Research
Balanced Scorecard
According to
recent Research Balanced Scorecard, Balanced Scorecard is a great
business tool. Unbalanced scorecards are dangerous. The concept of
measuring all elements which are important to your business so that
you can manage them properly is not rocket science. In light of that
fact, the number of companies which fail to measure some or (often)
most of those elements is astounding. Many organizations talk a good
game on what is, arguably one of the most high utility business
models to emerge in recent years. However, it is often the talk of
the business equivalent of armchair
sportsmen.
Recent Research
Balanced Scorecard has indicated that the degree of strategic
planning in organization is likely to have a direct impact on
business performance and business evaluation. However, these
findings leave small and medium-sized business (SMEs) in particular,
with the challenge of matching the requirement for an improved
strategic planning process with the competitive advantage associated
with being a “simple” and highly responsive organization.
Research
Balanced Scorecard has all about two basics. The first is having
sound metrics on each part of the scorecard. For example, on the
employee opinion survey, don't just have employee satisfaction
(which can be very passive), but include more proactive measures
such as motivation, organizational commitment and product/service
advocacy. Also, don't try to measure too much on any one part of the
scorecard. For instance, again with your employee opinions measures,
an early baseline survey should be used to identify the key drivers
of outcomes such as advocacy. The tracking part of the scorecard
(what you measure month-on-month or year-on-year), should focus
solely on these drivers (i.e.: on what is likely to shift your
business in the right direction).
The second
important element in good balanced scorecard measurement from the
point of view of Research Balanced Scorecard is making vital
linkages between the data gathered. As the Sears model initially
showed, and many unpublished studies have found since, linking the
individual measures on the balanced scorecard together can provide a
hugely powerful, diagnostic perspective on the performance of a
business.
According to
Kaplan and Norton, the implementation and rollout of a scorecard can
communicate and clarify to employee’s key strategic objectives and
their critical drivers. This claim is important because research
shows that effective communication of strategy can have an impact on
the success of strategy implementation. Evidence regarding the
purported strategy clarification and communication benefits of the
scorecard is mixed.
A recent
Institute of Management Accountants survey
on performance management indicates that the scorecard can be an
effective strategy communication and clarification tool. Compared to
non-scorecard users, survey respondents from companies using a
scorecard rated their performance measurement system considerably
higher as a means of communicating strategy. Consistent with the IMA
data, a case study of a Fortune 500 company reports that the
scorecard was an effective means of communicating its strategy.
Well, for
Research Balanced Scorecard contradictory evidence is reported in a
case study of a financial services organization where adoption of
the scorecard had a negligible impact on branch managers’
understanding of strategic objectives and goals. But most of the
Research Balanced Scorecard has shown tremendous effects on the
overall improvement of the organizations. And series and
communication plan to ensure that all key executives, managers and
front-line employees fully understand the critical steps involved
with the implementation of a new strategy execution management
system.
