strategy toolkit: balanced scorecard

7/25/2019 Strategy Toolkit: Balanced Scorecard

1/6

FREE

eChapter


2/6

Its good toSHARE!

You can use this free eChapter on your

website or in your blog. You can post it

on Facebook, Tweet about it or email it.

The choice is yours and its free to use.

Copyright Pearson Education LTD 2015 (print and electronic)


3/6

Once you have a strategy in place, you will want to know how well

it is doing. You dont want to just measure financial performance.

The financial implications of a strategy are usually not immediate.

There are lots of areas that contribute to the success of a strategy.

How to use

You will never create the perfect balanced scorecard for your

organisation. But you can move strategic focus to a range of

measures that better reflect performance and progress towards

your strategy.

Kaplan and Nortons balanced

scorecard

Kaplan and Nortons balanced scorecard

Source: Adapted from Kaplan, R. S. and Norton, D. P., The balanced scorecard: measures that divide performance,

Harvard Business Review, Harvard Business School Publishing, 2005

Objectives

Measures

Targets

Initiatives

Objectives

Measures

Targets

Initiatives

Objectives

Measures

Targets

Initiatives

Learning?

To achieveour vision,how do wekeep learningand improving?

Financial?

To succeedfinanciallyhow shouldwe appearto ourshareholders?

Objectives

Measures

Targets

Initiatives

Customer?

To achieveour vision,how should

we appearto customers?

Processes?

To achieveour vision,what

processesmust weexcel at?

Vision and

strategy


4/6

The Strategy Booktoolkit202

First, include your vision and strategy. It doesnt have to be final

but it helps to have a sense of what will be measured. Next, con-

sider the business from four perspectives: financial, customer,

processes and learning. What has to happen in all areas if your

organisation is to be successful? How can you measure how well

you are doing?

Dont get obsessed with the measures or the scorecard. Dont waste

excessive amounts of time measuring. It may be enough to have

a rough, opinion-based measure in many areas. The value here is

in making the strategy come to life and giving people a more bal-

anced view of what is important in what they do and achieve.

The CEO of Britvic, UK-based drinks producer and PepsiCo dis-

tributor, adopted the balanced scorecard, because of inconsistent

financial performance.

He made the decision after a coaching workshop with 450 senior

managers reviewed survey and performance data. The employee

survey suggested that leadership was poorly regarded, while

missed targets indicated a lack of accountability.

Leadership ratings didincrease slightly but growth did not. More

processes didnt help company creativity, stop a choking hazard

product recall or save the job of the CEO or chairman when a com-

petitor, AG Barr, attempted a takeover.

It was only when the chairman was fired that he had the time and

space to gain a more strategic view. He was able to see the attrac-

tiveness of investing in dormant brands and global marketing for

global growth. And when rehired, this time as a CEO, he immedi-

ately adopted a growth strategy that has so far worked well par-

ticularly with the launch of Fruit Shoot in India and the USA.

The smart strategist remembers that a balanced view is no substi-

tute for a strategic view of strengths and weaknesses. The secret is

to look for connections between the various measures that pro-

vide insights into threats and seek attractive opportunities.


5/6

Paperback and eBook

available to buy now

Also by

MAX MCKEOWN

@FTPHFT Publishing


6/6

ISBN:9781

292084404

Available to buy NOW fromyour favourite bookshop

facebook.com/FTPublishing @FTPH

strategy toolkit: balanced scorecard

Documents