The Balanced Scorecard TG performance but Kaplan and doctor David Norton who
introduced the methodology in 1992 to an article published by the Harvard
Business Review examine the most successful businesses across the world and found similarities in the way they
were from each of the top performing businesses had a very clear vision and strategy
that was managed to cross the key areas a finance customer internal processes and knowledge in both Kaplan and Norton
formalize this structure as the balanced scorecard creating
perspectives based on these key areas thus providing the balance between
financial and non-financial measures the financial perspective looks at top
level financial objectives and measures to answer the question how do we look to
our shareholders the customer perspective focuses on
customer satisfaction answering the question how to our
customers say yes the internal processes perspective determines how well the business is
running and whether we provide what our customers actually want in other words what should
we be best at learning in growth perspective looks at
people their skills training leadership and
knowledge answering the question how can we
improve and create value the perspectives map out the company
vision and strategy this in turn can lead to the creation of
a formal strategy map that is the company
strategy stated in simple terms in an easy to
understand form based on the full balance scorecard
perspectives within each perspective comes the
identification of a small number of strategic objectives setting targets for the objectives and
then measuring against the targets on a regular basis to determine success or failure
measurement is undertaken through performance measures a performance measure should be one of a
small number measures designed to be understood easily and
acted upon quickly much in the same way as a doctor or
nurse will monitor pulse rate and temperature
to determine the overall health pasan with performance measures we are
attempting to do the same for an organization performance measures must contain both
leading and trailing measures all too often we
concentrate on trailing measures why because they’re easy to measure and
their accurate if I want to lose weight I get on the
scales this kiss me proof positive if I have
succeeded or not it is not give me any help to succeed if
I plan to go for a series of runs and decide how much I’m going to eat and
I have put in place to leading measures they will help me
succeed leading measures are harder to identify but they are the only measures that can
be influenced and therefore make a difference it is better to focus on a small number
of things they will influence change rather than
so many that nothing gets achieved until it has been said if your strategy has
three objectives you’ll succeed in all three if he has
four to 10 objectives you’ll succeed in 122 if it contains
more than 10 objectives you’ll succeed in un a simple case at
the law of diminishing returns the balanced scorecard has become an
extremely powerful to to ensure alignment the strategy maps
improve communication for a common language and ultimately lead to a better
performing organization that is in tune with its business
strategy
↧
What to Balanced Scorecard ?
↧