Balance Scorecard: approach is to focus
on strategy and is balanced with financial, customer, process, and growth and
learning perspectives
Balanced Scorecard Strategy Maps: used
with Balanced Scorecard to visually show connections between goals and strategy
the balanced scorecard: some people like
to put "the" before everything
Key Performance Indicators: part of
balanced scorecard but can be used without balanced scorecard
Performance Scorecard: might not be
balanced and might not focus on strategy but just performance
Business Dashboard or Scorecard Dashboard:
might not be balanced and might not focus on strategy just performance
Balanced Performance Scorecard: focuses
on strategy; is balanced with financial, customer, process, and growth and
learning perspectives
Business Scorecards: might not be
balanced and might not focus on strategy
Strategy Scorecards: might not be
balanced
Performance Dashboards: might not be
balanced nor focus on strategy but just performance
Management Dashboard: might not be
balanced and might not focus on strategy just performance
Balanced Scorecards for Divisions, Locations,
Departments: individual balanced scorecard for divisions, locations,
departments rather than balanced scorecards for organization as a whole
Executive Dashboards & Executive Scorecards:
might not be balanced and might not focus on strategy just performance
Balanced Scorecard Management: includes
balanced scorecard creation, updating, reporting and management.
Business Metrics: business metrics may
not be focused on strategy and may not be balanced
Balanced Scorecard Strategy: the purpose
of the balance scorecard is not to create a strategy although once the strategy
is created the balanced scorecard helps to determine if the strategy is being
executed and needs to be revised. Some organizations which create a strategy
focused organization could say that strategy falls under a Balanced Scorecard
Strategic Management system.
bsc: abbreviation for Balanced Scorecard
Balanced Scored in services, manufacturing,
government, and non-profit: Balanced Scorecard is used in all types
of organizations throughout the world
Strategy Focused Organizations: a
strategy focused organization uses the balanced scorecard to align all its
employees so they understand how what they are doing contributes to strategy and
know the key performance indicators they must achieve in order for organization
to achieve its strategic goals
Kaplan Norton Balanced Scorecards:
Robert Kaplan and David Norton are viewed as originators of Balanced Scorecard
kpi scorecards: kpi is abbreviation for
Key Performance Indicators which are incorporated into a Balanced Scorecard.
Organizations can use a scorecard which is not balanced and which does not focus
on strategy and still use kpi (key performance indicators)
strategic scorecards: a strategic
scorecard focuses on strategy but it may not be balanced
metrics scorecards and metrics dashboards:
all metrics scorecards and metrics dashboards have some types of performance
measures, but not all metric scorecards and metrics dashboards are balanced and
not all are focused on strategy
Balanced Scorecard Measurement: all
balanced scorecards incorporate some type of measurement that is related to
strategy. Finding the correct kpi (key performance indicators) is often one of
the toughest parts of creating a balanced scorecard
Strategic Balanced Scorecards: the basic
concept of a Balanced Scorecard is to focus on strategy and to balanced
perspectives to include finance, customer, process, plus growth and learning.
the balanced scorecard translating strategy into
action: the main purpose of the balanced
scorecard approach is to translate a strategy (which is often not
understood or known by most employees) into tangible action related to key
performance indicators (kpis)
Balanced Scorecards & Operational Dashboards:
some would say that the Balanced Scorecard is an executive management tool
and Operational Dashboard used by various departments are used to support
Organizational level Balanced Scorecard
Organizational Alignment: one of main
purposes of Balanced Scorecard method or approach is to get everyone aligned.
This means making decisions that support the organization strategy to achieve
its goals
Balanced Scorecards Performance Measurement:
Using theBalanced Scorecard incorporates performance measurement in order to see if
the organization is achieving its strategy and thus its goals. Not all
Performance Measurement systems use a strategy focus like the Balanced Scorecard
does.
Financial Scorecards: financial
scorecard is only 1 of 4 Balanced Scorecard perspectives. Other 3 perspectives
are customer, processes, plus growth and learning. All to often organizations
focus on financial scorecard and ignore these other these perspectives.
Balanced Scorecard System: a balanced
scorecard system incorporates a variety of tools and techniques which may
include: Office of Strategic Management 4 perspectives: financial,
customer, process, growth and learning
leading and lagging indicators strategy maps feedback loop
department scorecards
Balanced Scorecard Performance Management:
performance management can be achieved using a number of different
methodologies including: Balanced Scorecard, Quality, Lean Thinking, Performance
Measures, Dashboards, Scorecards, Key Performance Indicators. Most other
techniques are not as encompassing as the balanced scorecard is.
Balanced Scorecard Perspectives: refers
to four viewpoints of monitoring and executing strategy and includes financial,
customer, processes, plus growth and learning.
Balanced Scorecard Key Performance Indicators:
Balanced Scorecard uses 4 perspectives (financial, customer, processes,
growth and learning). For each indicator, an organization would create key
performance indicators to support those 4 perspectives.
Balanced Scorecard Public Sector or Government:
balanced scorecard for government or public sector entities like federal, state,
county and local governments, balanced scorecard often starts with customer or
mission perspective. It then asks what processes, what growth and learning, and
finally what financial resources are needed to achieve goals and strategy.
Balanced Scorecard Report and Review:
purpose of balanced scorecard report or review is to show how organization is
performing against its key performance indicators (kpis). If organization is
performing well against its key performance indicators then it should be
achieving its strategy and thus its goals. If it is performing well against its
kpis and it is not achieving its goals then its strategy may be faulty. Human
resources and information technology balanced scorecards should support
organizational balanced scorecards.
Balanced Scorecard nonprofit organizations:
balanced scorecard for non profits like hospitals, balanced scorecard often
starts with mission perspective. It then asks what processes, what growth and
learning, and finally what financial resources are needed.
Corporate Balanced Scorecard: it most
corporations it is best to start with a corporate level balanced scorecard and
then create division, location, department, and cost center balanced scorecard.
Evaluation Scorecards: Balanced
Scorecards are used to evaluate how an organization is doing in achieving its
strategy. Although all scorecards can be used for evaluation, not all
scorecards focus on strategy and are balanced.
Balanced Scorecard Process: implementing
the Balanced Scorecard is a long term process. For large organizations it can
take 3-5 years to create and modify and introduce throughout all levels of the
organization plus tie compensation to key performance indicators or metrics. The
first pass of a corporate balanced scorecard can take 3-4 months depending how
dedicated executives are to this process.
Service Balanced Scorecard: service
balanced scorecards for service organizations work similar to any other type of
balanced scorecards. Balanced Scorecards for service functions like customer
service, accounting, technology, hr, IT, call center, marketing, sales, and
supply chain start with organization balanced scorecard. They create a
functional or service balanced scorecard that supports the organizational
scorecard.
Personal Balanced Scorecard: a Personal
Balanced Scorecard or an employee balanced scorecard is one of final steps in
creating a balanced scorecard. The organization starts with an executive
balanced scorecard for entire organizations. It then creates division, location,
functional/service/department balanced scorecards that support the
organizational scorecard. Project Balanced Scorecards are created where
appropriate. Finally individuals creates a personal balanced scorecard that
relates to their functional balanced scorecard as well as organizational
balanced scorecard.
Customer Satisfaction Balanced Scorecard:
customer satisfaction balanced scorecard is especially useful for your major
customers. For customer balanced scorecard focus on goals to be achieve
for particular customer or industry. It should relate to corporate balanced
scorecard.
Six Sigma Balanced Scorecard Six Sigma
can be used with a Balanced Scorecard. Some organizations like Malcolm Baldrige
winners might use Six Sigma as their overriding Performance Management system.
For most organizations Balanced Scorecard is overriding Performance Management
system which uses Six Sigma (quality) to create Key Performance Indicators
(kpis) which support strategy.
Benefits of Balanced Scorecard: major
benefits of balanced scorecard concept include aligning everyone, kpis related
to strategy, strategy related to goals, 4 perspectives, leading and lagging
indicators, etc.
Balanced Scorecard Tools: Balanced
Scorecard toolkit include leading and lagging indicators, 4 perspectives,
strategy maps, etc.
Cascading Balanced Scorecards: cascading
balanced scorecards start with an organizational scorecard, then create
division, location, department, and project scorecards that support the
organizational scorecard.
Balanced Scorecard Customer Perspective:
Customer Perspective is one of 4 Balanced Scorecard perspectives. Customer
perspective asks the question: What do I need to accomplish to satisfy my
customers in order to reach my financial goals. In nonprofit and government
organizations, this is often the starting perspective rather than financial
perspective. This perspective in nonprofit balanced scorecards and publish
sector balanced scorecards often starts with mission of nonprofit or public
sector entity.
Balanced Scorecard Learning and Growth Perspective:
4th Balanced Scorecard Perspective is Learning and Growth. Learning and Growth
asks: " What do employees need to learn in order to perform their processes to
satisfy their customers and reach our financial goals?" Learning and Growth also
asks: "What systems, technology, computer software do we need to better perform
our processes and satisfy our customers and reach our financial goals?"
Balanced Scorecard Problems: Balanced
Scorecard has problems just like any other technique. These problems are not all
directed related to Balanced Scorecard itself. Some organizations don't have a
strategy, they only have goals. Some organizations don't want to be held
accountable. Using correct KPIs is important. Relating Balanced Scorecard to
budgets and compensation are important. Balanced Scorecard is not a magic
bullet. Balanced Scorecard takes hard work.
Balanced Scorecard Theory: Balanced
Scorecard Theory starts with organizational goals and creates a strategy to
achieve those goals. Then it uses strategy maps and 4 perspectives for
financial, customer, process, growth and learning to create key performance
indicators to align employees to achieve strategy. It also uses leading and
lagging indicators to forecast problems rather than just after the fact
indicators.
Internal Audit Balanced Scorecard: Some
organizations use Internal Audit less for financial auditing and more for
process improvement. Utilizing Internal Audit to help ensure correct KPIs and
strategy maps are being used is a great way to improve results.
Balanced Scorecard Initiatives:
Organizations need to prioritize, fund, and coordinate their initiatives within
framework of Balanced Scorecard. Otherwise good intentioned employees will
on innovations and improvements that may not totally
support balanced scorecard objectives.
Balanced Scorecard Pros and Cons:
Balanced Scorecard approach pros include it is excellent way to achieve
alignment. It can start with organization goals, strategy and develop strategy
maps and kpis to support strategy. Balanced Scorecard method should be related
to operational and capital budgets and compensation. Balanced Scorecard Cons is
that it is not a silver bullet. Balanced Scorecard works only is senior
executives support and put time into creating, updating, and managing by
Balanced Scorecard.
Department Balanced Scorecard has same performance measurement categories
as BSC. They contain commonly shared performance measures from BSC, and any
additional performance measures needed to measure success of department.
Economic Value is financial goal. However, organizations need to
understand how customer, process, and growth/learning affect that financial
goal. Balance Scorecard integrates this one financial performance
measure with non-financial indicators that indicate where an organization is
achieving its strategy and long-term financial goals.