Effectively developing and communicating high-level business strategy is essential for organizations looking to achieve market leadership. Additionally, creating a results-oriented culture requires a comprehensive management system. You can use Balanced Scorecard Strategy Map tool as a basis for implementing a proven business performance management methodology.
What is the Balanced Scorecard Approach?
Developed in 1992 by Kaplan & Norton, the Balanced Scorecard provides: a method for aligning business strategy with vision & mission; a system for developing key performance indicators that drive success; and the ability to measure performance across the four key perspectives.
It is a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.
Whereas conventional Performance Management focus on financial metrics, the BSC is “balanced,” in that it takes into consideration non-financial metrics as well. Specifically, the Balanced Scorecard approach takes into account 4 areas of measurement:
1. Financial Measures
2. Customer Relationships
3. Internal Business Processes
4. Learning and Growth
The Balanced Scorecard also relies on 4 key management processes to connect short-term activities to long-term objectives:
1. Translating the Vision
2. Business Planning
3. Communicating and Linking
4. Feedback and Learning
The BSC approach to Strategic Management is a continuous, iterative process.
A visual strategy map is created where strategic objectives, measures, targets, and initiatives are developed for each perspective.
Strategy Map Components:
• Mission – this is the purpose of the business used to guide internal staff.
• Vision – includes long-term goals that are external and market focused.
• Financial Perspective – measures that reflect financial performance such as return on assets, liquidity ratios, or return on investment/payback period hurdle rates.
• Customer Perspective – measures that have a direct impact on customers such as segment growth, acquisition & retention rates, satisfaction, or competitive rankings.
• Business Process Perspective – these metrics are key performance indicators of key business processes related to sustaining supplier relationships, producing products/services, distribution to customers, and other business operations.
• Learning & Growth Perspective – measurements associated with the ability to develop human, information, and organization capital.
How Can Dawgen Global help ?
Dawgen Global is an integrated multidisciplinary professional service firm . We assist clients with several advisory services including Strategy Execution. Let’s have a conversation ! Email us : [email protected]
