So, in this post, we will be expanding on one of my previous posts on the Balanced Scorecard.
You will remember that there are four scorecards.
What you might not remember is that there are four headings under each scorecards, which help you to correctly frame what you are trying to achieve; they are:
Now these headings are useful because they help you to correctly structure items within the scorecard, instead of leaving it as some abstract, arbitrary vision, with no real way to track its performance. So for example, if you were reviewing a scorecard and adding an objective, you would need the following information:
This is the objective that wants to be achieved by the company, division or person that would be in line with overall company objectives or life plan.
The measurements that would be used to measure the progress of achievement to the new objective.
The targets you want to achieve e.g. +3% within three years. These targets can be either quantitative or qualitative, but must be measurable.
The actions to be initiated to achieve the objectives and related targets.
An example of the above is:
Achieve 5% growth in sales over the next three years
Percentage increase in Turnover
Year 1: 1% Growth in Turnover
Year 2: 2% Growth in Turnover
Year 3: 2% Growth in Turnover
– Conduct market segmentation exercise
– Review and revise Marketing strategy
– Conduct quality questionnaire in to customer satisfaction
– Incorporate appropriate response to questionnaires via training update
– Train all team members on quality customer service
I did start breaking down the relationships between ‘objective’, ‘measures’, ‘targets’ and ‘initiatives’ e.g. how many targets you can have per objective etc, but the simplest way to put is that one objective can have many measures, targets and initiatives that work towards achieving that one objective. Each objective should have it’s own measures, targets and initiatives. You cannot have two or more objectives in one, as each objective requires it’s own measures, targets and initiatives.
What is useful to remember is that despite the Balanced Scorecard being a tool for business, it can also be applied to something in your life, for example, booking that dream holiday to Milton Keynes or Hull in the UK – this could be your objective right? You will then have the measures to measure you’re on track to achieving your holiday, which could be the money in your bank account; targets to meet to make sure you achieve the objective at the right time, which could be something like have £150 in three months and another £200 in the subsequent three months and your initiatives on how you’re going achieve that objective, like cancelling that gym membership 😉 (your welcome).
Hope this was helpful.