Strategy Alignment
Balanced Scorecards
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)
Typical
Balanced Scorecard
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.
If you would like to learn more about how our Balanced Scorecard
strategy can help your organization, click
here.