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Welcome to the Momentum Business Coaching
Newsletter for Small Business
August 2004
Is your Business Balanced?
Like many people I love a game of golf (not very good at it
though, my friends will vouch for that), but imagine playing
a round of golf without holes and flags. At what would you aim?
How far would you try and hit the ball and in what direction?
I suppose you could step up to the first tee box, place your
ball on a tee and take a mighty swing. Wherever the ball landed
would be good enough and you could go on to the next hole -
maybe even with a smile on your face. But how do you know if
your game is getting any better? What is the standard?
Flags and the holes in which they are placed provide us with
something to aim at, something on which we can place our attention
and unwavering focus. By aiming at the flag and counting the
strokes to put the ball in the hole, we have a means of judging
our performance against a predetermined standard called a par.
And we love the challenge of attempting to make par.
Like a golf course without flags or holes,
a Business is incomplete without a set of targets to motivate
and achieve above average performance.
So how do you keep track of all these targets
and measurements and still get on with the day job? Answer:
the Balanced Scorecard.
It's balanced because it combines the historical accuracy of
financial information with the operational drivers of future
success, namely, customers, internal processes and employees.
Key questions that should be asked before you build a balanced
Scorecard are:
| 1. |
Do the financial objectives
and measures describe how we will satisfy the expectations
of our business? |
| 2. |
Do customer objectives and
measures reflect the value proposition we will pursue to
achieve our financial goals? |
| 3. |
Have we identified the key
internal processes we must excel at in order to meet customer
and financial expectations? |
| 4. |
Do employee learning and
growth objectives and measures describe the skills that
will enable us to excel at our internal processes? |
So what are the benefits of introducing this system to my
business?
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Able to put measures on all
the key drivers of business for example, instead of saying
we want to be ''best for customer service'' we identify
the key driver to this objective and convert to a more meaningful
measure, for example superior customer service means 95%
of on time delivery to customers. |
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It's more than an ad-hoc
collection of financial and non-financial measures. It tells
the story of the business strategy through a series of cause
and effect linkages. |
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You can develop high level
performance measures and drive them down to lower levels. |
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Employees will have a better
understanding of where the business is going. Motivated
employees with the right mix of skills and tools are the
key ingredients in driving process improvements, meeting
customer expectations and ultimately driving financial returns. |
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Bonuses and incentives can
be based on the results of the scorecard. |
In essence, the balanced scorecard will translate that big,
dust ridden business plan into a one page working document that
can be reviewed on a monthly basis. It will act as a measurement
system, strategic management system and a communication tool
for your employees.
It's a simple yet powerful concept that can
help your business thrive for the long haul.
For a more complete description on ''Balanced Scorecard for
a Small Business'' or a free consultation, simply contact John
Buckley of Momentum Business Coaching at 045-881888 or e-mail
jbuckley@momentumcoach.ie
or visit www.momentumcoach.ie
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