Co-authored by Harvard Graduate School professor Dr. Robert Kaplan and Dr. David Norton, the Balanced Scorecard (BSC) is an innovative yet practical management philosophy that provides organizations with a framework to deploy strategy.
What is Balanced Scorecard?
The BSC translates an organization’s vision and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system. In addition, the organization is able to document and define the cause-effect relationships between key measures, processes and functions. By linking measures directly to strategic initiatives, the organization stays focused and is able to move towards the long-term goals.
Why is it useful?
Balanced Scorecard takes into consideration of all aspects of business while deploying strategy. This ensures all parts of the firm are getting impacted and the impact is properly impacted. Following parameters prove beneficial- Financial, Customer, Internal and Infrastructural. The Balanced Scorecard describes how value will be created across four business perspectives based on strategy that has been defined.
The Balanced Scorecard – Some Benefits
- Provides a common framework for strategic planning
- Assures corporate strategies are clearly communicated throughout the enterprise
- Focuses management on cause and effect relationships between processes and key performance indicators
- Provides key information by measuring the results of the strategic plans and assessing the quality of tactical plans
- The Four Perspectives- The four perspectives of the scorecard permit a balance between short and long-term objectives, between outcomes desired and the performance drivers of those outcomes and between hard objectives measures and softer more subjective measures.
Implementing the Balanced Scorecard – The BMGI Approach
Fundamental to the BSC methodology is an underlying requirement to gather and share critical information throughout the strategic business unit, and across business functions. The feedback element of the BSC is essential to the process since it prepares the organization for change. Once changes have been made the process of monitoring strategic indicators, relaying the information and then managing change starts all over again.
The above stated fundamentals of good implementation of BSC are captured in the BMGI framework–
To drive the BSC journey BMGI India provides total support or partial support as required. The organization can pick the specific intervention required.
The BMGI Experience with Balanced Scorecard and Benefits
BMGI has evolved a robust BSC deployment methodology based on a decade of deployment experience. The key aspects of the approach that make a difference are-
- Structured set of templates and guide documents for every stage of process – this make the implementation easy for the organization and provides lot of clarity
- A large repository of strategic metrics which are used to guide the definition of the strategic metrics for the BSC
- Mechanism for alignment of the BSC with the organizational performance management system
- Establishment of cause and effect relationships between processes and key performance indicators high degree of involvement at all levels for effective implementation of the strategies
- Creation of a ready reckoner for strategy implementation at any point of time, such as review meetings
To know more about how your strategy deployment initiative can be made more effective by application of Balanced Scorecard, contact BMGI.