Put it-all-together: Business or Balanced Scorecard, KPIs, Strategy Map
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PUTTING IT ALL TOGETHER: A CLEAR VIEW OF THE BALANCED
SCORECARD FRAMEWORK
Based onhttp://www.bscdesigner.com/put-it-all-together.htm
By Aleksey Savkin
BSC DESIGNER
Source: www.bscdesigner.com
"I'd like to learn about the BSC and I want to know where to begin to put it all together."
A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK
BSC DESIGNER
"I'm not able to use a Business Scorecard properly. I'm getting lost in the volume of information."
Source: www.bscdesigner.com
"I'd like to learn about the BSC and I want to know where to begin to put it all together."
A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK
BSC DESIGNER
"I'm not able to use a Business Scorecard properly. I'm getting lost in the volume of information."
"I want to understand the concept itself! "
Source: www.bscdesigner.com
"I'd like to learn about the BSC and I want to know where to begin to put it all together."
A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK
BSC DESIGNER
"I'm not able to use a Business Scorecard properly. I'm getting lost in the volume of information."
"I want to understand the concept itself! "
Source: www.bscdesigner.com
"I'd like to learn about the BSC and I want to know where to begin to put it all together."
"I want to have a clear view of the whole framework, starting from scratch till having an effective strategy map."
A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK
BSC DESIGNER
A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK
• These questions are not a surprise.
BSC DESIGNER
A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK
• These questions are not a surprise.• Any strategy management concept is quite
complex,
BSC DESIGNER
A CLEAR VIEW OF THE BALANCED SCORECARD FRAMEWORK
• These questions are not a surprise.• Any strategy management concept is quite
complex,• And without seeing a big picture, the design
and later implementation cannot be a success.
WHAT IS BALANCED/BUSINESS SCORECARD ALL ABOUT?
BSC DESIGNER
IT IS ALL ABOUT STRATEGY
• When you have a problem, your resources are unlimited and there is no competition, then you can solve it.
BSC DESIGNER
IT IS ALL ABOUT STRATEGY
• When you have a problem, your resources are unlimited and there is no competition, then you can solve it.
• When you have a set of interconnected and your resources are limited, then solving the problem is not that easy.
BSC DESIGNER
The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.
IT IS ALL ABOUT STRATEGY
Source: www.bscdesigner.com
BSC DESIGNER
Come up with ideas that could possibly
work out and solve the problem
Strategy Formulation
The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.
IT IS ALL ABOUT STRATEGY
Source: www.bscdesigner.com
BSC DESIGNER
Describe these ideas in an easy to understand,
and to communicate way
Come up with ideas that could possibly
work out and solve the problem
Strategy Formulation Strategy Description
The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.
IT IS ALL ABOUT STRATEGY
Source: www.bscdesigner.com
BSC DESIGNER
Follow the developed plan and see if it works
Describe these ideas in an easy to understand,
and to communicate way
Come up with ideas that could possibly
work out and solve the problem
Strategy Formulation Strategy Description Strategy Execution
The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.
IT IS ALL ABOUT STRATEGY
Source: www.bscdesigner.com
BSC DESIGNER
Follow the developed plan and see if it works
Describe these ideas in an easy to understand,
and to communicate way
Come up with ideas that could possibly
work out and solve the problem
Strategy Formulation Strategy Description Strategy Execution
Business Scorecard helps to describe the
strategy
Source: www.bscdesigner.com
The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.
IT IS ALL ABOUT STRATEGY
BSC DESIGNER
Follow the developed plan and see if it works
Describe these ideas in an easy to understand,
and to communicate way
Come up with ideas that could possibly
work out and solve the problem
Strategy Formulation Strategy Description Strategy Execution
Business Scorecard helps to describe the
strategy
Generic strategies can help you to come up with some insights
Source: www.bscdesigner.com
The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.
IT IS ALL ABOUT STRATEGY
BSC DESIGNER
Follow the developed plan and see if it works
Describe these ideas in an easy to understand,
and to communicate way
Come up with ideas that could possibly
work out and solve the problem
Strategy Formulation Strategy Description Strategy Execution
Business Scorecard helps to describe the
strategy
Generic strategies can help you to come up with some insights
A well described strategy is much easier
to execute
Source: www.bscdesigner.com
The strategy is an answer to "why?" (the reason of the problem) and "how?" (the solution to the problem) question.
IT IS ALL ABOUT STRATEGY
WHERE TO BEGIN THE BUSINESS SCORECARD PROJECT?
BSC DESIGNER
WHERE TO BEGIN THE BUSINESS SCORECARD PROJECT?
• The biggest problem with all failed scorecard projects is that they are focusing too much on KPIs.
BSC DESIGNER
WHERE TO BEGIN THE BUSINESS SCORECARD PROJECT?
• The biggest problem with all failed scorecard projects is that they are focusing too much on KPIs.
• Once a tremendous amount of time was spend on obtaining required information, and companies failed to make any business use of the scorecard.
BSC DESIGNER
WHERE TO BEGIN THE BUSINESS SCORECARD PROJECT?
• The biggest problem with all failed scorecard projects is that they are focusing too much on KPIs.
• Once a tremendous amount of time was spend on obtaining required information, and companies failed to make any business use of the scorecard.
• The answer to the question: “Where to begin the business scorecard project” is “Start with business context!”
BSC DESIGNER
Source: www.bscdesigner.com
Financial Objectives
Customer Value
A simple cause-and-effect chain to describe the strategy
A SIMPLE DESCRIPTION OF THE STRATEGY
Understand how your top level objectives are linked down to the increase of the customer value.
BSC DESIGNER
Source: www.bscdesigner.com
Financial Objectives
Customer Value
Business Systems
Understand how your top level objectives are linked down to the increase of the customer value.
In its turn, how you are going to provide this customer value using your business systems.
A SIMPLE DESCRIPTION OF THE STRATEGY
A simple cause-and-effect chain to describe the strategy
BSC DESIGNER
Source: www.bscdesigner.com
Financial Objectives
Customer Value
Business Systems
Learning & Growth
Understand how your top level objectives are linked down to the increase of the customer value.
In its turn, how you are going to provide this customer value using your business systems.
What information you need to learn before you are ready to act.
A SIMPLE DESCRIPTION OF THE STRATEGY
A simple cause-and-effect chain to describe the strategy
THE STRATEGY MAP IS NOT THE END OF THE STRATEGY DESCRIPTION PROCESS. ADD SOME KPIS.
BSC DESIGNER
THE SUGGESTED STRATEGY WORKS?
• Having the strategy map is not the end of the process, it’s just the beginning.
BSC DESIGNER
THE SUGGESTED STRATEGY WORKS?
• Having the strategy map is not the end of the process, it’s just the beginning.
• One more thing that we need is to find out in some way if we are on the right track with this strategy or not.
BSC DESIGNER
THE SUGGESTED STRATEGY WORKS?
• How do you know that the suggested strategy works?
BSC DESIGNER
THE SUGGESTED STRATEGY WORKS?
• How do you know that the suggested strategy works?
• The simplest way is to say: if I see growth in my profits, then it works.
BSC DESIGNER
THE SUGGESTED STRATEGY WORKS?
• How do you know that the suggested strategy works?
• The simplest way is to say: if I see growth in my profits, then it works.
• It’s true, but things are not that simple.
BSC DESIGNER
THE GROWTH OF THE PROFITS DEPENDS ON VARIOUS ASPECTS OF THE STRATEGY.
• You might have an excellent idea about increasing customer value,
BSC DESIGNER
THE GROWTH OF THE PROFITS DEPENDS ON VARIOUS ASPECTS OF THE STRATEGY.
• You might have an excellent idea about increasing customer value,
• But one of your business systems was not prepared well for this idea.
BSC DESIGNER
THE GROWTH OF THE PROFITS DEPENDS ON VARIOUS ASPECTS OF THE STRATEGY.
• You might have an excellent idea about increasing customer value,
• But one of your business systems was not prepared well for this idea.
• As result, the strategy failed.
BSC DESIGNER
WHAT WAS THE REASON FOR THE PROBLEM?
• Was the problem with the specific business system that it failed to deliver expected results,
BSC DESIGNER
WHAT WAS THE REASON FOR THE PROBLEM?
• Was the problem with the specific business system that it failed to deliver expected results,
• Or was the problem with incorrect information that was learned about customers’ buying priorities,
BSC DESIGNER
WHAT WAS THE REASON FOR THE PROBLEM?
• Was the problem with the specific business system that it failed to deliver expected results,
• Or was the problem with incorrect information that was learned about customers’ buying priorities,
• Or was there any other reason?
BSC DESIGNER
Source: www.bscdesigner.com
Financial Objectives
We cannot use financial indicators only, as they don’t tell the whole story of what happened and why.
Are we on the right track with the strategy? Use KPIs!
REASON AND SOLUTION?
BSC DESIGNER
Source: www.bscdesigner.com
Financial Objectives
Customer Value
Business Systems
Learning & Growth
We cannot use financial indicators only, as they don’t tell the whole story of what happened and why.
Are we on the right track with the strategy? Use KPIs!
Have proper indicators on each level of the strategy.
REASON AND SOLUTION?
ACTION IS THE MOST IMPORTANT
BSC DESIGNER
ACTION IS THE MOST IMPORTANT
• Don’t forget that by just describing your intentions in a form of strategy nothing will happen.
BSC DESIGNER
ACTION IS THE MOST IMPORTANT
• Don’t forget that by just describing your intentions in a form of strategy nothing will happen.
• You need to follow the strategy map and KPIs with an action plan.
BSC DESIGNER
ACTION IS THE MOST IMPORTANT
• Don’t forget that by just describing your intentions in a form of strategy nothing will happen.
• You need to follow the strategy map and KPIs with an action plan.
• When developing this plan make sure that it is aligned with business objectives and measures that you have found.
FINISHING AN OVERVIEW WITH A GOOD EXAMPLE
BSC DESIGNER
FINISHING AN OVERVIEW WITH A GOOD EXAMPLE
• Let’s take this article and its role in content strategy as an example.
BSC DESIGNER
FINANCIAL PERSPECTIVE
• On the top level there is a typical financial goal to increase profits.
BSC DESIGNER
FINANCIAL PERSPECTIVE
• On the top level there is a typical financial goal to increase profits.
• We can possibly do this in several ways: increase revenue and cut the costs.
BSC DESIGNER
CUSTOMERS PERSPECTIVE
• What’s the value of this article for customers?
BSC DESIGNER
CUSTOMERS PERSPECTIVE
• What’s the value of this article for customers?• On one hand the article answered some
typical questions that we have every day in our ticket system,
BSC DESIGNER
CUSTOMERS PERSPECTIVE
• What’s the value of this article for customers?• On one hand the article answered some
typical questions that we have every day in our ticket system,
• On other hand, it educates our prospects about what can be done about the Balanced Scorecard.
BSC DESIGNER
CUSTOMERS PERSPECTIVE
• In the customers perspective we have these two objectives:
BSC DESIGNER
CUSTOMERS PERSPECTIVE
• In the customers perspective we have these two objectives:
• Attract more prospects interested in the business scorecards
BSC DESIGNER
CUSTOMERS PERSPECTIVE
• In the customers perspective we have these two objectives:
• Attract more prospects interested in the business scorecards
• Cut the costs of providing support by educating existent customers via articles
BSC DESIGNER
HOW ARE WE GOING TO KNOW THAT THIS APPROACH IS WORKING?
BSC DESIGNER
HOW ARE WE GOING TO KNOW THAT THIS APPROACH IS WORKING?
• KPI 1 : The number of sales referred by the article;
BSC DESIGNER
HOW ARE WE GOING TO KNOW THAT THIS APPROACH IS WORKING?
• KPI 1 : The number of sales referred by the article;
• KPI 2: The number of support tickets of a specific type;
BSC DESIGNER
INTERNAL PROCESS PERSPECTIVE
• What business systems do we need to do this?
BSC DESIGNER
INTERNAL PROCESS PERSPECTIVE
• What business systems do we need to do this?• There should be some writing skills and
experience that we can share.
BSC DESIGNER
INTERNAL PROCESS PERSPECTIVE
• What business systems do we need to do this?• There should be some writing skills and
experience that we can share.• It is also important to have a business system
that can track back certain orders and find the original referrer of the customer so that we can find the value of KPI 1.
BSC DESIGNER
INTERNAL PROCESS PERSPECTIVE
• It is important to have a support system where questions are not just answered, but are categorized accordingly to some rules so that we could find out the value of KPI 2.
BSC DESIGNER
INTERNAL PROCESS PERSPECTIVE
• It is important to have a support system where questions are not just answered, but are categorized accordingly to some rules so that we could find out the value of KPI 2.
• And the most important business system is one that will promote a new article to the prospects.
BSC DESIGNER
LEARNING & GROWTH PERSPECTIVE
• What information do we need to have about the customers?
BSC DESIGNER
LEARNING & GROWTH PERSPECTIVE
• What information do we need to have about the customers?
• We need to understand what their problems are, because it makes sense writing about the real world problems, not about invented ones.
BSC DESIGNER
LEARNING & GROWTH PERSPECTIVE
• What information do we need to have about the customers?
• We need to understand what their problems are, because it makes sense writing about the real world problems, not about invented ones.
• It means that we need to focus our learning systems on finding out what challenges our customers face.
BSC DESIGNER
SCORECARD IS FINISHED
• Once we know what customer’s main challenges are, one can write an article.
BSC DESIGNER
SCORECARD IS FINISHED
• Once we know what customer’s main challenges are, one can write an article.
• We will see how many people can find this article with search engines and how many times it was recommended for reading by our support staff.
BSC DESIGNER
SCORECARD IS FINISHED
• In about 2-3 months we will be able to estimate the ultimate impact of this article on the sales and operational costs.
BSC DESIGNER
SCORECARD IS FINISHED
• In about 2-3 months we will be able to estimate the ultimate impact of this article on the sales and operational costs.
• This information can be used then to correct the content strategy if needed.
BSC DESIGNER
An example of the Balanced Scorecard for the Content Marketing Strategy
BSC DESIGNER
MORE ABOUT THE BALANCED SCORECARD
Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com
BSC DESIGNER
BSC DESIGNER
THANK YOU!
Feel free to send us your questions using the contact form at www.bscdesigner.com
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