Balance score card is tool which offers companies the ability to map and monitor strategy across four critical perspectives-financial, customers, internal and learning and growth.
The score cared helps executives lead as well as manage .it helps them communicate a sense of vision and mission and gets their people aligned to the mission .The scorecard provides a framework to describe your strategy .you cant build a good scorecard unless you have a strategy. Otherwise you end up only with a set of unrelated key performance indicators.
The process of developing a BSC begins by drawing up a strategy map covering around 20-25 critical objectives, spanning the financial, cutomer,internal and learning and growth layers that are critical in making the strategy work .the score card thus identifies, records and keeps track of the linkages between the processes in an organization and establishes an ends and means relationship.
Example . when an organization realizes that its profit margin are down because of tough competition, it may decide to launch a new product because of tough competition ,it may decide to launch a new product which promises a better margin .Marketing gets the job of developing ,test marketing and finally launching the product in given timeframe .
Operations is required to develop the processes to produce the desired quantity of the product and hr helps develops the required skills sets by training and hiring talent from outside .The strategy map not only identifies these linkages but also works out things to be measured .it sets up quantitive targets which are recorded ,reported and reviewed periodically . Anyone wants to take this discussion ahead ? Sunil Madan |
