Feb 2, 2010

Implementation of a Business Scorecard for an SMB

This is a case study of developing a Business Scorecard for a small organization and is a continuation of the previous blog on Balanced Scorecard for SMBs.

I met the CEO of the organization and his core team and gave an orientation about the Balanced Scorecard. I had circulated a questionnaire a few days before the meeting. We had about two hours of discussion about the vision, mission, challenges, strategy, and the goals etc., about the company. We brainstormed about a few initiatives that would help to achieve his goals and objectives. After the meeting, I spent a day or two reflecting on his requirements and designed a Strategy Map and a Scorecard according to the Balanced Scorecard principles. I had one more discussion with my client to refine the Scorecard. We identified the metrics that need to be tracked monthly; it has metrics related to the four perspectives: Financial, Customer, Internal Processes, and Learning & Growth (Capabilities). We also identified and prioritized the initiatives. The key challenge in this project was identifying the critical few measures that must be tracked, especially the non-financial measures.

Now the organization has a one-page document that gives crystal clear clarity on the vision, mission, objectives, goals, strategies, measures and initiatives and also a tracking sheet for tracking the measures monthly. It is true that because of this initiative, the CEO has to spend about half-an-hour weekly tracking his Scorecard (anyway this is a key activity based on the 80/20 rule, where 20% of activities create 80% of the output). Some initiatives have to be completed and a few processes have to be set right before the organization see tangible business benefits from the Scorecard implementation.

What is interesting to note is that it took only a few hours of the CEO’s time and less than a week to create the Business Scorecard. Now he has a one-page scorecard to track what’s all important for him (not just the financial measures). This gives a tool for intensely focussing on his strategies and executing as per his strategy. This eliminates the need to track various Excel files and filters out some measures that need to be tracked only at the next level. This empowers the next level team to act on operational issues with ownership, because they also know the numbers they are accountable for, in the overall business context.

Balanced Scorecard has been used by large organizations for transforming their business. They used to spend millions of dollars and several months/years for implementing Balanced Scorecard. In this context, it comes as a relief that even small organizations can benefit from this methodology with an investment of a few hours and can see results coming out in weeks.

To know how to create a Business Scorecard for your Business or Function, please visit http://www.cxodashboards.com/.

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