Balanced Scorecard (BSC) – Cockpit of your business
“The Balanced Scorecard (BSC) provides managers with the instrumentation they need to navigate to future competitive success.”
― Robert S. Kaplan, The Balanced Scorecard: Translating Strategy into Action
Introduction:
We are all familiar with the maxim – ‘What gets measured, gets done!’. But what should be measured for managing a business effectively. Should one measure profits at the end of a period or should one measure customer satisfaction? Even when profits are being monitored, it is of limited use, if it is a number declared at the end of a period. And entrepreneur would benefit significantly if he/she is provided by a metric(s) which are actionable.
As a driver of any business, an entrepreneur must watch multiple parameters. For example, the entrepreneur must keep a close tab on existing customer orders and concurrently also devote resources for developing new product or service offerings. The entrepreneur must also keep an eye over the operations processes while maintaining the plant and machinery in optimum conditions. And while doing all this, the entrepreneur must ensure that his employees are delivering their best contribution and preparing to learn new skills for future performance. And having done all this the entrepreneur seeks revenue growth and returns better than the cost of capital. Any entrepreneur would wish for a dashboard for managing a business, like the one in an automobile. The BSC is a dashboard and cockpit for managing the business. It presents a curated overview of the health of the business for the entrepreneur and the leadership team.
- If you want to know more then, please open the pdf file.