With the controversy the balanced scorecard has been receiving, the time has come to go back to the basics. There is a need to keep an eye on balanced scorecard success factors as well.
The balanced scorecard has been subjected to a lot of scrutiny these days and if your company keeps tabs with the latest trends in the field, then you surely must have questioned the efficacy of the tool itself as well. Do not worry or subject yourself into a state of panic right this moment because it is but natural to question the effectiveness of the managerial tools that you are using. Rest assured that the balanced scorecard is still a formidable managerial tool that all companies can use. However, it remains formidable only if you are constantly looking out for ways to improve your tool, to maintain that competitive edge. To do this, not only do you need to keep tabs with prevalent trends, you also need to get in touch with the basics on balanced scorecards as managerial tools. That means that you need to go back to the basics – from performance measurement via the use of relevant KPIs or key performance indicators and right down to benchmarking. All of these comprise balanced scorecard success factors that we need to keep an eye on.
Going back to the basics, remember the adages, “You cannot manage what you cannot measure,” and “Without date, you are just another opinion.”? Yes, these may be clichйs to the many people who are not equipped with the knowledge needed to use balanced scorecards. Still, these are great adages to live by because these are indeed the statements instilled in the core of the development of scorecards in the first place.
To illustrate in laymen’s terms, let us say that you are learning to fly a biplane but you do not have a dashboard in your cockpit. This means that you do not have any gauges to base your flight plan on and you do not have idiot lights either. Sure, you just might be able to lift your biplane off the ground but without the gauges and the needed dials on your dashboard, you might as well kiss your destination goodbye because there is just no way for you to get there on your own. The balanced scorecard is actually your dashboard that contains all the gauges and dials.
For a balanced scorecard to be successful, the tool itself should make use of internal and external benchmarkers as well as make use of the cascading method of setting performance goals. This way, achievements would then be acknowledged and lauded in real time. Also, for the tool to be motivational in nature, data that is both timely and accurate should be provided. Make sure the data is presented in the simplest form possible without jeopardizing or compromising the validity of the measurements being used as well as the ability to trace problems right to their root causes.
So, what then are the keys towards balanced scorecard success factors? First, you should employ a “no status quo” mindset. This means either you win or you lose. Second, you define the key success factors of the company as thoroughly as possible. Third, you determine stretch goals that are both realistic and relevant to the key success factors of the enterprise. Fourth, you implement coaching or training programs to foster education. Education, after all, is a guaranteed pathway towards excellence – provided everything you learn would be applied accordingly though. Lastly, make sure to celebrate the achievement of each goal. Recognition and appreciation are very much needed here.