The Balanced Scorecard provides a powerful structure for creating and communicating organizational strategy. The organization’s strategy is displayed in a Strategy Map which helps managers to visualize, identify, and understand cause-and-effect relationships between different strategic objectives. The Strategy Map ensures that performance outcomes and key drivers of performance are identified to create a complete picture of the strategy. Show
2. Improved Strategy Communication & ExecutionIt is difficult for people to help execute a strategy which they don’t fully understand. Having a one-page picture of your strategy allows you to easily communicate it across the organization. Your visual strategy-on-a-page helps to engage staff and stakeholder buy-in and enables the delivery, execution, review, and course-correction of the strategy. 3. Better Alignment of Projects & InitiativesThe Balanced Scorecard help organizations map their projects and initiatives to different strategic objectives, ensuring that the chosen projects and initiatives are tightly focused on delivering the best strategic results for the organization. 4. More Insightful Management InformationThe Balanced Scorecard approach helps organizations design key performance indicators (KPIs) for their various strategic objectives. This ensures that companies are measuring what actually matters. The BSC approach provides high-quality management information and offers data-driven insight to assist in decision-making. 5. Focused Performance ReportingThe Balanced Scorecard lends itself well to the design of performance reports and dashboards. So, management and Board reporting focuses on the most important strategic issues and helps organizations monitor the execution of their plan. 6. Improved Organizational AlignmentThe Balanced Scorecard enables companies to better align their organizational structure with strategic objectives. In order to execute any plan well, businesses need to ensure that all business units and support functions are working towards the same goals. Cascading the BSC into those business areas will help to achieve that, as well as link strategy to operations. 7. Improved Process AlignmentThe best Balanced Scorecards help align organizational processes—such as budgeting, risk management, and analytics—with strategic priorities to create a truly strategy and data-driven organization. On board with the Balanced Scorecard methodology? Spider Impact strategy management software brings your balanced scorecard to life. It fully automates your BSC with Strategy Maps, interactive reports, and alerts. Plus, it’s the only software recommended by the Balanced Scorecard Institute. Try it for yourself. Click for a free test drive or demo. Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity. He is a best-selling author of 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations. He has over 2 million social media followers, 1 million newsletter subscribers and was ranked by LinkedIn as one of the top 5 business influencers in the world and the No 1 influencer in the UK. Bernard’s latest book is ‘Business Trends in Practice: The 25+ Trends That Are Redefining Organisations’ View Latest Book Follow MeBernard Marr ist ein weltbekannter Futurist, Influencer und Vordenker in den Bereichen Wirtschaft und Technologie mit einer Leidenschaft für den Einsatz von Technologie zum Wohle der Menschheit. Er ist Bestsellerautor von 20 Büchern, schreibt eine regelmäßige Kolumne für Forbes und berät und coacht viele der weltweit bekanntesten Organisationen. Er hat über 2 Millionen Social-Media-Follower, 1 Million Newsletter-Abonnenten und wurde von LinkedIn als einer der Top-5-Business-Influencer der Welt und von Xing als Top Mind 2021 ausgezeichnet. Bernards neueste Bücher sind ‘Künstliche Intelligenz im Unternehmen: Innovative Anwendungen in 50 Erfolgreichen Unternehmen’ View Latest Book Follow Me7 Benefits of a Balanced Scorecard 2 July 2021 Research has shown that organisations that use a Balanced Scorecard approach tend to outperform organisations without a formal approach to strategic performance management. The key benefits of using a BSC include:  1. Better Strategic Planning The Balanced Scorecard provides a powerful framework for building and communicating strategy. The business model is visualised in a Strategy Map which helps managers to think about cause-and-effect relationships between the different strategic objectives. The process of creating a Strategy Map ensures that consensus is reached over a set of interrelated strategic objectives. It means that performance outcomes as well as key enablers or drivers of future performance are identified to create a complete picture of the strategy. 2. Improved Strategy Communication & Execution Having a one-page picture of the strategy allows companies to easily communicate strategy internally and externally. We have known for a long time that a picture is worth a thousand words. This ‘plan on a page’ facilitates the understanding of the strategy and helps to engage staff and external stakeholders in the delivery and review of the strategy. The thing to remember is that it is difficult for people to help execute a strategy which they don’t fully understand. 3. Better Alignment of Projects and Initiatives The Balanced Scorecard help organisations map their projects and initiatives to the different strategic objectives, which in turn ensures that the projects and initiatives are tightly focused on delivering the most strategic objectives. 4. Better Management Information The Balanced Scorecard approach helps organisations design key performance indicators for their various strategic objectives. This ensures that companies are measuring what actually matters. Research shows that companies with a BSC approach tend to report higher quality management information and better decision-making. 5. Improved Performance Reporting The Balanced Scorecard can be used to guide the design of performance reports and dashboards. This ensures that the management reporting focuses on the most important strategic issues and helps companies monitor the execution of their plan. 6. Better Organisational Alignment The Balanced Scorecard enables companies to better align their organisational structure with the strategic objectives. In order to execute a plan well, organisations need to ensure that all business units and support functions are working towards the same goals. Cascading the Balanced Scorecard into those units will help to achieve that and link strategy to operations. 7. Better Process Alignment Well implemented Balanced Scorecards also help to align organisational processes such as budgeting, risk management and analytics with the strategic priorities. This will help to create a truly strategy focused organisation. Where to go from here If you would like to know more about the BSC and similar strategy management tools, check out my articles on:
Or browse the Strategy & Business Performance and Key Performance Indicators & Metrics sections of this site to find more articles and many practical examples.
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How can the balanced scorecard be linked to organizational effectiveness?The balanced scorecard is a strategic planning and performance management framework that tracks financial and non-financial measures to determine an organization's effectiveness and when corrective action is necessary.
How the balanced scorecard aligned performance with organizational goals?Balanced scorecards developed as full strategic planning and management systems do much more than that – they help align an organization behind a shared vision of success, incorporate strategic thinking and focus on results that matter, build employee buy-in to goals, and incorporate transformation goals into the ...
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