How do I develop a balanced scorecard?
Assess the effectiveness of performance measures
What is the Balanced Scorecard?
Traditionally, businesses have placed an over reliance on financial measures to determine success. Although important, these financial measures provide an incomplete view of business performance, clearly a more comprehensive view of corporate performance is needed to manage a modern business.
Financial measures simply don't give us enough information to make judgments about the long-term potential of a business and do not provide early indications of customer, employee, or quality problems or opportunities. There is a need for businesses to focus on a balanced approach to measurement.
In the early 1990's Drs. Robert Kaplan (Harvard Business School) and David Norton developed a new approach to strategic management and measurement – the Balanced Scorecard. The balanced scorecard approach provides a clear prescription as to what businesses should measure in order to 'balance' the financial perspective. The Balanced Scorecard method recognises that long-run financial success is driven by an organisation’s ability to continuously learn and grow and to manage the processes that deliver customer value.
The balanced scorecard measures performance from four perspectives:
- Internal business processes;
- Learning and growth;
How do I Develop a Balanced Scorecard?
The first step in the process is to develop your strategy by answering the following questions:
Customer - To achieve our vision, how should we appear to our customers?
Internal Business Processes - To satisfy our shareholders and customers, in what business process must we excel?
Learning and Growth - To achieve our vision, how will we sustain our ability to change and improve?
Financial - To succeed financially, how should we appear to our shareholders?
The second step is develop performance measures in each of the four areas that flow down the organisation, right down to the individual level so that all employees are evaluated and rewarded using action measures that are connected to the scorecard.
Jump Business Solutions will assist your organisation to define your strategy clearly, embed it into your Balanced Scorecard measures and communicate it across your organisation driving continuous process improvement, increasing customer satisfaction and financial prosperity.
Get in Touch with Jump
If you need help, or you answered no or unsure to any of the questions in the assessment tool, then Jump Business Solutions can help you. Phone us on +64 6 754 8987 or +64 27 450 5271 or email firstname.lastname@example.org and Jump will come to you, discover your needs, and develop a solution that will create real, long-term and positive change for you and your business.
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