A Guide to Implementing the Balanced Scorecard
Implementing the balanced scorecard can be a delicate process on its own. The important things to remember here are cohesion and communication.
Just how important is preparation when it comes to implementing the balanced scorecard? The answer to this question is VERY IMPORTANT. The balanced scorecard or the BSC, for short, is a managerial tool that is used to measure and ultimately manage the performance levels of all departments and divisions of a certain company or enterprise. Originally, the BSC was actually meant to be used in company activities that were small-scale. With these activities, the BSC was then used to compare these small-scale activities of a certain company with activities of the same company that were large-scaled in nature. This was done to check if activities of both natures that were occurring within the enterprise were still aligned with the company’s objectives, goals, and strategies. Thus, when you are preparing for the implementation of the BSC, there is then the need to understand each and every aspect used and incorporated in this tool.
Four aspects are generally covered by the BSC – finance, customers, internal business processes, and learning and growth. How these four aspects interplay with one another indicate the performance of the company – specifically, whether the company is performing well, well enough, or not at all. This is precisely why “balanced” is used in the term “balanced scorecard”, to connote that there is balance, order, and cohesion across all four aspects of the company.
How successful the implementation of the BSC would be is completely dependent on the strategies employed by members of the upper management team. Whatever the strategies employed, all of them should be effective, stable, and sound. Thus, you can safely say that effective implementation of the BSC starts with effective management.
The implementing body – in this case, the management team – should make sure that the whole procedure is well studied and supported by facts and figures. This might be quite the early stage in terms of implementation but it is still vital to ensure nothing goes wrong here. Do not be conscious of time because there is no time limit here. In fact, the implementing body should take all the time that it needs to ensure everything is in the right place for implementation.
Once initial implementation is underway, we can then start the ball rolling. A plan of implementation should then be created, with all the steps listed down, as well as plausible solutions to whatever problems that may arise along the way. More importantly, the recipients of this implementation process – in this case, the employees – should be well informed of the whole procedure so that no surprises or curveballs would be tossed their way. Definitive and concrete methods of quantifying results when it comes to attaining performance measures for each of the four aspects should also be implemented. The attained measures should then be communicated to all employees to ensure that there is equal treatment in data collection for the sake of evaluation.
Change is inevitable in the office setting but you can never discount the fact that there just may be people who would resist change. This is something you should also be prepared to deal with. This is precisely why open communication is very much needed here. Implementing the balanced scorecard would definitely be made easier if you openly discussed this with members of your workforce in the first place.
