[Music] attention [Music] hi my name is Erica Olsen in this whiteboard session we'll be explaining the fundamentals of the balanced scorecard if you've seen our other whiteboard sessions that strategic objectives talks a little bit about it as well and this follows up on the key performance indicator whiteboard session so check those out too this one goes over the high points of the balance being one component and the scorecard being the other component so what do we mean by balanced the structure of the balanced scorecard is a way to think about your organization holistically the battle scorecard was developed by two guys out of Harvard Robert Kaplan and dr. Norton and they've said let's look at the organization in four different ways not in silos of departments but actually holistically and what does that look like let's see what we mean by that one perspective we need to look at is the financial perspective which says how are we looking to our shareholders driving down then into a customer perspective is what value do we need to provide to our customers or our constituents in order to achieve our financial goals so that's the second perspective of the scorecard the third one internal so if we are going to achieve our financial goals and provide value to our customers to achieve those financial goals what internal processes must we excel at in order to provide the value to achieve the financial targets we're speaking and the first perspective is the people perspective which is what skills and capabilities must we have in our organization to drive the internal processes to provide value to our customers to reach our financial targets so again we can think about this as a strategy framework to make sure that our strategic plan is effective and integrated and holistic but also a way to kind of think about the organization again not structurally but holistically or in this case balanced this is a very high-level look at what might be called a strategy map so that's one of several tools used in the balanced scorecard so that's the part about the balanced let's move to the part about the scorecard so the scorecard is as you might imagine it looks like a scorecard and it is really about the monitoring and measuring of your strategic plan how's it broken down it is pretty simple it should be broken down in your four categories we just have one example here but you know certainly you would expect to see all of the goals in your plan again they're balanced on your scorecard so we have our goals statement is the first item on the scorecard and in this case our example is improve customer satisfaction and loyalty by 20% we have a measure associated with that goal and I have a couple of them here so one is your customer satisfaction survey score perhaps we say we want to increase it by 20% so the measure is what are we measuring and the target is what's our increase another measure that we might look at is delivery time maybe in this example customer customers value getting their stuff on time and so delivery time might be a measure of customer satisfaction and the target might be in less than 4 days maybe we're a retail online retailer these two different measures are pretty interesting and this is also part of the scorecard we don't need to get too confused about this but just think about it the delivery time is what we would call a leading indicator it's a driver it's telling us how we're doing before we actually get that customer satisfaction survey back and this might be a lag as it's already happened the customer satisfaction customers are either satisfied or not satisfied and we learn about that in a surveys score but the delivery time would actually be leading to let us know how people are maybe thinking about how we're doing as an organization and how we're satisfying our customers so leading the light indicators kind of a next-level thing with the scorecard but broken down pretty simply here all of the goals in your strategic plan are on the scorecard with your measures and your targets so that's a scorecard the visual representation of these measures is what we call a dashboard so just making sure we're clear about the tools in the balanced scorecard we have strategy maps we have scorecards and we have dashboards which are the visual representation of your measures and targets so with that that's your balanced scorecard fundamentals