When organisations are ready to think organisational excellence, they normally begin to think balanced scorecards. Now it is a typical tool for high performance businesses, but you can act like a high performing business whether you are a lifestyle business, start up or even a wilderness business. You are simply taking hold of where your business is and how to measure performance against key indicators.
Using a balance scorecard can help you measure business performance using both financial and non-financial information. Just like vision, mission and goals it can help you align your team to the business.
The scorecard provides four different perspectives:
- Financial – financial performance for example ROI, turnover, profit percentages etc. Pick one or two measures and monitor it. Your goal might not be huge growth, but more operational efficiency for example.
- Customer – customer satisfaction, feedback, complaints, referrals, upsales, retention rates.
- Internal processes – Business efficiency, audit failures, conflicts, misunderstandings, performance reviews, system outages etc
- Organisational capacity – Knowledge and innovation, idle time, peak capacity
- I recommend adding a people/culture element. It helps you focus on your most valuable asset. It might be employee engagement scores, performance reviews, resignations, number of people developing, training budget vs spend, sick rates...
Activity
What are the key challenges or problems in your team or business right now or in the future?
With your team, map the problems against the scorecard criteria.
If 10 looks like excellence – where are you now?
Agree on the projects or strategy to move the business/team forward.
For larger organisations, ask all teams to do the exercise and create their own scorecard. Does it align to the business scorecard?
A Balanced Scorecard is most often used in three ways:
- To bring an organization’s strategy to life. Those in the company can then use this strategy to make decisions company-wide.
- To communicate the strategy across the organisation. This is where the strategy map is critical.
- To track strategic performance. That’s typically done through monthly, quarterly, and annual reports.
As leaders, you don't want to be bogged down with detail. The teams provide you with the high level data, which you can drill down on if needed. It enables you to take a snap shot of how you are performing and then to make decisions are what to stop doing, what to start doing and what to continue doing.
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