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This post is about using shareholder return or shareholder value statements at the top of a strategy map or balanced scorecard. Rather than linking their financial objectives to profitability, some organisations put shareholder value or shareholder return at the top of their financial perspective. Shareholder return consists of the increase in both the value of [...] This post is about the structure of strategy maps and in particular the financial perspective and objectives. Occasionally I meet someone from finance who wants to put the financial perspective at the bottom. Sometimes they want an additional financial perspective; sometimes it replaces the one at the top. Their argument is that it is the [...] So often I come across “balanced scorecards” that have re-named the learning and growth perspective as “people” or “employees”. They think it is more representative. However the original name was given for a reason. There are three good reasons for keeping the name “Learning and growth”. First, names such as “employees” or “people” or “culture” [...] A recent forum posting asked “What is the correct balanced of measures across the four perspectives of a balanced scorecard?” They wanted to see if any academics had researched whether it should be 25% each or some other ratio. This is a massively mistaken question which goes straight to the heart of why many balanced [...] A tragic story of targets and “Incentives” When explaining how poor targets and measures destroy common sense, I often cite the case of Accident and Emergency (A&E) times in UK NHS hospitals. The government (through the Department of Health & Social Services DHSS) were concerned that patients were having long waits within A&E. So, to [...] I saw a question on cascading balanced scorecards recently and here was my reply Here are some simple rules that I employed when I worked with Norton & Kaplan and have applied since 1) Cascade objectives rather than measures. While some measures cascade many do not naturally translate across organisational boundaries or down through the [...] Eight ways your balanced scorecard should be helping you in the economic climate (Part 2) This article provides four more ways that a good balanced scorecard should be helping you. It also includes a check list you can action immediately. In the last article I explained four ways in which your balanced scorecard should be [...] How your balanced scorecard should be helping you in this economic climate (part 1) The current environment is an excellent test of your balanced scorecard. Does it still serve you well as the economy changes, with credit tightening, interest rate and exchange rate changes, with concerns over governance (just ask a banker), as you need [...] Balanced scorecards need a strategy map to orientate them towards the strategy. Strategy maps need a tangible future to describe the future that the strategy will deliver in a way that is tangible and clear.
Strategy is fundamentally how you move towards your future: What choices do we make to achieve our ambitions? [...] Strategy is about change and improvement, so Strategy maps have to reflect that change and balanced scorecards have to be able to track that change to manage performance. Modern, third and fourth generation, balanced scorecards have strategy maps. These contain the objectives from which balanced scorecards can develop their measures, targets, actions, responsibilities. Strategy is [...] |
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