Introduction
Successful organizations narrow their priorities and use strategic measures to track progress toward strategic objectives. The OUR PRIORITIES section helps your organization do the following:
- Align the day-to-day work that everyone is doing with the vision and strategy of the organization,
- Communicate what they are trying to accomplish,
- Use consistent terminology to describe their strategy so everyone understands,
- Prioritize projects, products, and services, and
- Measure and monitor progress toward strategic targets.
The Balanced Scorecard
The Balanced Scorecard is a strategic planning and management system used extensively in organizations worldwide. It creates a system of linked objectives, measures, targets, and initiatives that collectively describe an organization’s strategy and how that strategy can be achieved. The Balanced Scorecard suggests that an organization should be viewed from at least four perspectives (Financial, Customer, Internal Process, and Learning & Growth), develop metrics, collect data, and analyze it relative to these perspectives.
- Financial Perspective. Timely and accurate financial data is always a top organizational priority. This perspective includes any critical objective related to an organization’s financial health and performance. Revenue and profit are obvious objectives that most organizations list in this perspective. Other financial goals might include cost savings and efficiencies, profit margins, and revenue sources.
- Customer Perspective. Focusing on customers and their satisfaction is critical for every organization. If customers are unsatisfied, they will eventually find other suppliers to meet their needs. In developing metrics for satisfaction, customers should be analyzed in terms of the kinds of customers and the kinds of processes we are providing a product or service to those customer groups. Typical objectives include customer service and satisfaction (e.g., increasing net promoter scores), market share (e.g., growing market share in a segment or country), and brand awareness (e.g., growing interactions on social media).
- Internal Process Perspective. Metrics based on this perspective allow managers to know how well their organization runs and whether its products and services conform to customer requirements (the mission). These metrics must be carefully designed by those who know these processes most intimately. Examples of internal process objectives include process improvements (e.g., streamlining an internal approval process), quality optimization (e.g., reducing manufacturing waste), and capacity utilization (e.g., using technology to boost efficiency).
- Learning & Growth Perspective. This perspective focuses on both individual and organizational self-improvement. In a knowledge-worker organization, people — the only repository of knowledge — are the primary resource. In the current climate of rapid technological change, knowledge workers must be in a continuous learning mode. Metrics can be put into place to guide managers in focusing on training and learning funds to help the most. In any case, learning and growth constitute the essential foundation for the success of any knowledge-worker organization. Examples of these objectives include human capital – skills, talent, and knowledge (e.g., skills assessments, performance management scores, training effectiveness); information capital – databases, information systems, networks, and technology infrastructure (e.g., safety systems, data protection systems, infrastructure investments), and organizational capital – culture, leadership, employee alignment, teamwork and knowledge management (e.g., staff engagement, employee net promoter score, corporate culture audits).
