The Daily Telegraph calls innovation “the lifeblood of business” – and using a balanced scorecard can help businesses of all sizes share its benefits.

The balanced scorecard can help businesses share the benefits of innovation – something the Daily Telegraph says that without, “British business cannot compete on the world stage,” but “is regarded by too many companies as complicated, high cost and high risk.”

Innovation, the paper rightly says in an article on its website, is just as important for small- and medium-sized enterprises as it is for large ones. And for SMEs that don’t have the money to hire consultants or devote staff time to “what can seem a fuzzy concept”, a balanced scorecard can be a way to identify and nurture improvements to the way the business works.

Balanced scorecard for small enterprises

The Telegraph quotes Paul Hender, the media analysis director of Metrica, a small company who began using a balanced scorecard. “Innovation doesn’t have to be a brand new idea,” says Paul. “It’s about making things new to you and adapting things other industries are doing.”

The article describes the balanced scorecard as a management tool that “combines financial measurements with intangibles such as internal process, education and training and customer service to provide a total picture of the company’s health”.

Small companies can use balanced scorecards

It continues, “‘We thought, why can’t you use [the balanced scorecard] for a small company?’ Hender says. ‘We do things that aren’t financial, but are nonetheless integral to whether we’re a success or not.’

“Metrica has just produced its first balanced scorecard report which revealed surprises, both good and bad. The company realised it was spending too much on stationery, for instance, but client satisfaction is higher than it thought.”

Benefits of balanced scorecard as an innovation tool

Using the balanced scorecard as a tool for innovation means the company has quickly and cheaply identified areas where it can cut costs, as well as finding out what it is good at and can perhaps sell itself more strongly on in the marketplace.

The Telegraph article also uses an example from Pfizer which could be easily copied by SMEs. The pharmaceutical company finds out its people’s talents outside their job description in order to put them to use in work to which they may be more effective, productive and satisfied. The balanced scorecard, by its very nature, is ideally suited to help measure and identify people’s strengths and weaknesses, whether in their core day-to-day roles or other areas.