Balanced Scorecard Strategy For Dummies®

Book description

A practical, easy-to-understand guide to Balanced Scorecard for busy business leaders

The Balanced Scorecard method is an analysis technique designed to translate an organization's mission and vision statement and overall business strategies into specific, quantifiable goals, and to monitor the organization's performance in achieving these goals. Much less technology driven then other analysis approaches, it analyzes an organization's overall performance in four regards: financial analysis, customer service, productivity and internal analysis, and employee growth and satisfaction. Balanced Scorecard Strategy For Dummies breaks down the basics of Balanced Scorecard in simple language with practical, Dummies-style guidance on getting it done. This book covers all the basics of Balanced Scorecard for busy executives and managers-and does it without the high price tag of most professional level Balanced Scorecard guides.

Table of contents

  1. Copyright
    1. Dedication
  2. About the Author
  3. Authors’ Acknowledgments
  4. Introduction
    1. About This Book
    2. Conventions Used in This Book
    3. What You’re Not to Read
    4. Foolish Assumptions
    5. How This Book Is Organized
      1. Part I: The ABC’s of Balanced Scorecard
      2. Part II: The Customer — The Critical Leg
      3. Part III: Financial Measurement — The Foundation Leg
      4. Part IV: Internal Business Processes — The Value Creation Leg
      5. Part V: Knowledge, Education, and Growth — the Learning Leg
      6. Part VI: The Part of Tens
    6. Icons Used in This Book
    7. Where to Go from Here
  5. I. The ABC’s of Balanced Scorecard
    1. 1. Goals, Scores, and the Balanced Scorecard
      1. Getting Familiar with Balanced Scorecard
        1. Just what is Balanced Scorecard, anyway?
        2. Leaning on the four legs of the scorecard
      2. Achieving Organizational Balance
      3. Analyzing Your Customers: Critical Leg
        1. Knowing who you sell to
        2. Focusing on future customers
        3. Considering your internal customers
      4. Following the Money: Foundation Leg
        1. Measuring your financial health
        2. Common mistakes made in finance
      5. Tracking Your Internal Business Processes: Value-Creation Leg
        1. Assessing the current state of your business
        2. Installing effective measures for tracking processes
        3. Anticipating your business’s future state
        4. The top five process-tracking problems
      6. Managing Company-wide Knowledge, Education, and Growth: Learning Leg
        1. Understanding the importance of taking care of your own
        2. Measuring knowledge, education, and growth
        3. Staying on the right course in the fourth leg of the scorecard
      7. Using Dashboards to Apply Balanced Scorecards to Your Business
        1. Market, environmental, and technology considerations for your dashboards
        2. Reviewing strategy, operational, and tactical scorecards and dashboards
    2. 2. Building and Balancing Scorecard Strategies
      1. Understanding How the Four Legs Interact and Link to Strategies
        1. Putting strategies in the driver’s seat
        2. Focusing resources on your strategies
      2. Borrowing from Other Companies’ Success
        1. Translating strategies into operational terms
        2. Aligning your organization to the strategies
        3. Making strategies everyone’s daily job
        4. Turning strategic deployment into a continual process
        5. Mobilizing change through your executive leadership team
      3. Developing Your Strategy Map: A Balancing Act
        1. Doing your mapping homework
        2. Drafting the strategy map
      4. Ensuring a Balanced Scorecard (And What to Do When Yours Isn’t)
      5. Adapting to Changes in Your Markets or Business
        1. Spotlighting external influences and their effect on your business
          1. Financial-leg influences and their effects
          2. Internal-process-leg influences and their effects
          3. Learning-and-growth-leg influences and their effects
        2. Recognizing early warning signals
        3. Balancing in today’s environment — a moving platform
    3. 3. Planning For the Balanced Scorecard
      1. Getting Your Planning in Order
      2. Planning Your Work and Working Your Plan
        1. Planning for the resources you will need
        2. Garnering support from management and others
      3. Building the Foundation and the Structure of a Scorecard
        1. Stacking the building blocks for implementing a scorecard
        2. Adding flexibility so you can adjust a scorecard for effectiveness
        3. Contingency planning methods
      4. Adding the Final Touches
        1. Taking care of the details
        2. Ensuring that your scorecard is fireproof
        3. Performing a final inspection
    4. 4. Putting Your Balanced Scorecard into Action
      1. Deciding When to Launch Your Balanced Scorecard
        1. The Scorecard passed the pilot, and everyone knows it!
        2. The Scorecard is seen as genuinely adding value
      2. Sustaining the Balanced Scorecard
        1. Promoting the scorecard concept
        2. Making scorecard the talk of the town
        3. Cooking up the best time to launch
      3. Mastering the Art of Communicating Your Balanced Scorecards
        1. The view from the top: Senior executives
        2. Surviving scorecards as a middle manager
        3. Spreading the word from the front line
        4. Avoiding communication pitfalls
  6. II. The Customer — The Critical Leg
    1. 5. Understanding Your Role with Customers
      1. Five Things You Must Know about Customers
        1. Not all customers are created equal
        2. Customers can go away
        3. You must master the art of customer service
        4. Customers watch you closely
        5. Do right by your customer
      2. Using Customer Info to Keep Your Customers Happy
        1. Gathering info about your customers’ satisfaction levels
        2. Being proactive to find out what your customers desire
        3. Walking miles (and miles) in your customers’ shoes
        4. Setting customer-based strategic measures
      3. Linking Customer Measures to Your Strategies, Policies, and Plans
        1. Developing customer strategies
        2. Creating customer plans and tactics
        3. Taking action when your customers don’t get what they want
      4. Following Up with Your Customers for Adjustments
    2. 6. Creating a Customer Scorecard
      1. Zeroing In on the Right Customer Measures
        1. Weeding out the wrong measures
        2. Discovering customer measures that matter
        3. Understanding customer loyalty
          1. Asking the right questions
          2. Collecting customer info
        4. Taking customer measurements
          1. Common mistakes made in customer measures
      2. Getting Dependable Data
        1. Hocus, pocus — the focus group
        2. Asking all the wrong questions
        3. Keeping data charts simple
      3. Avoiding Interpretation Pitfalls
        1. Drawing wrong conclusions
        2. Communicating timely with your customers
        3. Reading between the lines
      4. Building the Customer Scorecard
        1. Strategic-level scorecards
        2. Operational-level scorecards
        3. Tactical-level scorecards
      5. Analyzing a Scorecard and Determining a Course of Action
        1. Knowing which way to go
        2. Making sure you stay on course
    3. 7. Building the Customer Leg Dashboard
      1. Customer Dashboard Fundamentals
        1. Dashboard basics
        2. Determining ownership and responsibility
        3. Taking appropriate action: Who, when and how
      2. Building the Customer Dashboard
        1. Keeping-it-simple-style dashboards (KISS)
        2. High-end dashboards with all the fluff
        3. Just-in-time versus just-too-late dashboards
      3. Tracking and Analyzing the Customer Dashboard
        1. Figuring out who needs to know
        2. Updating the customer dashboard
        3. Drilling down to root causes
  7. III. Financial Measurement — The Foundation Leg
    1. 8. Understanding Your Role in Financial Measurement
      1. Five Things You Must Know About Financial Measurement
        1. Your financial measures must be accurate and highly dependable
        2. Your financial measures must truly reflect the value of your business
        3. Your financial measures must cascade easily from top to bottom
        4. Your financial measures must be easy to use and explain
        5. Your financial measures must adhere to current regulatory and tax laws
      2. Finding The Financial Data Gold Mines
        1. Scratching the surface of a goldmine
        2. Knowing your business equals leveraging your financial data
        3. Using key measures to gain a significant competitive edge
        4. Turning difficulties to your advantage
      3. Measuring and Interpreting with Accuracy
        1. Making sure the right people do your measuring
        2. Using consistent and dependable measures
        3. Avoiding measurement pitfalls
      4. Turning Numbers into Information
        1. Examining reporting pitfalls
        2. Showing financial info simply
      5. Linking Financial Measurements To Strategies, Plans And Tactics
        1. Financial measurement is dependant on strategic focus
        2. What you do depends on what you want
        3. Using Failure Mode Effects Analysis (FMEA) to assess risk
    2. 9. Building the Financial Leg Scorecard
      1. Key Aspects of Financial Measures
        1. Focusing on the right things
        2. The WIIFM (What’s in it for me?) station everyone tunes into
        3. Timeliness is your competitive edge
      2. Financial Measures That Matter
        1. Key questions help you see what to measure
        2. Selecting key performance indicators (KPIs)
        3. Tips for finding key measures
        4. How measures differ
          1. For executives and senior managers
          2. For middle and lower managers
          3. For line managers
        5. Ensure competitive success by revisiting measurement
      3. Creating The Financial Scorecard
        1. Select either a strategic, operational, or tactical level
          1. Strategic
          2. Operational
          3. Tactical
        2. Customizing your financial measures, and how to score them
        3. Examining examples
          1. NOW Foods
          2. Vinfen
          3. Defense Financial Accounting Services
        4. A word or two (or three) about information management
      4. Interpreting Financial Measures for Balanced Scorecards
        1. Understanding scorecard financial measures, and what they tell you
        2. Pointing toward additional information and insight
        3. Structures for decision making from scorecard financial measure
          1. Risk analysis
          2. FMEA
      5. Understanding the Essence of Accuracy
        1. Oh no, the numbers are wrong!
        2. The right numbers, the wrong analysis
        3. Tracking the numbers by automatic pilot
    3. 10. Building the Financial Leg Dashboard
      1. The Basics of Financial Dashboards
        1. Determining ownership and responsibility of the financials
        2. An emphasis on real-time measurement and response
        3. Taking appropriate action: Who, when, and how
      2. Creating Financial Dashboards That Have Impact
        1. Keep it simple, complete, and effective!
        2. Types of dashboards
          1. Manual dashboards
          2. Spreadsheet-based financial dashboards
          3. Higher-level programs and software-based financial dashboards
        3. Some examples of dashboards that work!
        4. Enabling response and adjustment agility and flexibility
      3. Avoiding Pitfalls While Designing Dashboards
        1. Selecting the wrong measures
        2. Organizing goals and objectives poorly
        3. Having the wrong number of financial measures
        4. Thinking in the short-term thinking
      4. Understanding Your Financial Dashboard
        1. Make it part of your daily work
        2. So what does it mean, and how will I know what to do next?
        3. Follow through — it’s what’s for breakfast
  8. IV. Internal Business Processes – The Value-Creation Leg
    1. 11. Understanding Your Role in Internal Business Processes
      1. Five Things You Must Know about Internal Business Processes
        1. Waste abounds in your processes
        2. Many process measures don’t link to the customer
        3. Your measurement system is probably broken
        4. Process workers are under-utilized and unappreciated
        5. Technology isn’t always the right answer
      2. Creating Value
        1. Looking at your value streams’ current state
        2. Where you want to be when: The future state
      3. You Get What You Reward
        1. Sending mixed messages
        2. Old rewards do not create new behaviors
        3. Rewards that matter
      4. Building-In Continuous Improvement
        1. Process improvement in a nutshell
        2. Determining, what, when, and where to measure
        3. How to measure your performance
        4. Acceptance and ownership means getting everyone involved
      5. Pitfalls to Continuous Improvement
        1. Implementing continuous improvement
        2. Identifying core processes and outsourcing
        3. Technology isn’t always the answer
      6. The Weakest Links in Internal Business Processes
        1. The problem with integrating strategies, plans, and tactics
        2. Systems thinking and internal business processes
        3. It’s a people thing
      7. Tying Internal Processes to Your Strategies, Plans, and Tactics
        1. Playing catchball: The art and science of deployment
        2. Developing your process strategies, plans, and tactics
    2. 12. Building the Internal Business Process Scorecard
      1. Finding the Right Measures for Internal Business Processes
        1. Identifying the critical few measures
        2. The Input-Process-Output diagram: Your best friend
        3. Waste, scrap, and other bad things
        4. Where’s the variation?
      2. Building Scorecards for Internal Business Processes
        1. Strategic level scorecards
        2. Operational level scorecards
        3. Tactical level scorecards
      3. Making Process Decisions That Give Competitive Advantage
        1. Involving the right people in process decisions
        2. Staying ahead of the competition: Tools that help
        3. Common mistakes made with internal business process scorecards
    3. 13. Building Dashboards for Internal Business Processes
      1. Understanding Internal Business Process Dashboards
        1. The what and why of internal process dashboards
        2. Getting to real-time data and information
        3. Drilling down to get the gold
      2. Creating Your Internal Business Process Dashboards
        1. Who should be involved with your dashboards and how
          1. Strategic dashboards
          2. Operational dashboards
          3. Tactical dashboards
        2. Making sure you’re hitting the right targets
        3. Ten common mistakes with business process dashboards
      3. What Your Internal Business Process Dashboard is Telling You
        1. Analyzing your dashboards
        2. What to do if you’re not getting there
        3. Five common mistakes made in business process dashboard analysis
  9. V. Knowledge, Education, and Growth — The Learning Leg
    1. 14. Understanding Your Role in Learning and Growth
      1. Getting Schooled on Knowledge, Education, and Growth
        1. Putting your finger on the elements of productivity
        2. Understanding how information flows
        3. Examining leadership style and culture
        4. Identifying and filling competency needs
        5. Aligning your employees organization
      2. Have a Clear Direction for the Future
        1. Growing means changing: the concern of complacency
        2. Getting clarity from learning and growth chaos
          1. For strategic interests
          2. For operational interests
          3. For tactical interests
        3. Having a plan for growth and development
      3. Knowing and Understanding Liabilities
        1. Turning liabilities into assets, weaknesses into strengths
        2. The dangers of shortcutting training for growth
      4. Inventorying Knowledge, Skills, and Abilities
        1. Your company’s wish list: Defining what you need
        2. Step away from the office! Getting to know your people
        3. Mind the gaps: Determining knowledge and skill gaps and filling them
      5. Linking Your Strategies, Operations, and Tactics for Learning and Growth
        1. Balancing at the strategic level for organizational knowledge and growth
        2. Having an operational focus for the future
        3. Acting tactically for growth, capability improvement, and retention
    2. 15. Creating the Knowledge, Education, and Growth Scorecard
      1. Finding The Right Measures For Knowledge, Education And Growth
        1. Determine key growth goals for the future
        2. Identifying operational goals, measurements for growth
        3. Indicators at the action level
          1. For development interests (people concerns)
          2. For growth interests (company concerns)
      2. Constructing The Knowledge Management Growth Scorecard
        1. Aligning key growth measurements, for strategies and their impact
        2. Determining the right measures for today and tomorrow
        3. Always reassess and adjust, per market changes as well
        4. Some examples of growth and development scorecards
      3. Determining What Your Scorecard Is Telling You
        1. How to read your future
        2. Adjusting when it’s not what you want
        3. Some mistakes to avoid in interpretation
          1. Managing too close to the data
          2. Misinterpreting the trends
          3. Misunderstanding due to lack of experience
    3. 16. Creating The Knowledge, Education, and Growth Dashboard
      1. Requirements For Knowledge, Education, and Growth Dashboards
        1. Translating growth goals into meaningful daily measures
        2. Selecting key short- and long-term measures
        3. Wait! It’s time to do a sanity check!
      2. Creating Dashboards That Increase Knowledge Management
        1. Formulating the structure of your growth dashboard for action
        2. Setting up feedback systems
        3. Using the dashboard to achieve greater potential
      3. Analyzing Your Knowledge, Education And Growth Dashboard
        1. How to use the growth dashboard to make adjustments to scorecard balance
        2. What your dashboard is telling you as you work toward achieving your future
        3. The importance — and the risks — of being truthful
      4. Understanding the Pitfalls of Analysis
        1. Performance results alone do not a benchmark make
        2. Comparing apples and elephants: best practices where?
        3. Beware of cookbook approaches and case studies
  10. VI. The Part of Tens
    1. 17. Ten Tips for Balanced Scorecard Success
      1. Establish (and Remember) Where Your Company is Headed
      2. Understand and Stay Current with What Your Customers Want
      3. Define Your Scorecard and Dashboard Roles and Responsibilities
      4. Charter Effective Steering Committees
      5. Establish and Maintain Accountability
      6. Link Your Scorecards and Dashboards to Your Strategies, Goals, and Objectives
      7. Communicate Your Personalized Four-Legs Approach to Everyone
      8. Use Feedback and Feed-Forward Loops
      9. Plan and Execute Your Balanced Scorecards Relentlessly
      10. Synergize Your Scorecards for Competitive Advantage and New-Market Entrance
    2. 18. Ten Biggest Scorecard Mistakes to Avoid
      1. Cherry Picking
      2. Following Case Studies Too Closely
      3. Delegating Responsibility without Authority
      4. Ignoring the Soft Stuff
      5. Focusing Too Much on the Tools
      6. Overanalyzing
      7. Not Dealing with Key Detractors
      8. Sending Mixed Messages
      9. Exaggerating the Returns
      10. Ignoring the Customer
    3. 19. Ten Tips for Overcoming Barriers
      1. Empower Your Employees
      2. Be Flexible
      3. Apply Psychology
      4. Identify and Use Influential People
      5. Limit the Use of Force
      6. Don’t Shoot the Messenger; Make Everyone the Messenger
      7. Implement Stage-Gate Reviews
      8. Reward, Recognize, and Celebrate Success
      9. Communicate, Communicate, Communicate (And Don’t Forget to Talk)
      10. Provide Structure for Coaching, Mentoring, and Learning from Mistakes
  11. Balanced Scorecard Strategy For Dummies®
    1. Building the Balanced Scorecard
    2. Top Five Reasons for Using the Balanced Scorecard
    3. Top Five Tips for Balanced Scorecard Success
    4. Top Five Scorecard Analysis Tips
    5. Key Tips for Building Dashboards

Product information

  • Title: Balanced Scorecard Strategy For Dummies®
  • Author(s): Chuck Hannabarger, Rick Buchman, Peter Economy
  • Release date: September 2007
  • Publisher(s): Wiley
  • ISBN: 9780470133972