How A Scorecard Forum May Help Your Balanced Scorecard Approach
The balanced scorecard refers to a management approach developed and introduced by Drs. Robert Kaplan and David Norton in the 1990s. Their motivation was to put forth a management system that would be able to use objective information gathered from various sources to make better decisions for the organization. That is, data and observations from various parts and aspects of the organization were going to be used to inform management decisions.
These observations and data are gathered in the context of certain so called metrics. These metrics simply represent standards by which measurements can be made. For example, the gross and net income of a company represents one of the simplest metrics that could be considered. Of course, there are many different possible metrics, with varying levels of relevance, practicality, and usefulness.
Under the balanced scorecard approach, there are four different perspectives that are taken into consideration both individually and together. It is called a balanced approach in reaction to the previous management systems and approaches, which tended to focus too much on the financial and profit aspects of the organization. In this new balanced scorecard approach, Kaplan and Norton hoped to consider the other aspects of organizational performance which they felt were just as important.
Of course, the financial perspective cannot be completely discounted, and is still an important part of the balanced scorecard system. This represents the cash flow in and out of the organization, as well as the allocations for the various operational expenses.
The customer perspective is the second one, and refers to such things as customer satisfaction and customer retention. What is important to work for in this perspective is a solid working relationship with the customers, which would ensure their continuing patronage and cooperation.
The business processes perspective is the third. This looks at those processes specific to the particular business being considered, such as the workings of the manufacturing plants, or even those administrative processes unique to an organization.
Lastly, there is the learning and growth perspective. Here, the ability of the employees and the organization as a whole to learn and adapt is focused on. This ability has become more and more important, as businesses find it necessary to be able to react quickly and efficiently to any changes that may come.
Visiting a scorecard forum could help managers to get input from other practitioners of this particular strategic management approach. A forum provides a venue for asking questions, and getting relevant answers from people who may be more experienced at the balanced scorecard approach. Typical areas of inquiry include metrics and which ones to choose for each perspective, the relationships between perspectives, and of course tips on the actual implementation of the balanced scorecard.
Learning about the balanced scorecard approach may also be facilitated by visiting a scorecard forum. In short, a scorecard forum is a potentially very useful resource for any manager considering trying the balanced scorecard management approach. With proper preparation and implementation, the balanced scorecard approach can make a significant difference in any organization’s performance.