put it-all-together: business or balanced scorecard, kpis, strategy map

PUTTING IT ALL TOGETHER: A CLEAR VIEW OF THE BALANCED

SCORECARD FRAMEWORK

Based onhttp://www.bscdesigner.com/put-it-all-together.htm

By Aleksey Savkin

BSC DESIGNER

Source: www.bscdesigner.com

"I'd like to learn about the BSC and I want to know where to begin to put it all together."

A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK

http://www.bscdesigner.com/


BSC DESIGNER

"I'm not able to use a Business Scorecard properly. I'm getting lost in the volume of information."






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"I want to understand the concept itself! "






BSC DESIGNER


"I want to understand the concept itself! "



"I want to have a clear view of the whole framework, starting from scratch till having an effective strategy map."




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• These questions are not a surprise.



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• These questions are not a surprise.• Any strategy management concept is quite

complex,



BSC DESIGNER


• These questions are not a surprise.• Any strategy management concept is quite

complex,• And without seeing a big picture, the design

and later implementation cannot be a success.



WHAT IS BALANCED/BUSINESS SCORECARD ALL ABOUT?

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IT IS ALL ABOUT STRATEGY

• When you have a problem, your resources are unlimited and there is no competition, then you can solve it.



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• When you have a problem, your resources are unlimited and there is no competition, then you can solve it.

• When you have a set of interconnected and your resources are limited, then solving the problem is not that easy.



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The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.





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Come up with ideas that could possibly

work out and solve the problem

Strategy Formulation






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Describe these ideas in an easy to understand,

and to communicate way



Strategy Formulation Strategy Description






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Follow the developed plan and see if it works





Strategy Formulation Strategy Description Strategy Execution






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Business Scorecard helps to describe the

strategy






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strategy

Generic strategies can help you to come up with some insights






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strategy

Generic strategies can help you to come up with some insights

A well described strategy is much easier

to execute






WHERE TO BEGIN THE BUSINESS SCORECARD PROJECT?

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• The biggest problem with all failed scorecard projects is that they are focusing too much on KPIs.



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• Once a tremendous amount of time was spend on obtaining required information, and companies failed to make any business use of the scorecard.



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• Once a tremendous amount of time was spend on obtaining required information, and companies failed to make any business use of the scorecard.

• The answer to the question: “Where to begin the business scorecard project” is “Start with business context!”



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Financial Objectives

Customer Value

A simple cause-and-effect chain to describe the strategy

A SIMPLE DESCRIPTION OF THE STRATEGY

Understand how your top level objectives are linked down to the increase of the customer value.



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Customer Value

Business Systems


In its turn, how you are going to provide this customer value using your business systems.





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Customer Value

Business Systems

Learning & Growth


In its turn, how you are going to provide this customer value using your business systems.

What information you need to learn before you are ready to act.





THE STRATEGY MAP IS NOT THE END OF THE STRATEGY DESCRIPTION PROCESS. ADD SOME KPIS.

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THE SUGGESTED STRATEGY WORKS?

• Having the strategy map is not the end of the process, it’s just the beginning.



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• Having the strategy map is not the end of the process, it’s just the beginning.

• One more thing that we need is to find out in some way if we are on the right track with this strategy or not.



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• How do you know that the suggested strategy works?



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• The simplest way is to say: if I see growth in my profits, then it works.



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• The simplest way is to say: if I see growth in my profits, then it works.

• It’s true, but things are not that simple.



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THE GROWTH OF THE PROFITS DEPENDS ON VARIOUS ASPECTS OF THE STRATEGY.

• You might have an excellent idea about increasing customer value,



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• But one of your business systems was not prepared well for this idea.



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• But one of your business systems was not prepared well for this idea.

• As result, the strategy failed.



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WHAT WAS THE REASON FOR THE PROBLEM?

• Was the problem with the specific business system that it failed to deliver expected results,



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• Or was the problem with incorrect information that was learned about customers’ buying priorities,



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• Or was the problem with incorrect information that was learned about customers’ buying priorities,

• Or was there any other reason?



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We cannot use financial indicators only, as they don’t tell the whole story of what happened and why.

Are we on the right track with the strategy? Use KPIs!

REASON AND SOLUTION?



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Customer Value

Business Systems

Learning & Growth

We cannot use financial indicators only, as they don’t tell the whole story of what happened and why.

Are we on the right track with the strategy? Use KPIs!

Have proper indicators on each level of the strategy.

REASON AND SOLUTION?



ACTION IS THE MOST IMPORTANT

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• Don’t forget that by just describing your intentions in a form of strategy nothing will happen.



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• You need to follow the strategy map and KPIs with an action plan.



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• You need to follow the strategy map and KPIs with an action plan.

• When developing this plan make sure that it is aligned with business objectives and measures that you have found.



FINISHING AN OVERVIEW WITH A GOOD EXAMPLE

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FINISHING AN OVERVIEW WITH A GOOD EXAMPLE

• Let’s take this article and its role in content strategy as an example.



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FINANCIAL PERSPECTIVE



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• On the top level there is a typical financial goal to increase profits.



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• On the top level there is a typical financial goal to increase profits.

• We can possibly do this in several ways: increase revenue and cut the costs.



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CUSTOMERS PERSPECTIVE



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• What’s the value of this article for customers?



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• What’s the value of this article for customers?• On one hand the article answered some

typical questions that we have every day in our ticket system,



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• What’s the value of this article for customers?• On one hand the article answered some

typical questions that we have every day in our ticket system,

• On other hand, it educates our prospects about what can be done about the Balanced Scorecard.



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• In the customers perspective we have these two objectives:



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• Attract more prospects interested in the business scorecards



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• Attract more prospects interested in the business scorecards

• Cut the costs of providing support by educating existent customers via articles



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HOW ARE WE GOING TO KNOW THAT THIS APPROACH IS WORKING?



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• KPI 1 : The number of sales referred by the article;



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• KPI 1 : The number of sales referred by the article;

• KPI 2: The number of support tickets of a specific type;



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INTERNAL PROCESS PERSPECTIVE



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• What business systems do we need to do this?



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• What business systems do we need to do this?• There should be some writing skills and

experience that we can share.



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• What business systems do we need to do this?• There should be some writing skills and

experience that we can share.• It is also important to have a business system

that can track back certain orders and find the original referrer of the customer so that we can find the value of KPI 1.



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• It is important to have a support system where questions are not just answered, but are categorized accordingly to some rules so that we could find out the value of KPI 2.



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• It is important to have a support system where questions are not just answered, but are categorized accordingly to some rules so that we could find out the value of KPI 2.

• And the most important business system is one that will promote a new article to the prospects.



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LEARNING & GROWTH PERSPECTIVE



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• What information do we need to have about the customers?



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• We need to understand what their problems are, because it makes sense writing about the real world problems, not about invented ones.



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• We need to understand what their problems are, because it makes sense writing about the real world problems, not about invented ones.

• It means that we need to focus our learning systems on finding out what challenges our customers face.



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SCORECARD IS FINISHED

• Once we know what customer’s main challenges are, one can write an article.



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• Once we know what customer’s main challenges are, one can write an article.

• We will see how many people can find this article with search engines and how many times it was recommended for reading by our support staff.



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• In about 2-3 months we will be able to estimate the ultimate impact of this article on the sales and operational costs.



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• In about 2-3 months we will be able to estimate the ultimate impact of this article on the sales and operational costs.

• This information can be used then to correct the content strategy if needed.



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An example of the Balanced Scorecard for the Content Marketing Strategy



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MORE ABOUT THE BALANCED SCORECARD

Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com

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http://www.bscdesigner.com/balanced-scorecard-articles.htm



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THANK YOU!

Feel free to send us your questions using the contact form at www.bscdesigner.com

