Balanced Scorecard And not Amazon And Performance

As running a corporate-or government or not-for-profit-enterprise becomes increasingly complicated, more sophisticated approaches are needed to implement strategy and measure performance. Purely financial evaluations of performance, for example, no longer suffice in a world where intangible assets, relationships and capabilities increasingly determine the prospects for success. Let’s have a close look over Balanced Scorecard and not Amazon and Performance.

It is essential to identify what the organization must do well (i.e., the performance objectives) in order to attain the identified vision. For each objective that must be performed well, it is necessary to identify measures and set goals covering a reasonable period of time (e.g., three to five years). Sounds simple, however many variables impact how long this exercise will take. The first, and most significant, variable is how many people are employed in the organization and the extent to which they will be involved in setting the vision, mission, measures, and goals.

Balanced Scorecard and not Amazon and Performance:

·       Book: Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results by: Paul R. Niven

It is noteworthy that Robert S. Kaplan wrote the Foreword to this book. He and David P. Cohen are the co-authors of three other books on this important subject: The Balanced Scorecard: Translating Strategy into Action, The Balanced Scorecard: Measures That Drive Performance (HBR OnPoint Enhanced Edition), and most recently The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. In the Preface, Kaplan graciously welcomes "this new book to the Balanced Scorecard literature" and goes on to suggest that "Niven's contribution will enable many more organizations to achieve successful Balanced Scorecard implementations."

Given the potential benefits of such a program, one which provides a measurement system that balances the historical accuracy and integrity of financial numbers with today's drivers of economic success, It is strongly recommended that Kaplan and Norton's books also be consulted. The total cost seems a small price to pay for the substantial value that will be derived.

Here is how Niven organizes his material:

Part One: Introduction to Performance Measurement and the Balanced Scorecard

Its purpose is to "familiarize [the reader] with the field of performance measurement and provide a solid grounding of Scorecard background and principles."

Part Two: Step-by-Step Development of the Balanced Scorecard

Next, Niven provides his reader with "a detailed review and description of the elements necessary to construct this new and powerful management tool."

Part Three: Embedding the Balanced Scorecard in the Organization's Management System

Then Niven shifts his (and his reader's) attention to implementing -- literally step-by-step -- a cohesive, comprehensive, and cost-effective system based on the aforementioned principles (Part One) and elements (Part Two). This marks the "Scorecard's transition from a measurement system to a strategic management tool." Niven explains in Chapter 8 how to align every employee's actions with the organization's overall goals.

Part Four: Sustaining Balanced Scorecard Success

Niven carefully examines the importance of frequent reports on results (to date) which both broaden and (more importantly) deepen support of the Scorecard within the organization. To repeat, the Scorecard is an effective management tool as well as a source of measurement information.

Part Five: Balanced Scorecard in the Public and Not-for-Profit Sectors and Concluding Thoughts on Scorecard Success

The "many advantages conferred by the Balanced Scorecard" were recognized and appreciated almost immediately by public-sector and not-for-profit organizations. This "rising trend" serves as Niven's focal point in Chapter 13 and then, in the final chapter, he shares some concluding thoughts.

These specifics are provided so that those who read this review will have a clearer understanding of the scope of what Niven offers. No brief commentary such as this, however, can adequately suggest the depth of his probing analysis. He wrote the book for decision-makers in organizations which are now deciding whether or not to commit to a Balanced Scorecard program. Also for decision-makers in other organizations within which such a program is now underway. Niven concludes his Preface with Euripides' especially relevant comments on the importance of balance, first expressed almost 2,500 years ago: "The best and safest thing is to keep a balance in your life, acknowledge the great powers around us and in us.

·       E-book: The Balanced Scorecard: Measures That Drive Performance (HBR OnPoint Enhanced Edition)

This 1992 Harvard Business Review article, by Harvard Business School professor Robert Kaplan and David Norton, president of Nolan, Norton & Co., was the introduction into the now world-famous Balanced Scorecard - there is now even a Balanced Scorecard website. This article was followed by several other HBR-articles and two books ('The Balanced Scorecard' and 'The Strategy-Focused Organization').

The main reason for the introduction of the balanced scorecard was that, in the authors' views, organizations only measured financial performance. There was too much emphasis on financial measures and not enough on operational performance. By complementing financial measures of past performance with the objectives and measures of financial, customer, internal business process, and learning and growth, managers are provided with a framework to translate a strategy into operational terms. The great thing about the balanced scorecard is that it minimizes information overload by limiting the number of measures. It forces managers to focus on the handful of measures that are most critical.

This article made it finally possible for managers to express and measure operational performance. Great thing about the balanced scorecard is that it a simple visual tool. If you like this article, the logical step is to read their follow-up HBR-articles 'Putting the Scorecard to Work' (1993) and 'Using the Balanced Scorecard as a Strategic Management System' (1996) or their 1996-book 'The Balanced Scorecard: Turning Strategy into Action'. The article uses simple US-English.

The BSC translates an organization’s vision into a set of performance objectives distributed among four perspectives: Financial, Customer, Internal Business Processes, and Learning and Growth. Some objectives are maintained to measure an organization’s progress toward achieving its vision. Other objectives are maintained to measure the long term drivers of success. Through the use of the BSC, an organization monitors both its current performance (financial, customer satisfaction, and business process results) and its efforts to improve processes, motivate and educate employees, and enhance information systems - its ability to learn and improve.

When creating performance measures, it is important to ensure that they link directly to the strategic vision of the organization. The measures must focus on the outcomes necessary to achieve the organizational vision and the objectives of the strategic plan. When drafting measures and setting goals, ask whether or not achievement of the identified goals will help achieve the organizational vision.

Leading organizations agree on the need for a structured methodology for using performance measurement information to help set agreed-upon performance goals, allocate and prioritize resources, confirm or change current policy or program directions to meet those goals, and report on the success in meeting those goals.

The balanced scorecard is a conceptual framework for translating an organization’s strategic objectives into a set of performance indicators distributed among four perspectives: Financial, Customer, Internal Business Processes, and Learning and Growth. Some indicators are maintained to measure an organization’s progress toward achieving its vision; other indicators are maintained to measure the long term drivers of success. Through the balanced scorecard, an organization monitors both its current performance (finance, customer satisfaction, and business process results) and its efforts to improve processes, motivate and educate employees, and enhance information systems—its ability to learn and improve.