One of the great features of a Balanced Scorecard is its ability to be personalized and adhere to different agencies.
Here's what you need to know about HR knowledge: is the balanced scorecard still relevant?:
- A BSC can provide reminders of what is or isn’t the best strategy for the time.
- Effective use of a BSC ensures management can respond to potential issues before they become a reality and hurt the business.
- A BSC is focused on results and can only be ineffective if all aspects of the company are not involved.
Human Resources have a broad range of tasks they perform to keep a business afloat. Just as any department benefits from the organization of its goals and assignments, HR retains the responsibility of having an advanced method of objective management.
Luckily, Robert Kaplan and David Norton developed the Balanced Scorecard (BSC) three decades ago. Balanced Scorecards were designed to help managers define and track performance that correlates with the business requirements and strategies. Outline these metrics as follows:
- Financial measures
- Customer experience
- Employee performance
- Educational goals
- The overall quality of each category
A BSC is a visual representation of an organization’s strategy, which allows managers to view and focus intently on objectives and timeframes. Over the years, it has become a fundamental part of companies’ frameworks.
Many companies widely use the Balanced Scorecard today—even after over 30 years. Its efficacy still proves to be a valuable tool for all HR and managerial departments to obtain a refined company.
Align the business with its vision
Businesses that use the BSC can easily analyze aspects of the company that are contrary to its visions and mission statements. By visualizing a list of issues from within the company, it becomes a matter of clarifying each downfall to obtain better results.
A company’s BSC, in this aspect, will list the mission statement first. The BSC will outline and define the gist of how to achieve the mission in three or more statments.
If it is the mission of a company to provide ultimate customer satisfaction, they can use their BSC to enforce changes. They’ll be able to notice customer ratings are down and compare this against all the company’s other assets. This helps them get to the bottom of what keeps them from providing their company’s promise.
A company’s BSC, in this aspect, will list the mission statement first. The BSC will outline and define the gist of how to achieve the mission in three or more statements. Under each fundamental facet of realizing the mission statement, there will be quantitative lists of:
- Obtaining defined success
- Categories of finances
- Levels of represented and required education
- Various departments’ inner workings
By being clear about what a company is doing now and what they need to do in the future, the organization will have a better opportunity to redirect its business toward successful ventures.
Execution of a balanced scorecard strategy
Companies using the BSC can track a vast assortment of metrics and measures driven toward success. A multi-faceted company with various divisions, employees, customers, and partners will do well to have this organization in place to plan its strategic methods. In this way, the BSC compiles all of the individualized data together so it can be reviewed in a comprehensive matter. The company can then conquer the issues by reviewing the collected information from top to bottom.
You should phase out inefficient strategies over time. A BSC can provide reminders of what is or isn’t the best strategy for the time. In cases where a previous approach didn’t work, HR will be able to see and understand what went awry and be able to address it and protect the company from these identified mistakes in the future.
If a company is beginning to lose profits, a BSC provides strategies for each department to remedy this downfall. Strategic methods are linked to objectives. These targets are linked to projects needing to be deployed to keep future underperforming sectors from falling through the cracks. When a BSC allows HR to link and compare each necessary strategy change, they can take the crucial steps to redirect attention to the more effective approaches.
Response to changes
Use the BSC to predict future changes and outlooks that a company needs to upgrade. Management can respond to potential issues before they become a reality and hurt the business.
Using a BSC can prevent a domino effect. If a company notices performance is lacking in their employees, it may be time to implement training and educational workshops to get ahead of the potential burnout. When staff is freshly knowledgeable about techniques that help their job performance, it results in:
- Improved employee retention
- Raised customer satisfaction
- Increased profits
A BSC measures how changes can be addressed and keep threats from creating considerable financial, customer-minded, and employee-focused repercussions. Analysis of the entire perspective of the organization helps avoid neglecting areas that need attention now and in the future.
Transparency provided by balanced scorecards
Balanced Scorecards are easy to reproduce and publish for the entire organization to have for reference. This lets the company as a whole understand the direction and strategies for the path they’re following. It doesn’t just stop at the company, either. These published plans can be advertised to partners, customers, and the community so they know what steps are being taken to perfect this business.
Government agencies created versions of Balanced Scorecards specifically to provide transparency to their citizens. Exxon Mobil practiced using a BSC. This multi-million-dollar company was featured as a case study in “The Strategy-Focused Organization,” a book released by Robert Kaplan and David Norton.
Team members should be able to thoroughly account for their department’s strategies and goals. A BSC demolishes the wall between management and employee and provides an open floor for suggestions, teamwork, and clear communication. This helps team members realize the company’s values and understand their roles better to raise productivity.
Brainstorming about the internal workings and the views of the business will help create a well-rounded framework in a simple form for everyone to follow.
One of the great features of a Balanced Scorecard is its ability to be personalized and adhere to different agencies. A BSC can be considered a gateway to achieving whatever goals companies have in mind for business optimization.
- Customer-forward companies can create a BSC to drive customer satisfaction
- Data-centric companies can generate a BSC to focus on data mining techniques and align with business requirements
A company should ask important questions related to their overall desired accomplishment. They should consider their:
- Leadership and workforce behaviors
The validity of the BSC based on these findings will make sure the framework is operational. Brainstorming about the internal workings and the views of the business will help create a well-rounded framework in a simple form for everyone to follow.
You will typically view classic BSCs as a simple flowchart. However, you can customize the BSC’s graphic formats differently depending on your company’s desires. Therefore, we recommend that each organization customize its version to stay on brand and true to its connection. Balanced Scorecards should be easy to understand, modify, and publicize.
The key to success
While the Balanced Scorecard is an older framework, it is still very relevant and useful. As a matter of fact, it is still one of the highest performing frameworks still in use to this day, having made the list of top 10 most popular tools several years in a row. A BSC provides focused results. Choosing to not involve all areas of the company will render the tool ineffective. Meet the overall objectives through the:
- Application of meaningful measures
- Outline of strategic methods
- Accomplishment of goals
- Alignment and optimization of business missions
The key to success is strategic planning, attention to detail, implementation of changes, and the execution and maintenance of them all.