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Most organizations use performance measures to keep operations under control. While these are important in the day to day functioning of your business they may not correspond directly to strategy.
- If you don’t measure it, it doesn’t get done.
- If you measure the wrong things, the wrong things get done.
Organizations that use a balanced scorecard model of performance measurement excel over those that don’t on a number of different dimensions.
- Financial results
- Operational control
- Organizational change
- Agreement on strategy
- Communication of strategy
- Reviewing and improving strategy
Developed in early 1990’s and now used by nearly 50% of the Fortune 1000 companies, as well as many non-profit, health-care, and government organizations, the balanced scorecard converts an organization's vision and strategy into a comprehensive set of linked performance and action measures that provide the basis for successful strategic measurement and management.
- All the measures on a balanced scorecard serve as translators of the organization's strategy.
- Measurements include lagging indicators of successful strategy implementation.
- Significantly, measures also include leading indicators of factors that drive organizational performance in fulfillment of your strategic plan.
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| Design of organization-wide Balanced Scorecard dashboards |
- Creates dashboards showing clear, concise presentations of the status of your organization’s strategy.
- Enables board and senior management to monitor strategy implementation.
- Fulfills requirements for program evaluation and organizational accountability.
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Design and implementation of scorecards cascaded down through organizational departments and units |
- Binds departmental activity to organization-wide strategic concerns.
- Communicates strategy to those throughout the organization responsible for implementing it.
- Gives every functional unit and every employee an understanding of their distinct role in strategy implementation.
- Provides a basis for evaluating unit and individual performance.
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Plan and support for regular balanced scorecard review |
- Enables management to review strategic progress on a regular basis and adjust operations to further strategy.
- Shows management what works and doesn’t work and how to improve strategy.
- Makes strategy a continuous rather than one-time activity.
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