Balanced Scorecard

This technique focuses on aligning financial imperatives with internal business processes. These elements are influenced by learning and growth and customer knowledge.

		Top-Down FINANCIAL PERFORMANCE
Outside-In CUSTOMER KNOWLEDGE		OBJECTIVES MEASURES TARGETS ACTIONS		Inside-Out LEARNING & GROWTH
		Bottom-Up BUSINESS PROCESSES

It is designed to be simple enough for everyone in an organisation to understand and see where their personal needs fit into the bigger picture, whether they are managers and staff on the inside or customers and stakeholders on the outside.

A strong emphasis is placed on those who will do the work, engaging employees/partners and customers/citizens in determining the future of the organisation.

A simple way of looking at this process is to identify the organisation's key objectives, the relevant targets to be aimed for and the initiatives or actions designed to deliver them.

You can fill in the blanks for your own service. It will help you think clearly about your strategies, how they link with action on the ground and how to manage them to deilver what's required.

Financial Performance

These measures indicate whether the organisation's strategy and its implementation are contributing to its financial objectives. There will be targets and business ratios against which to keep track of chnages.

Customer Knowledge

The focus here is on different customer groups and market segments and the measures of performance in each. These may include customer satisfaction, accessibility, opinion research results, etc.

Business Processes

These are the internal systems and processes that deliver services to customers and have to meet financial targets. The focus can be on existing processes or new processes. In addition to finance measuers there will probably time, quality and customer value measures as well.

Learning & Growth

This relates to the infrastructure that the organisatin must build to create long-term sustainability and improvement. The focus here is on the productivity of people, systems and procedures. These indicators help to assess the size of the gap between the existing capabilities and future requirements. This usually requires investments in IT systems, skills training, aligning procedures, etc.

Summary

A chain of cause and effect should be evident in all four perspectives. A performance indicator in one area could impact on one in another area. Start working backwards to clarify what measures are dependent on others. This helps you to find those internal processes that are critical to improvement in a number of areas. For example, how could you improve service quality and reduce waiting times ? Skills training ? IT systems investment ? Process mapping ?

A good Balanced Scorecard will have a matrix of outcome measures and their performance drivers (how they will be achieved). You need to know as soon as possible if the interventions you are making are working. .