New to scorecards or looking for a refresher as you get to grips with your business strategy? Never fear – we’re starting 2020 with a ‘back to basics’ refresher on business scorecards, and the Balanced Scorecard methodology.
So grab a leftover mince pie, top up your coffee and let’s get started…
What exactly is a Scorecard in a business scenario?
Less nailbiting than a sports scoreboard in a live match, but no less important, a scorecard presents vital business data in a readable way. Basically, it:
- Groups together a set of business or organisation measures under a meaningful set of headings
- Presents the measures in a way that people can – and will – read easily, and;
- Aids decision-making by providing essential business data in the right format.
So how is the Balanced Scorecard (BSC) different?
It isn’t – but the Balanced Scorecard brings a formalised, robust and recognised structure and methodology to the creation of a scorecard. With this method, businesses present their data under four key areas:
- Internal process
- Organisational capacity
Why these four areas? Because they have a causal inter-relationship. Change capacity to re-engineer a process, that better serves customers, to achieve better financial results!
Is one better than another?
There is no ‘one size fits all’ approach to business strategy or to scorecards, and every business will decide what best suits them.
The case for using the Balanced Scorecard approach
The Balanced Scorecard, often abbreviated to BSC, is a recognised framework used by businesses and organisations across the world to embed and manage their strategy. It guides businesses through each step of the strategic process, by defining and then linking their vision to strategic objectives, targets, initiatives and measures. It also helps to ensure that measures are balanced with the overall health of the organisation in mind. For example, rather than solely focusing on the financials, the BSC approach balances financial measures against broader performance measures and places single measures within the context of related objectives across the organisation.
In this way, it provides a complete management tool for business performance. The beauty of the system is that by assessing measures within the context of the four areas – financial, customer, process and capacity – it is far easier to establish causal relationships between business investment and resource leverage – and the results that these actually achieve.
So is the BSC basically a scorecard?
No – the Balanced Scorecard is a full methodology, and the scorecard is a vital part of it. It forces businesses to think about how they can measure their strategic objectives, and then focuses on measuring only the core projects and initiatives that will achieve these objectives. This avoids wasted focus and time. Most businesses will present their BSC scorecard data in the form of a strategy map, which is an extremely powerful and visual tool. We’ve covered it in more detail here: The Balanced Scorecard
The case for using your own approach
The most important thing of all is to group your company data under headings that are meaningful to your decision-makers and to consolidate / aggregate data so that relationships can be easily seen. If you prefer to use your own approach, then make sure you begin with the right measures; the Key Performance Indicators, or KPIs, that really drill down to the health of the business and the essentials of its performance against the strategy. Many businesses – especially smaller businesses – start with simple dashboards and allow them to evolve with feedback and time. This is a good approach which avoids over-complicating things and taking focus away from the actual data.
How dashboard creation software helps
Whether your business or organisation chooses to adopt the Balanced Scorecard Methodology, to use another recognised approach or to trial a bespoke option according to unique local needs, dashboard creation software can save time, money and stress!
If your business is still attempting to produce monthly management reports using a manual process and a spreadsheet, you will already know that it takes up far too much time, precious resources and energy – and often results in outdated, or worse – inaccurate data. Managers come to dread the process of data submission, verification and creation of the monthly pack, rather than viewing it as something that is vital to their roles and to the organisation’s performance.
A piece of specialist dashboard creation software, such as QuickScore, makes the entire process quick, easy and accurate. Despite its simple interface, the software is extremely powerful and valuable. For example:
- It automatically pulls in the business data that you need to measure, linking with your internal CRM and other designated systems to populate your scorecard with accurate, real-time data
- It makes it quick and easy for your dashboard creator to create rich, intuitive and engaging scorecards using pre-defined and designed templates and widgets. Simply drag and drop your chosen graphical data representations, pick the colours that you want (for example, to apply a Red, Amber, Green visual aid) and add text where required.
- Send a link to the latest scorecard to authorised recipients, with access and editing permissions defined by you within the system. Your management team can interrogate the data, add commentary in a collaborative way and feel ready and informed before they step into that all-important monthly meeting!
Even better, and thanks to the cloud, these systems don’t require time-consuming or expensive rollouts. Simply purchase the subscription licenses that you need for instant access via your business PCs, tablets and smartphones – and enjoy a free trial to test it out for yourself!
Get in touch
The Intrafocus team are here to help with your every strategy need – from hosting strategy setting workshops through to consulting on strategy dashboard creation. Please contact us to discuss your needs. And in the meantime, may we wish you all a Happy New Year and a successful 2020!