How to Use Balanced Scorecard as a Strategic Management System
The overall performance of an organization can be enhanced massively with the implementation of balanced scorecard. By using balanced scorecard, a manager of a company can be relieved of the pressure of focusing on short-term financial objectives and can pay attention to the long-term goals.
Balanced scorecard enables a company steer through four procedures.
# Materializing the vision – In order to materialize the organizational objectives, it is important to bring all the members of the management in agreement regarding the goals and plans of the organization. In order to fulfill the business goals with utmost efficiency and meticulousness, the entire organization needs to work harmoniously. In most cases, senior executives seem to be at loggerheads when it comes to making a unified decision. It is necessary to make an integrated approach for converting the vision into reality.
# Conversing and connecting – After bringing the senior executives in a consensus, the next thing that a manager needs to do is to convey the strategy to each department of the organization and connect it with the departmental goals. On a general basis, the evaluation of a department is conducted on the basis of its financial performance and incentives and perks are given to the employees after considering their performance in achieving short-term financial objectives. But, the balanced scorecard helps a manager to make sure that each and every level of a firm gains a clear and sound understanding of the long-term plans and also, ensure that the departmental goals are linked to it correctly.
# Assimilating business plans – In this process, the integration of the fiscal plans is the main objective of a company. It is not a common event these days that maximum companies are implementing more than one change management initiatives. The implementation of a wide range of change programs makes it tricky for managers to bring all the programs in one line. The integration of all the initiatives is indispensible to meet the strategic goals of an organization. Here in lies the significance of balanced scorecard. By resorting to the objectives of balanced scorecard procedures in aiding the proper allotment of resources and labeling of priorities, a manager can easily focus on the programs that are helpful in achieving the long-term goals of the organization.
# Gathering response and increasing knowledge base – Strategic learning is necessary for an organization in order to improve and excel and it is not possible if a firm doesn’t collect feedback and learn from the reviews. The traditional procedures of seeking feedback are concerned only with examining whether the departments and the individual employees of a firm have been successful in achieving the targeted financial objectives. When a company uses balanced scorecard as a strategic management procedure, it can keep track of the achievement of the short-term goals from the point of view of a customer, in view of the internal business procedures and in terms of advancement. This helps to amend strategies on the basis of the current performance of all departments and individual employees.
Therefore, it is clear that a company will be able to benefit a lot with the use of balanced scorecard.