Putting the Balanced Scorecard to Work
Managers recognize the impact that measures have no performance but they think that measurement is an essential part of strategy. Effective management however is an integral part of management process. New strategies and process are being introduces to improve performance without examining whether old measures of performance are relevant or whether new one is necessary.
The balanced scorecard combines an effective measurement system that help a company’s strategic objectives with a management system that can help drive changes in key areas such as products process customer and market development. The scorecard presents manager with four different perspectives from which to choose measures.it compliments traditional finance indicators with measures of performance for customer internal process and innovation and improvement activities. The measure of the balance scorecard helps focus a company’s strategic vision encourages thinking about ...view middle of the document...
The measures used by Rock water are
Financial 1. Return on cash employed 2. Cash flow 3. Project profitability 4. Reliably of performance | Customer 1. Value for money Tier I 2. Competitive price Tier II 3. Hassle free relationship 4. High performance professional 5. Innovation |
Internal 1. Shape customer requirement 2. Tender effectiveness 3. Quality service 4. Safety/loss control 5. Superior project management | Growth 1. Continuous improvement 2. Product and service innovation 3. Empowered workforce |
Balanced scorecard helped Rock waters management implement changes to make it a leader in its industry.
Other examples are also there in this article that’s show how different companies used balance scorecard differently. Apple computers used balance scorecard as a planning tool. AMD made an easy transition to the use of balance scorecard because it already clears defined mission and performance measures.
Building a Balanced Scorecard
Following are the steps for building a Balanced Scorecard.
1. Preparation: Define the business unit that a top level scorecard is appropriate.
2. Interviews first round: facilitator interviews executives too get input on strategic objectives and possible measures.
3. Executive workshop first round: Group debates proposed mission & strategy statements until consensus is reached.
4. Interviews second round: facilitator compiles information & interviews executives about the tentative balanced scorecard.
5. Executive workshop second round: debates organizations vision strategy and the tentative scorecard start to develop implementation plan.
6. Executive workshop third round: comes to final consensus on the vision objectives and measurement developed. Agree on implementation plan.
7. Implementation: develops an implementation plan for scorecard.
8. Periodic review: quarterly or monthly review on balance scorecard.
Implementing the Balanced Scorecard at FMC Corporation: An interview with Lady D.Bird
In this interview of Lady D.Bird with Kaplan discussion of his implementation of balanced scorecard. Balanced Scorecard helps managers to focus on company’s strategy. The types of measures include in scorecard is implementation benchmarking problems encountered and involvement of management all discussed.