Ted Jackson, founder of Clearpoint Strategy, explains the balanced scorecard framework and how organizations use it to track and manage strategy across multiple performance dimensions.
So you're trying to learn about the balanced scorecard. You've come to the right spot. So I'm Ted Jackson. I'm one of the founders here at Clearpoint Strategy. We've been running for more than 10 years. And for 10 years prior to that, I worked with Drs. Norton and Kaplan, the creators of the balanced scorecard concept. So I dream in Balanced scorecard. Let's start with a primer for you. The balanced scorecard is a framework for describing, tracking and managing your strategy. What does that mean? You need to start first with strategic goals. What are we trying to accomplish? Then have measures. How do we know we're accomplishing those goals? And then initiatives or projects. What are we doing to improve the performance of our measures so that we can accomplish those goals? It's not rocket science. It's actually pretty easy to do. If you're a for profit organization, start with the financial perspective. These are your lagging indicators. What are we doing? We're trying to achieve profits, right? How are we going to get there? By growing our revenue, managing our cost. What do we do beneath our financial perspective? We're. We're looking at our customers. Are we making our customers happy? How do we make our customers happy? We look in our internal processes. These are the activities that we do. Now we're getting into some leading indicators or leading actions that we're taking in order to get our customers to buy our products in order to achieve those financial results. Now, in order to do those things well, those activities well, we need to make sure we're focusing on our people. Do they have the right skills? Are we working in the right culture? Do we have the right tools to do these internal processes to make our customers happy, to achieve these financial results? So if you've been assigned the balanced scorecard as a task for your organization, don't panic. We have all of the resources for you. But also keep in mind this is not going to be a task that's over in two months. When you build a balanced scorecard for your organization, you need to go back to your organization and confirm that they've committed to changing the way they manage. Because this framework is great at describing your strategy, but it gives you the capability of managing as you move forward. So if you're just getting started with the balanced scorecard, what I would say to focus on is the strategy map. The strategy map is that one page picture of all of your goals. We've got a lot of resources around strategy mapping. They link directly off of this article. And the nice thing is when you build that picture, you can then take it back to your leadership team, walk them through the strategy of your organization or their strategy, and if they can repeat that back to you, then you hit the nail on the head. If not, listen to where they talk about their strategy or your organization's strategy and adjust your strategy map until you get that story correct. When you get that part correct, the measures and the projects that you will link to that strategy map, they will flow in really nicely. We've written this article to help you understand what a balanced scorecard is. You might need to know a little bit of the history to sell it to others in your organization. You can then look at how to build a balanced scorecard. We have lots of resources that link off to this that you can download. A strategy execution toolkit, Balanced Scorecard Support, Excel File, our own software that we make can allow you to manage your organization with the balanced scorecard. All of these should help you through that process of getting to know the balanced scorecard, getting comfortable with using it in your organization. And as always, we're here to help you if you get stuck.
