Part 2: Application of the Balanced Scorecard Framework – Theory Meets Practice.

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This is the Part 2 post of the Balanced Scorecard framework. Here, we'll take the principles that were discussed in Part 1, and walk through the steps to apply the Balanced Scorecard framework.

To aid you in this, I encourage snagging a pen and paper to jot down your thoughts that come into your mind at each phase of our application discussion. Doing so will aid you in having a hands-on exercise dealing specifically with how you can use this information in your business, team, or project. So, let's get started on how to easily apply the Balanced Scorecard.

  1. Check yourself before you wreck yourself. Here, you need to make sure you get the gist of the framework . The Balanced Scorecard  is a tool. The purpose is organizing a firm into 4 fundamental balanced scorecardaspects: financial, customer, internal processes, and people. Each of these areas require analysis, planning, and monitoring of activities to fully align and achieve organizational initiatives. This is because if one area is off or lagging, other fundamental areas within the firm will also be off. This requires you to be familiar with the aspects that come into play within each of those areas. This knowledge helps you to identify, analyze, and create specific objectives within each aspect of a firm. Furthermore, the scorecard side of the framework will require you to get SMART (i.e. specific, measurable, attainable, relevant, and time specific). Meaning that whatever ideas that come to mind during this process are simply ideas until you granulate those ideas into purposeful objectives that have targets, measures, initiatives, resources, and by whom to make objectives a reality.
  2. Gather essential data. Planning should not be left to subjective opinions about an organization, situation, or project. There is a time and place for subjective analysis, but for initial analysis the more objective your data is the less emotional barriers within your analysis. You can use primary or secondary data. Primary data is data that is created by you, such as: financial statements, performance evaluations, customer feedback surveys, productivity reports, process analysis flowcharts, and/or other data that reflects your actual firm. Secondary data is data created by someone else outside of your firm. This can include: industry benchmarks, customer feedback surveys, employee surveys completed, and/or other related aspects that could inspire positive change within the 4 aspects of the Balanced Scorecard framework.
  3. Go to Analysis Town on that data. Data means nothing if it isn't reviewed and understood. If you experience anxiety over data because of not knowing what it means, fear not, you can learn. If this is the case, I would encourage reaching out to a professional that can assist you with that learning and application. If this is not the case, and you're confident in your ability to not only analyze, but understand the data is rock solid then it is time to get in the data trenches and come face-to-face with what it means within the context of the 4 fundamental Balanced Scorecards aspects of your firm. Analysis isn't a one shot glance. It requires focus, drive, and stamina to move through the data and really identify the relevancy aspects of it. Doing so, sets the stage for the next step.
  4. Evaluate options and form goal statements. Evaluate your options or alternatives that could shift your current position into a better position. Here, you simply connect the dots from your analysis of data and form firm, specific, measurable, attainable, relevant, and time specific goal statements that fit within the fundamental perspective of the balanced scorecard, i.e financial, customer, internal processes, or people.
  5. Get super specific about your goal statements. I'm hitting home on this aspect again because people tend to loosely identify goals and then loosely work towards them. The Balanced Scorecard is specific. Part of it's framework is granulating goals also known as objectives into specific or better yet, scored platforms. Here, you identify your objective, key performance indicators (i.e. what you're going to measure, how it is measured), target performance (i.e. your performance indicators letting you know whether or not your initiatives are on track or not), your initiatives (i.e. actions to get from point A of your objective to point Z), and in some cases, identifying the people, teams, and resources needed to make this happen. Basically, the  BSC helps you to not only get all of your ducks in row with your data, but to organize all of your objectives, measures, targets, resources, people, and time to get it done. In essence, it may remind you of a GANTT chart used within project management. This is because it is the scorecard side of creating a balanced operational plan that aligns with your organizational objectives and mission.
  6. Rock it out. Seriously, a plan without action is simply an ineffective plan. Take action and make your BSC strategy session “rain”.  By “rain” I am implying rocking out some serious productivity that helps you to nail your objectives and create more more aligned, productive, and innovative firm for you, your employees, customers, and all other stakeholders. For every action, there is a reaction. Let that be a positive one that yields in growth in profits, productivity, joy, and awesomeness for your firm. You must rock it out in order to reap the returns that you so purposefully planned. To do otherwise, would simply be dreaming without doing, and my friend, you're so much better than that.
  7. Have fun. Seriously, have the best time ever carrying out your initiatives. Your energy will help to support you in moving forward, will establish a positive vibe for your employees, and really, makes the whole process of planning, doing, and monitoring that much more engaging. You may even empower others along the way.
  8. Rinse & Repeat. Sounds like the back of shampoo bottle, right?! Perhaps, but the concept is the same. The BSC works best in a proactive firm that not only evaluates data, strategically plans, carries out initiatives, monitors outcomes, but also does so on a consistent basis. This isn't one time fixes everything tool. Quite the contrary.  So, you need to identify the frequency that works best for you and your firm to carry out such sessions proactively. Your bottom-line, business, customers, employees, and stakeholders will thank you.

In conclusion, the Balanced Scorecard is a tool. A tool that is only as effective as the handy-man or handy-woman that uses it. Take the time understand the tool, to feel it, to practice it, to see it in action, to care for it, and to share that tool to help others build and maintain the 4 fundamental perspectives of their business. It's not about the destination of reaching your objectives, but about the journey in which you take to get you to that destination. The Balanced Scorecard can help you along your journey. Enjoy!!!

 

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by Katie Doseck, MBA, Ph.D.

Chief Visionary and Strategic Ace Up Your Sleeve | Viral Solutions LLC

Dr Katie Doseck, MBA, PhD Viral Solutions

Katie Doseck, PhD MBA | Chief Visionary & Strategic Ace Up Your Sleeve. I catapulted my experience with extensive education, trainings, and personal coaching; earning a PhD in Organizational Management with a specialization in Human Resource Management, MBA in Organizational Leadership, and BA in Law & Liberal Arts. Subject Matter Expert (SME) areas: Human Resource Management, Employment Law, Organizational Change, Change Management, Resource Planning, Strategic Planning, Talent Management, Selling & Sales Management, Training & Development, Decision Making Models, Project Management, Customer Relationship Management, and Motivation. Dr. Doseck is based out of Logan, Utah.

 


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