore hope to the future. Berrett-Koehler.

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