The Balanced Scorecard - it's simple really!

The Balanced Scorecard is a tool that a business can use to identify improvement areas to achieve its goals. It is usually used to track progress towards strategic goals but can be equally effective in times of crisis to build an action plan to aid recovery.

There are many books on the subject and consultants who will charge extremely large sums to design and implement a scorecard for your company. Yes it makes time to implement because people need to be involved in its development but it needn’t be expensive. The process needs to be driven within the organization with a degree of external support to offer advice and guide progress. So what is a balanced scorecard?

There are 5 areas of the Balanced Scorecard which are usually broken down into a number of objectives – typically 4 or 5 for each area. Each objective will have key performance indicators (KPI’s) and a set of initiatives. The 5 areas are:

• Financial Performance
• Customers & Markets
• Innovation
• Quality
• People

The scorecard is then used to improve strategic and/or crisis management. The scorecard enables organizations to measure performance more effectively and efficiently.

So where do you start. Firstly, the organization needs to be really clear about what it is trying to achieve. What its short and long term goals are. Here are some typical next steps:-

• Develop clear objectives for each of the 5 areas
• Set performance measures and benchmarks
• Prioritise initiatives that have the most impact on the KPI’s
• Develop an internal communications framework to engage staff
• Design reporting template and start using it.

To support the Balanced Scorecard a strategy to engage the workforce to maximise output needs to be implemented. Appoint dedicated resource to drive the cultural change required and find a way of measuring whether the change and communication activities are working.

The implementation of a Balanced Scorecard will be less likely to succeed if not launched in conjunction with a programme of communications to ensure staff are engaged towards the company goals.

So in summary here are my top 7 tips for success:-

• You must have a clear strategy and business goals
• It takes time to implement
• Ensure that the board are engaged
• Keep it simple
• Develop a Company scorecard first before individual operational areas
• Include a strategy for people engagement
• Always ask for help if you need it

Simon Page is Managing Director of Kennington Consulting & Support Services. He spent over 25 years in Automotive and Financial Services companies. The last 22 years he has spent within the Volkswagen Group and has held a number of senior sales, marketing, strategic and corporate development roles. He implemented the Balanced Scorecard within Volkswagen Financial Services. He believes that “people make the difference” and this has enabled him to improve people performance. Change without engaging the people in that process of change will result in a weaker solution and one that will most likely fail. The skills and experience he has built up during his career is now available to businesses of all sizes from his consulting business. He is an experienced practitioner who will add real value to your business.

Phone: +44 1908 210943

Mobile: +44 7817 400762

e-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Website: www.kcss.co.uk