Balanced Score Card According to Robert Kaplan, Harvard Business School Professor
"good measurements are the organization's important asset" .
When is a measurement good? When it measures what needs tobe measured.
Balanced Scorecard is one such kind of powerful measurement tool for diagnosing the recent past(how we do) and for strategic implementation(Where we go).
It helps managers at all levels monitor results in their key areas A good balanced scorecard tells everyone the company strategy i.e., the balance that exists between outcome measures (financial and customer) and performance drivers (value proposition, internal
processes, learning & growth) .
The key to
effective strategy is efficient implementation. In addition to the key measurements, Kaplan and Norton have recommended broadening the scope of the measures to include four areas: financial performance, customer knowledge, internal business processes, learning and growth. This helps the organization to monitor the present performance and to estimate the future performance.
Following are the benefits quoted by kaplan of using BSC
Ø Focusing on few key things which will lead to effective performance
Ø Helping to coordinate corporate programs like quality, re-engineering and customer support initiatives
Ø Breaking strategic measures at all levels to help the unit manager, operators and employees to find what is required at their level to excel in performance.
Barriers to Success
1. Leadership must exist form the top. i.e the senior management must create the climate for change 2. Strategy should me made everyones job. i.e., effective communication to make everyone knows and understands what is happening in the organizatins.
3. Unlocking and focussing hidden assets i.e., reengineering the work processes to make the best of people's energies, talents and trainings. 4. Making strategy a continuos process- i.e enouraging continuous learnings. Mistakes are identified and learned from. It is vital ot organizational life
Thus Balanced scorecard serves as a tool that assures achievement of the organizations strategy on a continuous basis. Six sigma combined with BSC is the best way to reach and sustain a new level of organization excellence