Create a Balanced Scorecard
The format of a balanced scorecard can vary, depending on the data, the company and the industry. Some organizations use a spreadsheet, or it can be outlined in paragraphs in a word processing document. Some companies and consultants can design special software and databases for the purpose of a balanced scorecard. Companies and organizations are using balanced scorecards during periods of strategic planning and organizational change. They are used to evaluate the performance of the company, and assess what opportunities and challenges need to be addressed when outlining goals and objectives for the future. Robert Kaplan and David Norton first introduced the concept in 1992 in a Harvard Business Review Article. Create a balanced scorecard to improve performance and motivate teams responsible for an organization's success.
Steps
- Assess the mission and culture of the group. Include consideration of the organization's challenges, vision, and partners. Identify the components of the change management plan that will need to be communicated with the organization and other key stakeholders.
- Focus on customer needs. Develop a strategy around how the company can best meet the needs and expectations of customers or clients. Determine what value the organization brings to its customers and greater community.
- Define the organization's intent. Focus on the mission statement. Write specific objectives that correspond with strategy themes for what the organization wants to accomplish.
- Map out the process. Use strategic mapping to determine how the organization plans to complete the objectives defined within strategic themes. Include specific values that the organization or company will bring to their customers and other stakeholders.
- Develop performance measures. Identify how performance will be evaluated, what standards must be met, and benchmarking data developed. All results must be measured and expectations must be communicated.
- Assign initiatives. Make team members aware of their responsibilities, and how they will be held accountable for their performance. Get team members on board with the strategic plan and the direction of the company by showing them the role they will be playing in its success.
- Implement the process. Use a standardized system to input and track the objectives and initiatives, and communicate results. Custom software can be used, or a simple spreadsheet. Any automated system that works for the company and is understood by all contributors will support the implementation of the strategic plan.
- Cascade the scorecard. The balanced scorecard used at a macro, organizational level should be replicated for specific departments and smaller groups tasked with meeting each objective. Keep the measurement tools and evaluation procedures consistent for every objective.
- Evaluate the scorecard and the process. Review the balanced scorecard. Evaluate whether the objectives are being met, and if the process to meet the objectives is working.
- Adjust the balanced scorecard as needed. The scorecard and the process should be kept flexible so that changes can be incorporated as strengths and weaknesses are identified.
Tips
- Remember to keep the entire company or organization informed. The best way to get everyone accountable for the success of a strategic plan and participation in the balanced scorecard is to communicate well. People at all levels of the company should understand the process and the results.
- While the process may be complicated and involve the dedication of company time and resources, statistics show that organizations using a balanced scorecard outperform those that do not use such a measurement tool.
