Get the Big Picture about Balanced Scorecard, its Connections and Roles

Balanced Scorecard can help improve your company’s performance without paralyzing your company’s resources due to unnecessary bureaucracy. To facilitate Balanced Scorecard in boosting your business performance, you first have to understand how the system works from the inside.

The big picture with regard to Balanced Scorecard

Get the big picture about Balanced Scorecard and how to use it. The typical mistake is to think that Balanced Scorecard is about Key Performance Indicators (KPIs) or dashboard. Dashboard and KPIs are part of the Balanced Scorecard, but just having these parts won’t improve your business performance.

The big picture about Balanced Scorecard

Explaining Balanced Scorecard by using an analogy always helps. Our analogy will be a nature walk that you normally take to explore beautiful neighborhoods.

Strategic Planning

The first question you have to answer is, “What are your strategic plans?” or in simple words, “What do you want from your business?” It would be better to begin with the mission and vision of your company. Then involve your team to figure out current business priorities and objectives.

Nature walk analogy: before going out, you define your most important “business” goals, such as “seeing the beautiful waterfall”.

Strategy Map

The next step is to create your strategy map. Key rules about developing strategy maps for Balanced Scorecard:

  • It should be small (ideally only 1 page in length)
  • It should show how you are going to achieve your business goals
  • Critical milestones should be on this strategy map

Strategy Map Examples

Nature walk analogy: its obvious that you should have a map with your goal (waterfall) marked appropriately, along with a few important milestones.

KPIs and Benchmarking

To what extent were your strategic objectives achieved? What is your progress? To answer these questions you will need Key Performance Indicators (KPIs). These measures will help you to understand where you are and if you are on the right track.

It is not sufficient to just have measures, as metrics should be targeted on some specific value. Where do these values come from? You might take it from the experience of your company, or you might use benchmarking values, which analyse industry-standard values for these respective KPIs.

Nature walk analogy: you will need a compass or GPS to control your current position. Note that both, you GPS and your map, already have some scale that will be helpful to you in determining your position.

Action Plan

You have your strategic goals, and you know how to measure your progress with KPIs. Now, what is missing? Correct! In order to change anything, you need to act!

Each KPI and business goal should be aligned with a specific action plan, which should describe in detail what initiatives and activities will help you to changing your current state.

In order to change anything, you need to act!

Nature walk analogy: with only GPS and map, you won’t see much. You need to pack some water and food with you, and you need to start walking.

Ensuring Balanced Scorecard Success

Now you have a good plan to make your Balanced Scorecard project successful:

  1. Start with strategic plan.
  2. Create a strategy map.
  3. Assign KPIs to business objectives from strategy map.
  4. Align business objectives with action plan.

There are two more steps that are not included in the list, but they are crucial to a successful Balanced Scorecard.

  1. Involve your people! From the very beginning, involve people that will work on your strategic objectives, KPIs, initiatives and activities. Most likely, they know more in their specific business area, so collaboration when you define strategic goals, KPIs and a action plan is critical.
  2. Update Balanced Scorecard regularly! Let’s face the problem head on; it is hard to formulate correct business goals and KPIs from scratch. You will make some mistakes, and your business will change. Plan regular updates of your Balanced Scorecard to ensure successful implementation of this powerful business method in your company.

Automation of the Balanced Scorecard

The Balanced Scorecard framework described above is a complex system. One need to have an automation mean that will do the routine job and will allow to focus on what matters. I recommend to use BSC Designer to follow the Balanced Scorecard framework.

Checklist for all of these ideas

All of the discussed ideas about the Balanced Scorecard might sound very complex for now. I suggest for readers to have a look at this checklist that showcases the most important situations with the Balanced Scorecard and gives some ideas about how to manage with them.

Related Articles

Aleksey Savkin is a business performance expert at BSC Designer. His areas of expertise are Balanced Scorecard, KPIs, Business Performance Management. Aleksey is the author of a number of articles and books on Balanced Scorecard.

Posted in Introduction to BSC

What is BSC Designer?

BSC Designer is a strategy execution software available as a cloud-based service and Windows desktop application.

Getting Started with BSC Designer

Try BSC Designer for free

Before buying anything we want our users to be sure about the benefits of BSC Designer for them.

Download BSC Designer

Who uses BSC Designer

According to our users, BSC Designer is easy to install, configure and it helps a lot with Balanced Scorecard, strategy maps, and KPIs.

BSC Designer Customers

Training for the software

To make it easier for the users to get started, we have a lot of free training materials for the software.

Video manuals for BSC Designer

Customer support

Should you have any questions, we are at your disposal.

Pricing and buying

How much does BSC Designer cost? It depends on the configuration that you prefer. Use this price calculator to find out the total cost, get an official quote, and buy the software.

BSC Designer Pricing

What are your current challenges?

We help our users to get started with Balanced Scorecard, strategy maps, and KPIs. Here is a list of frequently asked questions and respective answers to them.

Q: What is the Balanced Scorecard?

Big picture about Balanced Scorecard A: Check out: Get the big picture about Balanced Scorecard article.

Q: I'm looking for a KPIs... how do I find good ones for our business?

How to find a KPI for... A: Check out our recommendations.

Q: Do you have some examples of the Balanced Scorecard?

Examples of Balanced ScorecardA: Sure, we have some here.

Q: Balanced Scorecard is about strategy execution, right? But what is a strategy?

Define strategy, create strategy mapA: Check these articles about strategy definition and creating strategy map.

Q: How do we cascade our top level scorecard throughout the company?

How to cascade a strategy mapA: Do it by business goals, read how.

More questions and answers...

BSC Lessons

Download BSC Designer and we will follow up with you with lessons about the Balanced Scorecard:

BSC Designer experts

Aleksey Savkin Performance Management and Balanced Scorecard

Kazim Ladimeji HR KPIs and Performance Expert

Levi Newman Effective KPIs and social metrics

Oana Boteanu Performance Management

Oleg Tumarkin Business Measurements

Upcoming events and talks

We organize, sponsor, and participate in various events related to the strategy execution.

  • "Building Balanced Scorecard Step by Step." 14 September - 5 October, 2015, online training. Read more...

Drop us a note if you want to meet up at these events.

Online training: Build BSC step by step

The best way to get started with the Balanced Scorecard is to join our online training.

Balanced Scorecard Training Online Strategy map, KPIs, cascading - it might be hard to put it all together. In the online training "Building BSC Step by Step" we explain all the nuances in simple words and help companies to build a prototype of their balanced scorecards.

Find us on Google Plus

Thank you for sharing!

Whether you are looking for a professional Balanced Scorecard software, or just researching information about Balanced Scorecard and business strategies, we recommend you to download and try our BSC Designer software (no credit card is required).

We will follow up with you with lessons about the Balanced Scorecard and will keep you informed about the trending articles on bscdesigner.com

Follow us in Social Media

More in Introduction to BSC
Journey from a Manual Balanced Scorecard Analysis to an Automated Balanced Scorecard Software

The balanced scorecard (BSC) was implemented in the early 1990s, and has been used since as a tool for measuring...

Balanced Scorecard – The Organizational GPS

Gary Cokins, ‘Performance Management’, 2009 – Book Review Gary Cokins, a guru of performance management methodologies, discusses in depth the...

Close