When researching on the internet for a method to measure company or organization performance, the search result might bring you to the site that explained balanced scorecard . The method used by many and the most popular for today generation. Because it completed the old school measurement method.
Things You Should Know on Balanced Scorecard
This method often used to know what the company achievement, either positively or negatively. That way, the higher-ups know what strategic to plan to optimize the company accomplishment. For that reason, here some things to understand about the balanced scorecard method:
There are four perspectives in measuring company performance through this method. By combining the important perspectives in business would yield thorough research about company performance. For that reason, look at the list of those perspectives below:
- Stewardship. This perspective measures financial performance. That’s why it also often called financial perspective.
- Customer and Stakeholder. Since a business couldn’t run without the customer, the company performance also measured from customer perspective. In the bigger company, the organization would also get measured from the stakeholder perspective.
- Internal Process. With this perspective, the company will get measured by the efficiency of the work and quality of the product.
- Learning and Growth. The company as a whole would get measured by this perspective, from the human capital, technology, infrastructure, culture, and others.
2. Who Use This Method
Actually, not only a profit company used this method, because the other institution and foundation based on organization often used this method to know their performance. By using this method, the organization could successfully conduct a measurement of its performance. The reason is that the method utilized various perspectives for more comprehensive result.
3. Balanced Scorecard vs Traditional Measurement
In the most case, people see success from a company by looking at its short term profit. Meanwhile, the balance method also added nonfinancial perspectives to measure success. The method calculates the four mentioned perspectives to achieve the company vision. These methodologies used in this method are strategic objectives, strategy map, performance measure and targets, and cascading.
4. The Methodologies
Just as mentioned in the previous point, the balancing method would utilize four methodologies. The company or organization could use these methodologies to take further action to measure organizational performance. Here are the results from the method:
- Strategic objective. This methodology used the organization vision to make implementable action steps to achieve the organization purpose.
- Strategy mapping. Many said that strategy mapping is the most powerful methodology in this balancing method. The reason is that this methodology would need a visual mapping of the strength in each perspective that would help in achieving the organization vision and purpose. Usually, it showed in graphics to show the connection between the elements.
- Performance measure and targets. Here, each element in the strategy mapping would get measured individually. Then there will be targets identity based on the performance measure result.
- Cascading. This methodology would measure every individual in the organization based on each function. Thus, there would be several tiers based on the standing position of each. For example, the first tier would be the managing directors and then the second tier would be the managers and so on.
5. Development and Automaton Method
With the help of today technology, the company and organization could get up to date result by building a software system. This way, the information regarding the measurement result will come faster, and the personals could be on the move when something goes wrong. And also, there’s a more developed method from using this balance system approach.
Balanced Scorecard Templates
Lastly, to learn more about this method, you should get on the internet and search for an implementation of balanced scorecard PDF. Thus, it can be a secondhand practice and will help to understand this method faster. The reason that what you learn textbook sometime will be different when practicing. And when you’re making for the report, you can use these template below as guidance.Balanced Scorecard