Essentials in Building a Scorecard

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Building a scorecard needs decent amount of time and information. Creating a strategic planning and management system to align all organizational activities to the vision and mission of a company has become an essential part of every organization all over the world. Check additional information about building a scorecard.

Before you start on building a scorecard, you have to know first why it is important. The Balanced Scorecard was originally conceptualized by David Norton and Robert Kaplan of the Harvard Business School. They figured that it would be of great support in terms of company development if there will be a tool that can be used in order to demonstrate their progress to the shareholders, customers and the entire organization. In today's business world, the idea that a company's progress is measured through finances has become obsolete.

Other aspects of the organization such as customer and employee satisfaction are now being given enough attention as well, for Norton and Kaplan's basis in building a scorecard is about overall development, not just a certain organization's financial issues. Although financial measures are proven important, it always looks backward, tending companies to have very little visualization about the future. In return, they will be less prepared of the possible conflicts to arrive and ultimately results into downfall.

There are a lot of ways in building a scorecard. Some people choose to hire people to make it for them while others utilize different kinds of softwares. Despite these options, you can also try building a scorecard yourself by following these steps:

1.Using a word-processing program in your computer, open a new document.

2.Create a cover page by putting your company name, address, logo and mission statement.

3.In building a scorecard, don't forget to provide a quick overview of what the report will be about on the cover page.

4.Create a strategy map on the first page of your report. Usually, it is done by writing out your company's strategic goals and mission statement at the center of the page. Label it is "Vision and Strategy".

5.Place four boxes around your company's mission statement and label each one with one of the four headings in which the scorecard will basically revolve: Financials, Growth, Customers and Practices. Remember that in building a scorecard, these four are the main considerations of the report.

6.Make sure that you provide a brief description for each of the four headings about how each is relevant to your company and company goals.

7.Next in building a scorecard is making a "Financial Perspective" page, which should be created on the second page of your report. All information related to the financial status of the company should be included and must be accompanied by graphs, charts, numbers and figures in order to demonstrate each and every financial activity of the organization. Usually, perspectives may take a couple of pages to complete.

8.After the financial information, "Growth" perspective should follow. You must provide specific statistics in order to present employee trainings and developments, recognition or awards and technological advancement.

9."Customers" perspective is the next one. This should provide all the information regarding customer-related issues, even negative and positive testimonials.

10.For the final perspective provide a section that will tackle employee retentions, procedures, policies and quality of service. This will then serve as the "Practices" page.

Before that though, you have to summarize all the results that you have gathered and compare them with the results of previous years. Clearly state what your goals will be for the present or following year and ensure that you are open for questions by securing your contact information in the last page of your report. Once you are done building a scorecard, it is now time for the presentation.

If you are interested in building a scorecard, check this link to find out more about build your own scorecard. Also, you can check other articles in Strategic Planning category.

Balanced Scorecard Toolkit includes step-by-step manuals, documents, presentations, check lists designed to help business professionals with successful development and implementation of Balanced Scorecard. Learn more about BSC Toolkit.