What is the balanced scorecard and how will it help grow your business in 2020?
The balanced scorecard is one of the most widely implemented business strategy tools used globally by large organisations, from Volkswagen to Apple.
The balanced scorecard is a strategic planning and management approach that connects the dots between a business’ strategic focus and its day to day operations.
But it’s not just an effective tool for large global organisations. A number of the SMB’s we work with have seen great success with the balanced scorecard because its ultimate goal is simple. It’s about getting everyone in the organisation doing the right things, aligned with the strategy and doing them better every day.
Sometimes it’s difficult to really connect your mission and growth goals to every part of your people and operations. Fact3 have been working with Jon Scopes, a consultant who’s spent the last 25 years successfully enabling SMBs to apply tools like the balanced scorecard to improve strategy implementation and financial results across a wide range of industries.
5 first steps Jon advises companies take to start a balanced scorecard project
Distilling your company’s strategic plans into a small number of critical success factors
Formulating a communication plan to effectively land the company strategy throughout the business and get buy in from the right internal stakeholders.
Implement a system of performance management to track the critical success factors; analyse results and take action to correct poor scores and enhance future outcomes.
Using the outputs of critical success factor tracking to identify early warning signs of future problems, enabling managers to take pre-emptive action before financial results are affected.
Transform management team mindset, not just to focus on early warning signs, but to hone in on every level of success in the organisation, and not only celebrate them but work out how to scale these to be repeatable to maximise the value available from these successes.
Marginal gains theory - how the balanced scorecard impacts business success
Marginal gains theory is a great way to explain exactly how the balanced scorecard impacts your success.
Made famous by Head of British cycling Sir Dave Brailsford, marginal gains theory advocates breaking down every element of success or failure into component parts. By improving performance in each by 1% the collective impact is significant. And that’s exactly how the balanced scorecard process delivers profitable outcomes for your business. By focusing in on the minor elements of success or failure, and managing or scaling each of those appropriately, your business will see an aggregated increase in performance overtime.