Website design By BotEap.comMany corporate managers have been introduced to a corporate management system called the sBalanced Scorecard. Developed at Harvard Business School by David Norton and Robert Kaplan in the early 1990s, the Balanced Scorecard (BSC) represents the newest and most prolific performance measurement system since Total Quality Management (TQM) and General Management. by objectives (MBO). A growing number of organizations are achieving great financial success through the BSC framework, solidifying the BSC as a “here to stay” rather than just another fad.

Website design By BotEap.comAccording to studies, the BSC is being implemented in almost two-thirds of North American corporations. Indicative of system growth, many of these deployments are less than six months old. Therefore, as an administrator, if the system has not yet been found, it most likely will be in the near future.

Website design By BotEap.comWhat does this mean for managers?

Website design By BotEap.comFIRST, recognize the Balanced Scorecard for what it really stands for. Essentially, the BSC is a measurement framework through which organizations define strategic objectives at all levels of an organization with measures attached to each objective, allowing managers to review past performance and predict future and take action from corrective improvement. The BSC is significantly different from other management systems in that it forces organizations to measure only the few main strategic objectives and to align each employee with their interpretation of these objectives. Ultimately, the BSC is a proven methodology for executing a business strategy.

Website design By BotEap.comSECOND, harness the power of the Balanced Scorecard. If managers can skillfully create their divisional, departmental, or team goals, identify helpful metrics, and allow those who work for them to take predictive action against performance deficiencies, the BSC can truly become a value-added manager tool.

Website design By BotEap.comTHIRD, understand the big picture of executing business strategy. Organizations that have successfully implemented a Balanced Scorecard framework and achieved remarkable results followed these 10 steps:

  1. Develop a solid strategy A solid strategy is the cornerstone of business success. Without a solid strategy, success is unattainable. Of course, without execution, a solid strategy is meaningless.
  2. Translate the strategy into a scorecard of clear objectives By translating a strategy into objectives (short verb and noun statements), managers and front-line employees understand both what is expected and why. To achieve the best results, the scorecard should focus on no more than ten strategic objectives.
  3. Attach measurements to each objective After translating a strategy into objectives, managers and employees must know if and when the objectives are being achieved. Therefore, each goal should receive at least one, but no more than three, measures that are precise milestones for achievement.
  4. Cascade scorecards to the front line Operational management and front-line employees do the real work that makes strategies happen. Therefore, organizations must ultimately develop scorecards at all levels of an organization, allowing each person to see how their specific job duties align and contribute to higher-level goals. By cascading dashboards, strategy becomes “everyone’s” job.
  5. Align existing core processes with goals As scorecards are rolled out, managers must re-examine their existing core processes and determine if they are tied to corporate strategy. If no such links are found, the processes should be reconsidered. Aligned processes are often the best places to find appropriate metrics for lower-level scorecards.
  6. Deliver measurement-based performance feedback Managers must provide each employee in an organization with regular feedback on how their individual and corporate actions have progressed. Monthly dashboard content reviews and related improvement initiatives are an ideal format for these comments.
  7. Hold people accountable for performance measures When performance measures go below or above predetermined thresholds, organizations must hold specific individuals accountable for explaining the reason (s) behind a measurement variation.
  8. Empower working groups to implement improvement initiatives. Managers and employees should be empowered to take corrective action when performance suffers and to replicate best practices when targets are exceeded.
  9. Link initiatives to the budgeting process As an organization tracks its performance measures and reacts to deficiencies, improvement solutions often require budget support. Therefore, a formal budget submission and approval process must be integrated into a strategy execution system to ensure that countermeasures are implemented.
  10. Reassessment of the main strategy As the closed loop process returns to the overall strategy, it is important to gather organizational knowledge and progress toward strategic goals, as well as reassess the market, competitors, and customers to determine whether the high-level strategy needs to be adjusted or conform. drastically changed.
Website design By BotEap.com FOUR, managers must be aware that they have the power to execute business strategies. As illustrated in the ten steps above, managers and front-line employees translate goals and measures at different levels within an organization. The accuracy of these measurements determines the effectiveness of the organization and its ability to achieve overall objectives. On the other hand, be careful not to become a bottleneck within a strategy execution system. Just as a manager’s role determines ultimate success, his inaction or inattention to a system can also attract quick and negative attention. Strategy systems like the Balanced Scorecard are successful only when measurements are recorded on time and accurately for each period. Therefore, managers must remain diligent in the area of ​​using the system or risk drawing attention to themselves.

Website design By BotEap.comFIFTHDon’t forget that a strategy execution system impacts everyone who is managed. Therefore, the manager’s challenge is to empower front-line employees with the collaboration tools necessary to encourage rapid implementation of improvement initiatives and replication of best practices.

Website design By BotEap.comFinally, embrace technology. The market for software solutions to automate the strategy execution process is growing rapidly. According to the Balanced Scorecard Collaborative (www.bscol.com), nearly 75% of companies that implement a BSC will also implement a software solution to automate the process. If managers express interest and become involved in the process of selecting and implementing these software solutions, systems can be transformed into tools to improve work, making managers even more effective and efficient in achieving strategies.

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