Another technique in the BABOK is the Balanced Scorecard. If you’re like me, you may have heard the term before, and perhaps you’ve seen an example in a company presentation. However, unless you are a CEO or a high-level executive, what this method really represents might be something of a mystery. Being that this was a brand new technique for me, I delved a little deeper. Here is what I learned.
What is a Balanced Scorecard?
A balanced scorecard is a strategic planning and management tool. It is used to evaluate performance beyond just the normal financial measurements. The goal of this technique is to provide a balanced view of the organization, with focus of the following specific dimensions:
- Learning and Growth
- Business Process
What Aspects of These Dimensions Should be Considered?
For each dimension, determine metrics for aspects such as objectives, measures, targets, and initiatives. Consider some of the following questions for each dimension:
Learning and Growth
- What training is needed for employees?
- How will we innovate our products and services?
- How satisfied are employees with the corporate culture?
- How well is the organization operating?
- Does the product or service meet customer needs?
- What processes must the organization excel at in order to satisfy customers and shareholders?
- Are the needs of the customer being met?
- Are they satisfied with the product or service provided?
- Did the product or service meet the customer’s quality expectations?
- What was the customer’s overall experience with the organization?
- Are we profitable?
- Is our revenue growing?
- What must be done financially to realize the organization’s strategy?
What Are the Advantages of Using a Balanced Scorecard?
There are a number of reasons that this technique is helpful. This technique:
- provides a more holistic view of an organization
- aids in aligning strategy, tactics, and operations
- assists in defining programs for incremental success toward long-term goals
- encourages looking ahead
- drives competitiveness
Are There Any Drawbacks of This Technique?
The organization’s strategy must be clearly defined in order to align to the dimensions. It is also just one tool of many that may be used for strategic planning; it should not be viewed as a replacement for traditional strategic planning, execution, and measurement.