Why Balanced Scorecards are the BEST!
I am part of a task force. We are trying to understand our declining customer profitability (and we’d better do it fast or I will have to update my resume). We are trying to gather the information, but with so many data sources, it’s hard to make sense of things. Even where we are able to compile data, we aren’t sure we really understand the source of the problem.
We know that our measurements show poor results but we don’t know how to fix the problem. What if we make the wrong decision and make things worse? If we could see the impact of prospective changes to determine how much or how little to change pricing or processes, we could avoid making changes that will not improve the results.
We got ourselves a great Corporate Performance Management system with balanced scorecard and impact and sensitivity analysis features. We discovered that in some cases we were measuring the wrong things. We are now focused on activities that will result in timely, effective market response and ensure that we can adapt to change. Every employee can establish and align metrics to objectively measure performance and receive alerts to notify them when a threshold has been crossed.
The balanced scorecard provides a dynamic environment where everyone can monitor results and make appropriate changes to strategy, processes, assignments and tasks.
We have insight into the processes and tasks that engender success and those that need adjustment. We improved metrics and key performance indicators and we can clearly see where changes must be made. Our executives can focus on the important performance metrics and drive the business, and the members of our task force can go back to work!