Using a Business Scorecard to Tell the Story of Your Organization
Storytelling is a useful business tool to communicate, educate, and connect with others in the organization about a specific goal, objective or desired outcome. Building a scorecard with the following 4 core perspectives enhances a team’s ability to communicate a fuller picture of business outcomes and the inputs that impact them.
Scorecards should at a minimum be comprised of metrics in the following perspectives:
1) Customer Satisfaction Perspective: Metrics in this perspective should answer the question, what do our customer think about our performance?
2) Management and Employee Satisfaction Perspective: Metrics in this perspective look at the effective of management process and the satisfaction level that employees have in carrying out the business objectives and goals of the company.
3) Internal Operations and Process Perspective: Metrics in this area answer the question, how well do we do things while carrying out the goals of the organization. Simply stated measures in this area measure efficiency of an organization and serve as indicators for areas which may benefit from process improvements.
4) Financial and Shareholder Perspective: Metrics in this area answer the question, how profitable are we from a longer term, lagging perspective.
Utilizing this approach to scorecard metrics, enhances the value of a scorecard system as a tool to see the full picture of a team and organization’s success.
Measuring Performance: Why Use a Scorecard
“Scorecards make the meaning of success tangible for your organization.”
Scorecards are the performance management tool that compares strategic goals with results. This tool allows management to implement its strategy by aligning performance with goals. Similar to a grade school report card, the scorecard measures periodic results (weekly, monthly, quarterly, annually) against a predetermined goal, allowing users to gauge how their performance stacks up against expectations.
Scorecards drive better performance. The evidence is clear that solid feedback enhances performance—at all levels and across all organizational units. When people and groups throughout an enterprise know how they are doing and what needs improving, they do better.
Scorecards implement strategy. Scorecards translate your strategy into concrete terms and help you track its implementation. Scorecards also reflect operational issues, they are developed in a way that specifically directs attention to your strategy and future direction.
Scorecards help ensure that you have the right measures. A group of measures implemented without a well-thought-out performance model in mind or, worse yet, imposed from the outside, seldom bring new focus or drive desired actions. Effective scorecards are, by nature, consciously and purposefully constructed. In building one, you develop a logical structure that helps everyone know what should be measured, what belongs on the scorecard and what does not belong.
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