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Balanced Scorecard is a method of continuous improvement that aims to decipher a business’s goals and strategies into precise objectives. It also aims to measure four key elements, which include- customers, finance, business processes and learning.
It was originated by a duo- Robert Kaplan and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics, to give managers and executives a more 'balanced' view of organization’s performance.
Balanced Scorecard methodology can be implemented in both manufacturing as well as service-based companies.
Managers nowadays work in such multi-faceted surroundings that, it is extremely important for appropriate objectives, their execution, to work properly for a business to develop and sustain itself. It is also worth noting that, it is important to ensure appropriate monitoring and evaluation of the objectives.
Balanced Scorecard is meant to be a long-term prospect and will only work beneficially if it is treated accordingly.
If CEO’s decide on an impulse that Balanced Scorecard would be interesting to implement in the company, it can cause employees to be insecure in the motives. And it can often leave employees believing that the Balanced Scorecard implementation is just another fad.
Moreover, not combining Balanced Scorecard to corporate management processes can lead to problems. Further, it cannot simply be added to a ‘current’ system in hope of enmeshing together in a beneficial way. There will be no positive impact on the company, if Balanced Scorecard is treated as a stand-alone feature.
Tip: Note that Balanced Scorecard must be used with other business process improvement systems and should not be used entirely on its own. Using Kaizen for implementing Balanced Scorecard methodology has been found to be extremely effective. Checkout details about Kaizen here.
As with any other process improvement methodology implementation campaign, clear understanding of the Balanced Scorecard methodology is vital.
It is imperative that everyone involved such as, C-suite, Managers and all employees, understand why Balance Scorecard is being implemented (at the organization) as well as when, why and how will it potentially have positive and long-lasting impact on the company.
If employees are not properly educated about the reasons for implementing Balanced Scorecard, then its introduction will appear as ‘just-additional-work’ leading to employee resistance and unrest within the work force.
Additionally, Balanced Scorecard is a forceful method of implementing process change, so it’s been found to never well received by employees whole heartedly.
Further, it also creates confusion within the leadership team, as to ‘who is in charge’. Hence, organizations must have a clear communication policy, hierarchy set up & job function to-dos pre-assigned before implementing Balanced Scorecard.
Check out more about Balanced Scorecard and eighteen different business process improvement techniques here.
- Kaizen for pharmaceutical, medical device and biotech industries.
- Business process improvement techniques for manufacturing and service industries.
- How to choose a business process improvement technique for your organization.
- 30 Popular continuous improvement tools.
- YouTube #Shorts videos on Continuous Improvement.
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