How Balance Scorecard is beneficial for the strategic improvement of the Company
Balance Scorecard this name has now become a common tool for strategic management and for performance evaluation. Performance evaluation arises when the strategic improvement takes place. The two famous people who changed the whole concept of performance metric were Robert S. Kaplan and David P Norton. Balance scorecard helps to understand and have a clear view how the company is doing overall, you can say an all round or wholesome approach. It helps to look throughout the feedback and development of financial part of the company, customer reaction, employee learning and growth and the internal business process.
Most of the companies’ operational and business management revolves around the financial targets, measures which are obtained through proper strategic objectives. Now, how to develop this strategy so that company may excel and judging the whole process through balance scorecard is really much worthy.
How balance scorecard helps to develop the strategy and make it to work out well:
- To translate the vision of the company to all, this process includes clearing the vision to all and to make everybody conscious to it.
- To translate the vision and strategy you need to communicate with all employees. Explain the whole procedure, strategies, set proper goals and link rewards to achievement of goal which will help to inspire the employees.
- Do proper business planning. Set targets to achieve, allocate proper resources as per requirement, take the strategic initiatives and try to achieve the goals and establish the milestones
- Take proper feedback from the whole process; learn from the loopholes or achievements, share the strategic view and learning among all.
Companies even set personal scorecard for employees along with organizational scorecard which helps to evaluate each employee’s performance.
Advantages of Balance scorecard in strategic improvement:
- It helps to evaluate the strategic goals and helps to develop the best process.
- It increases creativity and learning among all employees.
- Company may get unexpected ideas.
- Company may get comprehensive picture of business operation and also can get the feedback from customers.
- Helps in team building and strengthens the bonding.
- Proper measures and standards are set to evaluate the performance.
- Justified performance appraisal is done
- Helps to improve decision
- Reduces the time frame
- Helps to decrease and control the monetary loss
Balance scorecard helps to develop the key concepts and learning from Double-Loop Learning and Total Quality Management, including customer-defined quality, employee empowerment, continuous improvement, measurement-based management and feedback.
Strategy mapping is another tool which helps to find the cause and effect relationship of the strategy applied. The complete strategy mapping helps to develop trough the question of “how” and “If..Then”. This process related the internal process to customer satisfaction and financial profitability.
Balance Scorecard is a never ending process as it helps to develop latest methodology, and again it a learning process which helps to evaluate the strategy applied and shows the way what next to apply.