Kaplan & Norton’s Balanced Scorecard
This is the basis of the Balanced Scorecard designed by Doctors Robert Kaplan and David Norton in the 1990s. The Balanced Scorecard has evolved from its early use as a simple performance management framework into all sorts of flashy dashboards within corporate organisations. For the purpose of small business growth we can stick to the simple model.
Now let’s look at how to use it …
1. The first step is to flesh out your vision with the key strategies for success. You may have used a PESTEL, a SWOT or a Five Forces Analysis to help you with this.
2. Take a look at each of your business strategies and consider “If That, Then What?”
3. What measures work well in each area of the business and what is the knock on effect for the other areas in the business?
4. Next consider what you want each metric to look like and how your staff will benefit from business success.
+ What is the strategy?
+ How does the business measure it?
+ What does the business want to achieve?
+ What incentives does it provide to share in the success?
Creating a Balanced Scorecard has two main benefits. First is a clear communication of the businesses objectives, how they are measured and what the targets are across all areas of the business. Second is that it’s an open and definitive communication tool for remuneration, including measures and incentives.
5. Now consider how you create a strategy map to communicate the benefits of success to all internal stakeholders in your business.
Feel free to request the templates firstname.lastname@example.org
Please share your experiences with this model in the comments below. I am building a portfolio of small business case studies and would love to include examples of what has worked well for you.
PS – If you need further help then give me a call on 07962 626604 to arrange a Skype session with me.