Implementing the Balanced Scorecard

Introduction

• Presenter: Tom from Cascade team.
• Highlighting different implementation methods for the Balanced Scorecard.
• Many traditional implementations are flawed or incomplete.

What is the Balanced Scorecard?

• A well-known strategy framework from the 1980s.
• Four Perspectives:
  1. Financial: Cash flow, revenue, sales performance.
  2. Customer: Customer experience, on-time deliveries, Net Promoter Score.
  3. Internal Business Processes: Internal, not outward-facing processes.
  4. Learning and Growth: Activities improving employee skills and job performance.

Benefits

• Ensures comprehensive strategic focus (customers, employees, financials, processes).
• Not just categorization but a process for achieving financial outcomes.
• Helps deliver a linear process.

Common Challenges & Misconceptions

• Time-consuming to set up.
• Often seen as too rigid or internally focused.
• Effective implementation addresses these issues.
• Traditional diagrams may create misconceptions.

Traditional vs. Improved Implementation

• Traditional Diagram: Just shows four quadrants, often leading to a simple categorization approach.
• Improved Diagram: Shows an order of operations, emphasizing foundational layers leading to financial gains.
  • Order: Learning & Growth -> Internal Processes -> Customer -> Financial.
  • Leading & Lagging Perspectives:
    • Leading: Learning & Growth, Internal Process, Customer.
    • Lagging: Financial (Outcome of other three perspectives).

Practical Implementation

• Start with Learning & Growth, followed by Internal Processes, then Customer, leading to Financial outcomes.
• Invest Strategically: Training employees -> Improved processes -> Better customer experience -> Increased revenue and profit.
• Alternative Goal: Substituting profit with another primary goal for different organizations.

Roadmap & Implementation Tips

• Structured goals create a tangible roadmap.
• Essential for identifying obstacles and prioritizing business activities.
• Implement both in strategic planning and in strategy tracking.

Strategic Planning

• Two methods:
  1. Focus areas aligning with the four perspectives.
  2. Using custom fields for more sophisticated strategic configurations.

Strategy Tracking

• Balanced Scorecard Dashboard:
  • Four perspectives displayed with key activities, objectives, KPIs.
  • Metrics for overall perspective performance.
• Detailed Reports:
  • Using strategic snapshots to track detailed metrics and activities.

Communication & Adoption

• Emphasize the importance of the Balanced Scorecard through effective communication tools.
• Cascade tool available for a tailored strategy environment.
• Open to questions and further assistance via comments, social media, or email.

Conclusion

• A different, more effective way to implement the Balanced Scorecard.
• Invitation for further engagement and questions.