Do We Still Need Balanced Scorecards?
The balanced scorecard is a strategic planning and management system used to align business activities to the strategy of the organization, improve communications, and monitor organization performance against goals. It was originally developed as a performance measurement tool that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more ‘balanced’ view of organizational performance. It’s essentially a dashboard.
But that was 20th Century Thinking. Do these statistics really “mean” anything in the 21st Century? Can individual figures actually translate into “marching orders” in today’s day and age?
Janet says “Yes!” The balanced scorecard figures, if carefully chosen, can provide both measurements (against a baseline), indicating health and wellbeing of an organization and its programmes, and management incentives (read: KPI’s). “When fully deployed, the balanced scorecard system can transform strategic planning from an academic exercise into the nerve center of an enterprise.”
So if you’re still doing corporate strategies, you still may get benefit from a balanced scorecard.
What type of information do we need in a “balanced scorecard”?
Traditionally, the balanced scorecard reported on four “perspectives”:
- Financial
- Customer
- Learning and Growth
- Business Process
However, Janet suggests these are merely starting points: “The information that is communicated within a balanced scorecard is best mapped to the perspectives required to achieve corporate targets. This means focusing those perspectives on the Board level and the direction and figures that they perceives as important to their targets.”
