Balanced Scorecard is a concept created and developed in the 1990s by Robert Kaplan and David Norton with the aim of evaluate performance of a company looking from the perspective of finance, customers, internal processes and growth and learning (people).
For Robert Kaplan, financial metrics were insufficient to measure the performance of companies, they were measurers of past strategies and earnings, and they did not offer indicators for complete strategic management.
Robert Kaplan saw that many companies could make a lot of progress if they improved their relationship with their customers (Customers), deliver your goods on time (Internal processes) and retain good employees by training them to attract more customers (Growth and Learning).
In the short term, companies can improve their finances, but if they don't train their employees, don't take care of their equipment, don't improve their internal processes and don't invest in the customer relationship, they will most likely not have the desired growth and lose competitiveness.
For Jimmy Sigler, through the BSC it is possible to transmit the Strategic objectives across the entire organization vertically and horizontally, producing synergy and a sense of responsibility resulting in action and achievement of objectives and goals.
You financial indicators are fundamental to measure the success of a company, but to be complete, other indicators were added along with the financial:
- Internal processes
- Growth and Learning
The financial indicators measure revenue and productivity. The numbers presented here serve to show the company's economic performance.
Financial objectives must be linked to the company's strategy, showing whether their implementation and execution are contributing to the improvement of the result.
Some examples: Sales growth, product profitability, operating costs, profitability, contribution margin, etc.
This perspective presupposes definitions about the market and the segment in which the company wants to compete, the factors that add real value to the customer must be observed.
Some indicators from this perspective are deadline, product quality, performance of services provided, handling complaints, customer service, market penetration, etc.
Internal Processes Perspective
From this perspective, critical processes are identified for the achievement of the shareholders' objectives, these processes must have conditions for the company to generate value to the customer capable of attracting and retaining them in the segment in which it operates. This vision allows managers to identify new ways to improve performance.
For example: achieving excellence in services, reducing operating cost and consequently the cost of the product, alternatives for interacting with customers, etc.
Growth and Learning Perspective
This perspective is related to the development of objectives and measures to guide organizational learning and growth. It is the point at which the company must identify which structure should be adopted, in order to grow and develop in the long term. The organization's qualification will take place through investment in new equipment, in research and development of new products, in systems and in human resources.
For example; reduce employee turnover, obtain 90% of internal satisfaction, increase employee training, increase employee commitment to the company's mission, use of new technologies for processes, conduct product research, etc.
The indicators are observed and the goals established in the Strategic objectives of the organization.
Case Performance Prism Modal Shift
In the example below, we see the BSC methodology applied in order to propose indicators that can be used in the contracting of a freight rail transport service in the complementary execution of logistics services, with a view to developing multimodality in private management. See the complete work on here.
We see the BSC scheme and its application with the goals, actions and measures to be carried out.
The scheme above uses the method PDCA (Plan, Do, Check, Action – Plan, Execute, Check and Act). PDCA is a monitoring tool proposed by Walter Shewhart and popularized by Edwards Deming. This tool presents an efficient way to implement projects, including Management and Marketing.
Strategic Goal: Return on Assets
|To drive||Revenue Mix Growths|
|To control||Risks and Cash Flows|
|Act||Use of Assets|
Strategic Goal: Clients satisfaction
|To drive||To conquer|
Strategic Goal: Modal Shift Development
Growth and Learning
Strategic Goal: Organizational Culture, Retention
|to plan||Indicators and Training|
|To drive||Promotion and Intellectual Capital|
|To control||Organizational Procedures|
Video that explains the BSC in a practical way
With information from:
BALANCED SCORECARD - UNDER THE FOUR PERSPECTIVES
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