Interested in developing a system for measuring the critical components within your business in order to strengthen your company and reach your goals? Then the balanced scorecard may be just the tool for you.
The balanced scorecard is a measurement and management system that can channel the energies, abilities and specific knowledge held by people throughout a business towards achieving long-term strategic goals. It allows a company to measure its performance in critical areas that are key to its success.
Each business has a unique path to success. The steps to developing a balanced scorecard force a company to clarify its strategy and key success factors. Measurements developed in this process focus activities that are important to success. The scorecard then becomes a tool that improves communication, empowers people to make informed decisions and aligns work throughout the company. It reinforces the behaviors in people that are important to reach the company goals.
The process is not difficult. It involves nine steps that are covered in three, two-hour sessions. It requires about an additional hour of work between each session.
The nine steps are:
- Step 1 – Define your key success factors
- Step 2 – Identify common themes (perspectives)
- Step 3 – Select measures for each perspective
- Step 4 – Establish goals for each measure
- Step 5 – Narrow the measures to a vital few
- Step 6 – Develop a collection system
- Step 7 – Communicate
- Step 8 – Trickle down the measures
- Step 9 – Evaluate, revise and redeploy
Session 1 helps you clarify the critical strategies for business success and begin developing measures for those things critical to your success.
Session 2 focuses on establishing goals and narrowing them down to a critical few in order to provide a snapshot of those things that will lead to success in the company.
Session 3 provides guidelines for you to implement your scorecard in the daily work of your business.
To help you get started, read Introduction to balanced scorecard.
For more information, contact a business development specialist at your local SBTDC office.
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