Opinions diverge when it comes to Balanced Scorecards (BSC). Some managers cannot do without BSC while others criticize that it only generates data chaos. The main reasons for this are that:
- BSC is often used as a simple system of indicators.
- No measures for target achievements are defined.
- The maxim of “translating strategy into action“ does not receive attention.
Consequently, BSC is misused as a controlling and not as a management tool in the strategy implementation process.
Managing development processes with Balanced Scorecards
If companies avoid that mistake, BSC can be a smart instrument to monitor an organization’s development process – not least because you can examine the degree of target achievement. Furthermore, BSC assures that, apart from financial objectives, non-financial dimensions like customers, processes and employees are taken into consideration and are seen as early indicators for future success. Another benefit: Balancing interrelated goals avoids goal conflicts. Finally, a mutual strategy understanding is fostered.
The benefits of applying and utilizing Balanced Scorecards (BSC):
- Strategy is integrated in employees’ daily business.
- On the company and area level, strategy implementation is connected to objectives.
- Strategic goals in the area of customers, processes and employees are clearly defined and operationalized.
- There is company-wide agreement that each organization that wants to develop in a well-aimed manner requires control.
- Leaders need an instrument to lead and monitor their area of responsibility.
- Clarity prevails in people’s mind concerning strategy. Strategy is understood.
If you wish to learn more about Balanced Scorecards, contact us via e-mail at email@example.com or call +49 (0) 8170 9 22 33.