TRANSFORMING CAPABILITY SUPPORT MATERIALS LEADING VISION CREATION Balanced Scorecard Introduction The balanced scorecard can be used for translating a vision or strategy into specific measures and goals. The setting up of the scorecard may take a significant amount of time, to identify and put in place appropriate measures. However, once in place monitoring and measurement should be incorporated into operational tasks rather than be additional activities. A cross functional team should be involved in the initial set up, to ensure a wide spectrum of perspectives and view points. The balanced scorecard is designed to identify objectives, measures, targets and actions relating to four key aspects: Financial; Customer; Internal Business Processes; and Learning and Growth. The Balanced Scorecard emphasises that financial and non-financial measures must be part of the information system for employees at all levels of the organisation. Tangible objectives and measures are derived using a top down process, driven by vision and strategy. In this way the Balanced Scorecard can be used to manage as well as measure strategic processes: 1.Clarify and translate vision and strategy 2.Communicate and link strategic objectives and measures 3.Plan, set targets, and align strategic initiatives 4.Enhance strategic feedback and learning Further Information Kaplan, R., and Norton, D., (1996), ‘The Balanced Scorecard’, Harvard Business School Press, Boston Instructions The template below may be used to create a Balanced Scorecard or the company’s new vision Key Steps: Identify key objectives based on the organisational vision, for each of the four perspectives Develop realisable measures to evaluate these perspectives, make sure that they provide a balanced picture across all four perspectives Identify goals and targets for each of the measures Develop an action plan to achieve the objectives and targets Continuously review and track performance against the measures Adapted from Kaplan and Norton (1996) Through linking the scorecard measures to the vision and strategy the scorecard itself helps to communicate the vision and create a shared understanding. The scorecard also gives a holistic model of the strategy so that people can see how they can contribute to organisational success. The links between the vision and scorecard is usually via a set of cause and effect relationships. A scorecard should include both outcome measures (ultimate objectives of the strategy) and also performance driver measures (leading indicators, what people should be doing today to create value in the future). The Balanced Scorecard can be used at an organisational (corporate scorecards) and at a business unit level, or at function or departmental level. It is important that the scorecard is utilised effectively once it is created. In order for this to happen the scorecard should be embedded in ongoing management systems such as communications, reward and recognition, and resource allocation.

TRANSFORMING CAPABILITY SUPPORT MATERIALS LEADING VISION CREATION Balanced Scorecard Financial: “To succeed financially, how should we appear to our shareholders?” Objectives Measures Targets Initiatives Internal Business Processes: “To satisfy our shareholders and customers, what business processes must we excel at?” Objectives Measures Targets Initiatives Learning and Growth: “To achieve our vision, how will we sustain our ability to change and improve?” Objectives Measures Targets Initiatives Customer: “To achieve our vision, how should we appear to our customers?” Objectives Measures Targets Initiatives