Balanced Balanced ScorecardScorecard

Balanced Scorecard: what is it ? .. (1)

At the highest level, the Balanced Scorecard (BSC) is a framework that helps organizations to translate strategy translate strategy into operational objectivesinto operational objectives that drive both behavior and performance.

Drs. Robert Kaplan (Harvard Business School) has subsequently published another book on the subject, called The Balanced Scorecard: You Can't Drive a Car Solely Relying on a Rearview Mirror.

Note that the Balanced Scorecard is a management management systemsystem — not a measurement system. Measurement is a key aspect of the Balanced Scorecard, but it is much more than just measurement; it is a means to setting and achieving the strategic goals and objectives for your organization.

Balanced Scorecard: what is it ? .. (2)

STRATEGY

HUMAN RESOURCES

BUSINESS UNITS EXECUTIVE TEAM

INFORMATIONTECHNOLOGY

BUDGETS AND CAPITAL INVESTMENTS

The Balanced Scorecard process allows an organization to align and focus all its resources on its strategy

Question:How can complex organizations achieve results like this in such short periods of time?

Question:How can complex organizations achieve results like this in such short periods of time?

Answer:

Alignment!

Answer:

Alignment!

Balanced Scorecard: the ingredients of highly successful

1. Leadership From the Top Create the Climate for

Change Create a Common Focus for

Change Activities Rationalize and Align the

Organization

3. Unlock and Focus Hidden Assets

Reengineer Work Processes Create Knowledge Sharing

Networks

2. Make Strategy Everyone’s Job Comprehensive

Communication to Create Awareness

Align Goals and Incentives Integrate Budgeting with

Strategic Planning Align Resources and

Initiatives

4. Make Strategy a Continuous Process

Strategic Feedback That Encourages Learning

Executive Teams Manage Strategic Themes

Testing Hypotheses, Adapting, and Learning

STRATEGY

FormulateFormulate

NavigateNavigateCommunicateCommunicate

ExecuteExecute

Balanced Scorecard: what is the focus ?They typically focus your company strategy around the following

areas: Financial PerspectiveFinancial Perspective – How do you look against the financial

objectives of the company’s owners Customer PerspectiveCustomer Perspective – How do you look to your current and

prospective customers? Internal Business PerspectiveInternal Business Perspective – What must you excel run

an effective business? Learning PerspectiveLearning Perspective – What must you organization learn to

improve your business?

You not only have to measure these critical four focus, but also set strategies, goals, objectives, and tactics to make them happen. And while you're at it, you have to make sure that your strategies and tactics are congruent. They have to work together and create a single thread, tying together in ways that make sense. This isn't an optional exercise; it's essential. The future of your business depends on it.

Balanced Scorecard: the positioning of a perspective framework

Balanced Scorecard: the positioning of a perspective framework .. (illustration)

Balanced Scorecard as a Centerpiece of Strategy

Strategic Maps and Balanced Scorecards: issues & metrics

Strategic maps help communicate your corporate strategy. And, balanced scorecards are a way to measure your strategic progress.

Strategic Maps and Balanced Scorecards: illustration – corp.

Sample: Value Budget

Sample: Value Creating Processes

Sample: Value Time Line

Case Study – corp.

Case Study – personal

Some of the Indicators of Good Balanced Scorecard

4. Financial LinkageEvery objective can ultimately be related to financial results

1. Executive InvolvementStrategic decision makers must validate and own the strategy and related measures

2. Cause-and-Effect RelationshipsEvery objective selected should be part of a chain of cause and effect linkages that represent the strategy

3. Balance between outcome and leading measures There should be a balance of outcome measures and leading measures to facilitate anticipatory management

5. Linkage of Initiatives and Measures: Each initiative should be based on a gap between baseline and target.

A good Balanced Scorecard will

“tell the story” of your strategy in

actionable terms.

Management Cockpit

A Dashboard—Management Information System for effective making decision

Information will be updated regularly and presented in the clarity, summary, and predetermined and sequenced basis

Management Cockpit