As companies around the world transform themselves for competition that is based on information, their ability to exploit intellectual assets is gaining importance. In recognition of this change a new concept called "Balanced Scorecard"
has been introduced.
What is a Balanced Scorecard?
A Balanced Scorecard is a strategic framework that helps you view your organization from four distinct perspectives:
Financial (make a profit)
Customer (satisfy needs)
Internal Processes (delivering value)
Learning & Growth (having the necessary people, tools and information)
When performance measures for these areas are added to financial metrics, the result is not only a broader perspective on the company's health and activities, it's also a powerful organizing framework. A sophisticated
instrument for coordinating and fine-tuning a company's operations and business so that all the activities are aligned with it's strategy.
Balanced Scorecard in practice
The Balanced Scorecard is more than a tactical or an operational measurement system. Innovative companies are using scorecards as a strategic management system, to manage their strategy over long periods. They are
using the measurement focus of the scorecard to accomplish critical management processes.
Clarify and translate vision and strategy:
The scorecard process starts with a senior executive management team working together to translate its business unit's strategy into specific strategic objectives. To set financial goals, the team must consider
whether to emphasize revenue and market growth, profitability or cash flow generation.
Communicate and link strategic objective and measures:
When a scorecard is disseminated up and down the organization chart, strategy becomes a tool available to everyone. Individual employees understand how their own productivity supports the overall strategy.
Plan, set targets and align strategic initiatives:
The discipline of creating a Balanced Scorecard forces companies to integrate the two functions, thereby ensuring that financial budgets support strategic goals.
Enhance strategic feedback and learning:
Feedback about products and services, new learnings about key internal processes, technological discoveries, etc. can be fed into the Balanced Scorecard, enabling strategic refinements to be made continually.
Thus, at any point managers can know whether the strategy is working and if not why.
Outcomes you can expect
The balanced scorecard fills the void that exists in most management frameworks the lack of systematic process and obtaining feedback. It enables organizations to become aligned and focused on their long term strategy.
You can select the consulting approach offered by CRMNEXT because it greatly affects the organization's performance through vision, strategy and operations alignment.