The Balanced Scorecard concept has several meanings. The original meaning was popularized for the first time in the early `90s, itt had the sense of an approach to generate a performance report, by grouping performance indicators according to perspectives, the most common being: financial, customer, internal processes, learning and growth. Gradually, this management tool has become the basis of a performance management system that uses operational and individual strategic plans, as the basis for communication, monitoring and improving organizational performance.
Organizations decide to use the concept of Balanced Scorecard for different reasons. In most cases, the Balanced Scorecard implementation actions are concerted to implement a new management system, but rather to improve or simplify certain part of the management process. The main reasons that represent the basis for the implementation of the performance management system, based on the Balanced Scorecard in companies, identified by Kaplan and Norton are: clarity and strategic balance, objectives, leadership development, strategic intervention, setting strategic goals, aligning programs and investments or to build a feedback system.
Whatever are the reasons behind it, the implementation of the Balanced Scorecard doesn`t occur instantaneously. The duration for the implementation of a strategic performance management Balanced Scorecard system differs according to the following aspects: organization size and goal of the project, the level of complexity and impact. The implementation program can significantly vary from 2-4 weeks to 3-6 months or even a longer period, for a year, or in some cases even two years.
Do you wish to know why Balanced Scorecard is advantageous? For this question, the following list will help you to find the answer for this question of yours. Here are the main benefits of Balanced Scorecared usage:
• Clarifying strategy;
• Mobilizing the entire organization to strategy implementation;
• Alignment activities at all the levels of the organization: strategic, operational and individual activities;
• Defining the measurement and performance improvement;
• Communication (objectives and results) and creating the consens on the direction of the organization;
• Stimulating engagement and involvement of organizational members.
After figuring out why Balanced Scorecard is profitable, you might want to know how to efficiently use this concept. For this question with multiple answer possibilities, the most common way to use the Balanced Scorecard in the organization where the respondents are part is monitoring the implementation strategy of the organization.
The origins of the Balanced Scorecard concept can be found in several sources.one of the precursors of the concept is “Dashboard”, a management tool introduced in France in 1930, described as a “dashboard” used by managers to guide organizations on their way to fulfilling the vision. Dashboard was a popular tool in France since the beginning to be widely used by a lot of companies. However, due to the limited number of translations in the literature devoted to the concept, Dashboard had a minimal spreading space outside the country.
Did all these real facts helped you to convince yourself about why Balanced Scorecard is important? Notice that this concept can get to be a profitable opportunity for you and your entire business. Make a research to see how other people achieved success by using the concept of Balanced Scorecard!