Balanced Scorecard

The Balanced Scorecard can be used to create and manage strategy. The Balanced Scorecard also creates focus and develops teamworking and Leadership Connections uses the Balanced Scorecard to make a difference to your organisation

Our Approaches

The Balanced Scorecard

The Balanced Scorecard is tool for measuring and managing strategy in both public and private sector organisations.

Used properly, however, it is also a powerful tool for clarifying strategy and aligning leadership teams and the organisation around the things that really matter for delivering success. Click here to read more.

We can help you create your scorecard in a way that engages and mobilises the organisation towards achieving your strategy. Contact us.

Our Approaches

Click on the headings below to see more on some of the approaches that we use.

16PF and MBTI

Action Learning

Appreciative Inquiry

Balanced Scorecard

Emotional Intelligence

Open Space

Participative design

Search conferences

Supporting leaders to overcome their obstacles and develop themselves - through coaching and mentoring

Increasing the effectiveness of management teams through leadership team development

Identifying and improving leadership across the organisation through talent management and leadership development

Mobilising large groups for change through creating inspiring conferences and motivational speaking

Increasing the effectiveness of the Human Resources function through HR strategy and skills development

 

The Balanced Scorecard

The balanced scorecard is a strategic planning and management system that is used in a wide variety of applications in the public, private and not for profit sectors. It's authors, Kaplan and Norton advocate it's use for aligning business activities and initiatives to the vision and strategy of the organisation, improve communication, and monitor performance against strategic goals.

It was originally propsed as a performance measurement framework that added three categories of non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of performance. 

Since their original; work, Kaplan and Norton have developed the concept from a performance measurement approach to a full strategic planning and management system. In particular they emphasise the importance of not only providing performance measurement, but also of identifying what should be done and measured. It enables executives to truly execute their strategies.

The balanced scorecard approach provides a clear understanding of what companies should measure in order to 'balance' the financial perspective.

Kaplan and Norton describe the innovation of the balanced scorecard as follows:

"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."

Adapted from The Balanced Scorecard, Kaplan & Norton

The balanced scorecard divides the important factors of an organisation into four perspectives, and requires it to develop measures, collect data and analyse in each one:

The Learning & Growth Perspective

This includes all factors related to people, knowledge and learning. The argument for it's inclusion is that in a knowledge-worker organisation, people -- as the only repository of knowledge -- are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be  continuously learning. Metrics can be put into place to guide managers in focusing their leadership efforts on recruiting, developing, retaining and motivating people as well as getting them to work effectively together.

Arguably, it is the focus on this perspective that distinguishes the balanced scorecard from many other competing models of strategic management and measurement.

The Business Process Perspective

This perspective refers to internal business processes - the critical things that the organisation must excel at to succeed. Process metrics allow managers to know how well their business is running, and how well they translate into meeting customer requirements. They have to be carefully designed by those who know these processes most intimately, and are usually measured in terms of cost, quality and/or time.

Two kinds of business processes are commonly be identified: a) mission-oriented processes, and b) support processes. Mission-oriented processes typically focus on external results and support processes are usually primarily inwardly focussed. The support processes are more repetitive in nature, and can be easier to measure and benchmark using generic metrics.

The Customer Perspective

There has been much written in management research recently on of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Equally, if they are satisfied then their loyalty will increase and they may be prepared to buy more or pay more. Performance from this perspective is thus a leading indicator of future success or failure, even though the current financial picture may look good.

In developing metrics for satisfaction, customers are often analysed in terms of types of customers and the kinds of processes for which the organisation is providing a product or service.

The Financial Perspective

Kaplan and Norton do not suggest that the balanced scorecard should place less value on the traditional  financial data. Timely and accurate financial information will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough financial data. They do, however, argue that the information should be used with more discrimination and that more of the processing should be centralized and automated. Their central point is that the current emphasis on financials leads to an "unbalanced" set of metrics and consequent analysis, understanding and management of the organisation and it's performance.

Sometimes it may be appropriate to include additional financial-related data, such as risk assessment and cost-benefit data, in this perspective.

You can use our leadership diagnostic to assess for yourself how you, your managers and your organisation are faring in each of these areas.

Let's Talk

The easiest way to understand how we can help, and whether you feel that you could work with us, is to begin with a conversation.

We don't believe in a "hard sell" and often find that people get value out of the exploratory discussion - whether or not we go on to work together.

Please Contact Us – we would love to hear from you.

 

Balanced Scorecard

The Balanced Scorecard can be used to create and manage strategy. The Balanced Scorecard also creates focus and develops teamworking and Leadership Connections uses the Balanced Scorecard to make a difference to your organisation