For any organization to succeed and achieve a sustainable growth, the Success Formula is,
Success = Strategy Formulation + Strategy Execution
Strategy Execution ? Organization’s Capability
Organization’s capability = Processes + People Skills + Resources
Many surveys address that strategy execution is more difficult than the strategy formulation. As such for an organization to achieve sustainable results, it requires them to go beyond formulating a strategy to successfully executing the strategy. Balanced Scorecard introduced by Kaplan and Nortan has been proven in helping organizations to successfully execute their strategy.
Balanced Scorecard is defined as a framework for translating strategy into operational targets and actionable points, which influence the behavior of people and processes and thus their performance.
The balanced scorecard provides executives with a comprehensive framework that translates a company’s vision and strategy into a coherent set of performance measures.
Traditionally the Balanced Scorecard is used for establishing a performance management system, the best of Balanced Scorecard can be realized when it is used as a strategy deployment framework combined with performance management.
Balanced scorecard helps organizations identify the performance measures across the four perspectives viz., Financial, Customer, Internal Process and Learning and Growth.
(Financial Perspective) Financial Measures – these are generally short term and actions to improve on these measures show immediate results. Financial measures are lagging indicators and tell us about our past performance. Some examples of Financial Measures – RONA, Profitability, etc.
(Customer Perspective) Customer measures – these are generally medium to long term and actions to improve on these measures might take several months or years to show tangible results such as financial benefits or improved market share, etc. Some examples of these measures are Market Share, Customer Satisfaction, Customer Retention, Customer Profitability, Life Time Value of a Customer, etc.
(Internal Business Process Perspective) Internal performance measures – these are generally medium term and actions to improve on these measures take longer to show tangible results in terms of financial benefits or benefits to customers. Some examples for these measures include Productivity, Capacity utilization, Equipment availability, Defect Rate, Yield, Lead Times/ Cycle Times, etc.
(Learning and Growth Perspective) Learning and Growth measures – these are always long term; Actions to improve on these measures might take years to show tangible results. Some examples of these measures include People Skills, automations, technology adaptations, systems and processes, etc.
Our consultants help client organizations identify the factors which would result in competitive edge for the organization and translate the same into operational targets. The process helps organizations to identify the processes in which organizations should excel to stay ahead of competition and create value for its customers.
To know more details on how Balanced Scorecard can accelerate your business, mail us on firstname.lastname@example.org