Over time, companies are introducing changes not only in their product and service offerings, but also in how the whole organization should perform towards the achievement of company goals and objectives. Among the improvements introduced in organizational strategy is the balanced scorecard concept. This concept was first developed by Art Schneiderman, an independent consultant who specializes in the management of organizational processes, and was first heard in the late 1980s. Art Schneiderman also participated in an unrelated study led by Dr. Robert Kaplan in 1990. It was in this study that Dr. Kaplan's work was described as moving towards a balance in different areas to bring in success to the company more effectively.
And this gave birth to the balanced scorecard concept. And while much of the credit is given to Art Schneiderman and Dr. Kaplan, this concept also traces back its roots to the performance management concepts running deep in management literature and practice. The earliest design of this concept involved tables classified into four sections or perspectives, usually labeled as financial, customer, internal business processes, and learning and growth. This then required executives and managers to develop measures for each of the perspectives.
These days, the design of this concept involves the identification of a small number of measures that involve both the financial and non-financial aspects of the company. Similar to the original design method, targets are assigned to them and these are then reviewed to determine whether current performance is able to meet, exceed or fall short of expectations. In this way, appropriate strategies can be developed towards the achievement of goals in the financial, customer, internal business processes, and learning growth areas.
The design process of the balanced scorecard concept also involves four steps: translating the company vision into operational goals, communicating the vision to each and every employee of the company and linking it to individual performance, business planning and index setting, and feedback and learning, as well as making adjustments to the strategy accordingly. These four steps go far beyond the simple task of identifying financial and non financial measures. They also illustrate the need for a design process that can be used to fit within a broader line of thinking of how the balance in scorecards can integrate into the whole business management process.
It can be a good advantage to learn more about the balanced scorecard concept and how it can be effectively implemented as a strategic planning and management tool. This concept might just be the very solution to the different gaps between performance and company goals and objectives.
And this gave birth to the balanced scorecard concept. And while much of the credit is given to Art Schneiderman and Dr. Kaplan, this concept also traces back its roots to the performance management concepts running deep in management literature and practice. The earliest design of this concept involved tables classified into four sections or perspectives, usually labeled as financial, customer, internal business processes, and learning and growth. This then required executives and managers to develop measures for each of the perspectives.
These days, the design of this concept involves the identification of a small number of measures that involve both the financial and non-financial aspects of the company. Similar to the original design method, targets are assigned to them and these are then reviewed to determine whether current performance is able to meet, exceed or fall short of expectations. In this way, appropriate strategies can be developed towards the achievement of goals in the financial, customer, internal business processes, and learning growth areas.
The design process of the balanced scorecard concept also involves four steps: translating the company vision into operational goals, communicating the vision to each and every employee of the company and linking it to individual performance, business planning and index setting, and feedback and learning, as well as making adjustments to the strategy accordingly. These four steps go far beyond the simple task of identifying financial and non financial measures. They also illustrate the need for a design process that can be used to fit within a broader line of thinking of how the balance in scorecards can integrate into the whole business management process.
It can be a good advantage to learn more about the balanced scorecard concept and how it can be effectively implemented as a strategic planning and management tool. This concept might just be the very solution to the different gaps between performance and company goals and objectives.
About the Author:
CMOE has been helping companies with finance for non-financial managers and team building since 1978. Through results based leadership and other innovative business techniques CMOE has established themselves a leader in the business world. Visit www.cmoe.com for more information.
Post a Comment