10 reasons why balanced scorecards rock
A balanced scorecard forms part of a performance management system and consolidates key organizational KPI’s. Scorecards traditionally map four areas of business performance
• Financial
• Process
• Customers
• Learning and Growth
Working on the basis that financial measures are not sufficient in their own right to manage a business – scorecards aim to bridge the gap between an organizations strategy and operational performance. More than a jumble of metrics, measures are carefully selected to help define a businesses performance. Scorecards can radically improve the visibility of a businesses execution.
A correctly constructed balanced scorecard can:
1/ Help align strategy with the organization
2/ Drive improvement through highlighting areas of inefficiency and waste
3/ Ensure strategy and decision making are supported with fact
4/ Facilitate the ongoing monitoring of business initiatives.
5/ Link financial results with operational performance
6/ Bring together short and long term objectives
7/ Prioritize issues and associated decision making
8/ Show the relationship between employee performance and business success
9/ Underpins accountability of operational management
10/ Provides feedback to executives that strategy is working
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