Articles: Blog

Do Balanced scorecards work for small businesses

There was a recent discussion on linkedin where someone suggested that the balanced scorecard was too expensive, complex and too long winded to implement, in small businesses.

I disagree, from a perspective of having designed many for small business and not-for profit organisations

If you take the view, as I do, that a strategy map and balanced scorecard s for a management team: and a set of balanced scorecards is for an organisation, then the size of the organisation you are dealing with does not matter.  What matters is the recognition of the need to describe their strategy, agree it as a team, communicate it to their staff and track its execution.  It is the extended cascade that costs more time.

I have done quite a few strategy maps and balanced scorecards for organisations as small as 5-12 people (and in some cases just 2 people in a start-up) in the not for profit and commercial sector.  Oddly the startegy map is far more valuable than the scorecard because it helps them focus in the strategy and change rather on the operational measures they mainly already have.

I have also had a surprising effect from the facilitation of the process and facilitation of the discussion of the strategy and direction the business is taking: that is it has lead to some partnerships deciding to break up amicably when there were pre-existing differences amongst the directors.  In the three cases this has happened the directors reported afterwards that without the facilitation the break-up would have been acrimonious.  because they understood each others desires and aspirations, there was a better quality of conversation and therefore it lead to an amicable parting of the ways.

Finally on the cost. The way I facilitate them, a management team of a small organisation an get to a strategy map and outline scorecard in a day.  I have done this with a credit union, wine merchant, software house, dot.com start-up, flooring supplier, vehicle dealership, charity and many more.  I do these in a day, or at most 5 days if they want an extended discussion amongst the team.

The practical issue is sales time vs delivery time from a consultancy perspective.  That makes it not very cost effective for the consultant but very fast and effective for the client.

Phil

  1. Veronica KareemVeronica Kareem03-30-2013

    Very good article

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