Define Balanced
Scorecard
Let’s try to
Define Balanced Scorecard. Balanced Scorecard is a strategic
feedback system that enables program managers to make better
decisions faster, smarter, and easier then ever before. It
integrates, analyzes, and distributes information to support full
project performance management. The hardest part of a balanced
scorecard implementation is right at the outset, when the program
manager has to list which criteria support his goals. This list
might include: Program X Leadership (marketing, "IN" the business
issue identification and resolution), Customer Sponsorship ("ON" the
business issue identification and resolution), Financial Success
(project performance, project pipeline), People (skills, employee
satisfaction), and Customer Satisfaction (sufficiency reviews,
customer surveys, portfolio management, lean
engineering).
The initial
focus should be on measuring people and processes as indicated in
the list above. If the program manager is not achieving his
objectives in these areas, then he is storing up for trouble down
the road. The sooner he can recognize any shortfall, the sooner he
can plan his change - before it derails the
program.
Define Balanced
Scorecard benefits as per Kaplan and Norton:
- Focusing the
whole organization on the few key things needed to create
breakthrough performance.
- Helping to
integrate various corporate programs, such as quality,
re-engineering, and customer service initiatives.
- Breaking down
strategic measures to local levels so that unit managers,
operators, and employees can see what's required at their level to
roll into excellent performance overall.
Define Balance
Scorecard: The basic idea of the Balance Scorecard is to focus the
organization on metrics that matter as seen from a strategic point
of view. To avoid focusing only on short term financial measures the
scorecard comprises metrics from areas such as customer, internal
processes, and learning and growth perspectives respectively.
If you Define
Balanced Scorecard in other simple words, then the Balanced
Scorecard is a flexible tool, which can be used to describe, manage
and implement strategy through an organization by linking outcomes
and measures to strategic direction. Whilst at a lower level it
links directorate, process, team and individual objectives, outcomes
and measures. The
underlying principle is that to manage a company, process or team
effectively it is no longer appropriate to look only at financial
results. Moreover, the
Balanced Scorecard brings together financial, customer, internal
process and people into one performance monitoring system. It enables managers to
understand the linkages between these areas and helps them focus
their efforts. Rather
than having a plethora of monthly performance reports, the balanced
scorecard brings together the key indicators for management to run
their organization. In
addition, the balanced scorecard is a dynamic system where measures
are reviewed in light of changes to vision, strategy or mission of
an organization.
You can also
Define Balanced Scorecard as it takes the groundwork undertaken
during self-assessment and builds upon it. Many quality initiatives
tend to focus internally and looking at evolving by learning from
yourself. The scorecard
takes this on a level by asking what an organization wants in
relation to the external environment. Yet, it does not abandon the
quality drivers as it asks what process need to be improved, what
internal development and growth do we need and above all the model
strives for continuous improvement. Far from replacing quality
initiatives, balanced scorecard sits comfortably with
them.
