The Balanced Scorecard is an excellent management tool that grants managers a holistic and balanced strategy, as well as a way to track performance over time to assess whether business objectives are being Met.
About this we will talk in this article.
Continue Reading to understand what the Balanced Scorecard is and how it can be quite useful in structuring and executing Strategic Planning !
The origin of the Balanced Scorecard
The Balanced Scorecard (BSC) was originally developed by Dr. Robert Kaplan of Harvard University and Dr. David Norton as a framework for measuring organizational performance using a set of more balanced performance measures/ Balanced.
Traditionally, companies have only used short-term financial performance as a measure of success. The Balanced Scorecard added additional non-financial strategic measures to the mix in order to better concentrate on long-term success.
The methodology has evolved over the years and is now considered a fully integrated strategic management system.
Balanced Scorecard benefits in strategic planning
In general, when using the Balanced Scorecard (BSC) in the Strategic Planning (from a department, project or company as a whole), managers obtain the following advantages:
- Facilities to communicate what they are doing (for the team, for customers etc.);
- Alignment of the day-to-day work of the strategy;
- Culture of prioritization of projects, products and services;
- Measurement and monitoring of the progress of strategic goals.
The BSC connects the points between the main elements of strategy, such as mission (our purpose), vision (what we aspire to), fundamental values (in which we believe), areas of strategic focus (themes, results and/or goals) and more operational elements such as objectives (continuous improvement activities), measures (or Key performance indicators, or KPIs, which accompany the strategic performance), goals (our desired level of performance) and initiatives (projects that help you achieve your goals).
4 perspectives that the Balanced Scorecard clarifies to managers
The BSC suggests that managers see the organization from four perspectives and develop objectives, measures (KPIs), goals and initiatives (actions) in relation to each of these points of view:
- Financial: This perspective sees organizational financial performance and the use of financial resources in planning;
- Customer/Stakeholder: This perspective displays organizational performance from the customer’s point of view or from other stakeholders for which the organization is designed to serve;
- Internal Process: visualize organizational performance through quality and efficiency lenses related to products, services or other important business processes;
- Organizational Capacity: visualize organizational performance through human capital lenses, infrastructure, technology, culture and other capabilities that are key to revolutionary performance.
How about, do you already use the Balanced Scorecard in your strategic planning? Leave your comment!