Balanced Scorecard: Management Not Measurement
2 July 2021
Balanced Scorecard: Management not Measurement
The Balanced Scorecard is a strategic performance management tool designed for managing strategic performance and not only as a measurement and reporting tool. Kaplan and Norton suggest that the process of strategic performance management consists of four critical processes:
- Clarifying and translating the vision and strategy
- Communicating and linking the strategic objectives and measures.
- Planning and setting targets, and aligning strategic initiatives
- Enhancing strategic feedback and learning
Clarifying and Translating the Vision and Strategy
The process of identifying the strategic objectives and visualising them in a Strategy Map is the starting point for any Balanced Scorecard implementation. Consensus needs to be achieved among senior leaders in an organisation about the key objectives and they way they interrelate. There are often iterations between identifying objectives and mapping them into causal maps as a Strategy Map ensures that all objectives and measures are linked to overall deliverables and isolated objectives or ‘pet projects’ are avoided.
Communicating and Linking the Strategic Objectives and Measures
Communicating the overall vision in form of Strategy Maps with associated KPIs throughout the entire organisation means that objectives are much better understood and local objective and targets can be placed into the overall strategic context. A two-way communication system should be put in place to encourage dialogue between the business units and executive management in order to engage people in the strategy process and to allow feedback.
Planning and Target Setting, and Aligning Strategic Initiatives
Targets should be established for each of the objectives and measured by the KPIs. The target setting process is best done in the context of the strategic initiatives and projects that are linked to each of the strategic objectives. Targets should take into account causal-and-effect lag times and should be stretching but achievable.
Enhancing Strategic Feedback and Learning
In the final stage of the management process, the Balanced Scorecard is integrated into a strategic learning process. Together with Kaplan and Norton I agree that this process is the most important aspect of the entire scorecard management process. It is important to put processes in place which enable managers to learn from their performance information and improve their future decision making. In addition, Strategy Maps and KPIs should be used to challenge and test the business model in order to refine and improve it over time to continuously improve performance.
Related Articles
The Amazing Ways Coca-Cola Uses Generative AI In Art And Advertising
Some say that in the very near future, we’ll need to either adopt artificial intelligence (AI) or be made redundant by it – or by others using it.[...]
The 5 Biggest Risks of Generative AI: Steering the Behemoth Responsibly
In our contemporary world, the pressures of the professional sphere often encroach upon our personal space, giving rise to stress and an overwhelming sense of dread.[...]
3 Ways To Reinvent Your Products And Services For The Future
With the rise of the metaverse and web3 technologies, there’s no denying the next evolution of the internet is already underway.[...]
Virtual Influencer Noonoouri Lands Record Deal: Is She The Future Of Music?
Teenage influencer Noonoouri has 400,000 followers on Instagram and has starred in fashion campaigns for Dior, Balenciaga and Valentino.[...]
Managing Stress at Work: 5 Top Tips Anyone Can Follow
In our contemporary world, the pressures of the professional sphere often encroach upon our personal space, giving rise to stress and an overwhelming sense of dread.[...]
6 Roadblocks Stopping Web3 And The Metaverse Becoming A Reality
With the emergence of the metaverse and web3 technologies, it’s clear that the next evolution of the internet is already underway.[...]
Stay up-to-date
- Get updates straight to your inbox
- Join my 1 million newsletter subscribers
- Never miss any new content
Social Media