Balanced Scorecard: Measuring the Important Stuff
Balanced Scorecard: Measuring the Important Stuff
The Balanced Scorecard was devised by Robert Kaplan and David Norton in the early nineties. It began with the premise that an exclusive reliance on the financial indicators such as profit and loss was causing the managers and owners of businesses to do the wrong things. Subsequently it was seen as a tool to measure the success of implementing strategies or implementing good ideas. The financial indicators are great at telling us how a business has performed in the past what the Balanced Scorecard does is supplement this with measures that indicate how the business will perform in the future.
These non financial measures will depend on each business’s objectives but they could be grouped under some or all of the following headings.
* Operations (What the business does)
* Stakeholders (e.g. owners and customers)
* People (Knowledge and Learning) (the people within the business)
* License to operate (government, community relations)
* Growth (expansions, acquisitions, mergers)
* Financial
At its most effective the Balance Scorecard is a one page document and each of the measures should be linked to the strategy of the business. For example a business that has a market strategy of retaining and developing it’s customer base by providing superior post sales service needs to measure the initiatives that are in place for delivering that superior post sales service and how that has been successful in both retaining and finding new customers.
The Balanced Scorecard is a powerful reporting tool that measures the success of implementing the good business ideas. It has the potential to flag business issues months before they are reflected in the financial results. It does this by the simple principle of focusing on what the business is doing now to have financial success in the future.
Balanced Scorecard Measuring the Important Stuff - To learn more about this author, visit Gerry Maguire's Website.
Like this article? Share it with your friends
In the May edition of the Management Today magazine there is an interview with Paul Cave. Paul is the entrepreneur who established the Sydney Harbour Bridge Climb business. In it he says that “So many good ideas fail because the idea itself may be great but the delivery is not”. A Balanced Scorecard will not by itself ensure that a great idea is realized but what it will do is keep the idea implementer’s thoughts focused on what is important in achieving success.
The Balanced Scorecard was devised by Robert Kaplan and David Norton in the early nineties. It began with the premise that an exclusive reliance on the financial indicators such as profit and loss was causing the managers and owners of businesses to do the wrong things. Subsequently it was seen as a tool to measure the success of implementing strategies or implementing good ideas. The financial indicators are great at telling us how a business has performed in the past what the Balanced Scorecard does is supplement this with measures that indicate how the business will perform in the future.
These non financial measures will depend on each business’s objectives but they could be grouped under some or all of the following headings.
* Operations (What the business does)
* Stakeholders (e.g. owners and customers)
* People (Knowledge and Learning) (the people within the business)
* License to operate (government, community relations)
* Growth (expansions, acquisitions, mergers)
* Financial
At its most effective the Balance Scorecard is a one page document and each of the measures should be linked to the strategy of the business. For example a business that has a market strategy of retaining and developing it’s customer base by providing superior post sales service needs to measure the initiatives that are in place for delivering that superior post sales service and how that has been successful in both retaining and finding new customers.
The Balanced Scorecard is a powerful reporting tool that measures the success of implementing the good business ideas. It has the potential to flag business issues months before they are reflected in the financial results. It does this by the simple principle of focusing on what the business is doing now to have financial success in the future.
Balanced Scorecard Measuring the Important Stuff - To learn more about this author, visit Gerry Maguire's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
|
To learn more about the Evan Elite Author Program please contact us. |
 | |
|  |
Subscribe to Gerry's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
 |
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Accessing Capital Why Business Owners Quit NichePreneur Mindset PIPS Power Book Emotions Drive Behavior |
|
 | ||
 |
More PR Resources
Press Release Builder | |
 |
Top 50 Marketing Blogs
Top Marketing Blogs of 2010 | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
