Balanced scorecard example - Free Download
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This balanced scorecard template was written to save you and your company the time and money it would take to write your own from scratch. It was formulated for a bank but can easily be adjusted to meet the needs of any institution. You can download the free properly formatted document in Word. Read the balanced scorecard overview below.
An overview of the balanced scorecard by Visum Solutions, Inc. & Organization Thoughtware International states as follows: The balanced scorecard is an organizational framework for implementing and managing strategy at all levels of an enterprise by linking objectives, initiatives, and measures to an organization's strategy. The scorecard provides an enterprise view of an organization's overall performance. It integrates financial measures with other key performance indicators around customer perspectives, internal business processes, and organizational growth, learning, and innovation. Since the concept was introduced in 1992, balanced scorecards have been implemented at corporate, strategic business unit, shared service function, and individual levels at hundreds of organizations in both the private and public sectors - worldwide.
Visum Solutions, Inc. & Organizational Thoughtware International further stated that the balanced scorecard has been proved to be a powerful performance management framework. However, a successful roll-out should allow to think differently, better achieve a cultural transition and get the larger group to move in the same direction. Success can be achieved by using the balanced scorecard as a strategic navigational chart - which will balance the scorecards, link the scorecards to the enterprises' strategic direction, and institutionalize the scorecards within the organizations. Read the balanced scorecard sample.
Balanced Score card Sub-sections
Lafferty Publications suggested that the most distinctive feature of the balanced business scorecard is that it is divided into a number of sub-sections. Kaplan and Norton initially divided theirs into four: financial; customer; internal business; and innovation and learning. They said he principle is that any sensible strategy will have all these separate components.
Visum Solutions, Inc. & Organizational Thoughtware International described these components under the headings: financial perspective, customer perspective, internal perspective, and learning and growth perspective.
Every measure ultimately ties to financial results. There are only two ways to improve financial performance. Either grow the top line, Revenue Growth, or produce with less, Productivity.
Note: There is always a time element to strategy, and a good scorecard/strategic navigational card is balanced - balanced between the longer and shorter term. For example, productivity usually provides results quicker, but at what expense to revenue growth?
In so far as we have determined that the strategy of any company is a cause-and-effect hypothesis, we need now ask "what can we do (cause to happen) to increase (effect) our revenue from new and existing customers"? In other words, why would people buy from us? How do we differentiate ourselves from the competition? The business gurus refer to this as the company's value proposition. There are three generally acknowledged generic value propositions (see Treacy, Michael and Fred Wiersema, The Discipline of Market Leaders, Addison-Wesley, 1995):
Note: The value proposition of the balanced scorecard connects the internal processes to the improved customers with the customers.
With the financial perspective and customer perspectives in place, it is time to discuss how we intend to "make it so". If we fail to deploy this properly, we will also fail to "walk the talk". "Touchy-feely" stuff, like "innovation" and "value added to customers" and "total quality" become no more than that - "touch and feel". They only become "real" when the business process required to deliver "innovation", "value added to customers" and "total quality" are measured. After all, if you have no way of knowing whether or not you achieved your goal - it is just an idea. Until we belly up and measure this "difficult stuff" that matters, and not just the easy stuff that is comfortable, we are a philosophy without technique. We have no methodology, and therefore, we cannot implement the strategy. In our standards there are four internal processes. Perhaps one could argue there are more, but the debate is at the margin. The human body, as complex as it is, only has seven core processes and only two of those are vital for life support. Surely our organizations are no more complex than the human body. These processes include:
This is the future perspective or how the business will look in the fullness of time. This is the foundation and critical point of leverage and the point where the implementation becomes possible. Precious few organizations seem to reach this point. The leverage point appears too far from the financial objectives and the cause-and-effect linkage is not a direct line of sight. However without this piece, the "story of the strategy" is incomplete. The learning and growth perspective can be addressed in three critical areas:
Lafferty Publications explained the attributes of a successful scorecard under the heading as follows:
The Attributes of a Successful Scorecard
Rick Anderson of BP, a company with extensive experience of implementing scorecards, has outlined five basic requirements for a good scorecard. It should be acceptable, suitable, feasible, effective and aligned. They summarized the following other attributes:
Thanks to Lafferty Publications, as well as Visum Solutions, Inc. & Organization Thoughtware International for the information presented on this balanced scorecard page. Back to balanced scorecard overview.
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