The Balanced Scorecard

by Unre Visagie

The Balanced Scorecard
Look at the business / career from four important perspectives
Chapter 10
p.6
Balanced Scorecard? I think I’ve heard of it somewhere.
Think of the Balanced Scorecard as the dials and indicators in an airplane cockpit. For the complex task of navigating and flying an airplane, pilots need detailed information about many aspects of the flight, like fuel level, airspeed, altitude, bearing, etc.
Obviously, relying on only one instrument can prove to be fatal… Similarly, the complexity of managing an organization like our company requires that managers be able to view performance in several areas simultaneously.
The balanced scorecard allows managers to look at the business from
four important perspectives.
It provides answers to four basic questions:
How do customers see us? (Customer perspective)
What must we excel at? (Internal perspective)
Can we continue to improve and create value? (Innovation and learning perspective)
How do shareholders view us? (Financial perspective)
Financial Perspective:
How do shareholders
view us?
Investment
Cash flow
Gross margin/
Contribution
Business profits
Budget and profit
forecast reliability
Back order book
Debtor days
Customer
perspective:
Cost/benefit
Customer ranking
Survey
Customer
satisfaction index
Market share
Value added to
customer’s
customer
Internal business
perspective:
Effectiveness
Service
Differentiation
Technology
Capability
Commercial
processes
Team competence
Black
empowerment
Innovation and
learning perspective:
Can we continue to improve and create
Contribution
HR Survey
Contribution per
employee
Continuous
improvement
Skills
development in
products and
Services
Keep in mind that a customer may stop buying from you for other reasons than product, price and service.
How many mistakes can you make on an invoice, or deliver late, before your customer finds another supplier?

Look at the business / career from four important perspectives

Chapter 10 p.6

w&t_question

I Ask

Balanced Scorecard? I think I’ve heard of it somewhere.

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I Answer

Think of the Balanced Scorecard as the dials and indicators in an airplane cockpit. For the complex task of navigating and flying an airplane, pilots need detailed information about many aspects of the flight, like fuel level, airspeed, altitude, bearing, etc.

Obviously, relying on only one instrument can prove to be fatal… Similarly, the complexity of managing an organization like our company requires that managers be able to view performance in several areas simultaneously.

The balanced scorecard allows managers to look at the business from four important perspectives.

It provides answers to four basic questions:

  1. How do customers see us? (Customer perspective)
  2. What must we excel at? (Internal perspective)
  3. Can we continue to improve and create value? (Innovation and learning perspective)
  4. How do shareholders view us? (Financial perspective)

Financial Perspective:

How do shareholders
view us?

  • Investment
  • Cash flow
  • Gross margin/
  • Contribution
  • Business profits
  • Budget and profit
    forecast reliability
  • Back order book
  • Debtor days

Customer
perspective:

  • Cost/benefit
  • Customer ranking
    Survey
  • Customer
    satisfaction index
  • Market share
  • Value added to
    customer’s
    customer

Internal business
perspective:

  • Effectiveness
  • Service
  • Differentiation
  • Technology
  • Capability
  • Commercial
    processes
  • Team competence
  • Black
    empowerment

Innovation and
learning perspective:

Can we continue to improve and create

  • Contribution
  • HR Survey
  • Contribution per
    employee
  • Continuous
    improvement
  • Skills
    development in
    products and
    Services
w&t_binoculars

I Explain

Keep in mind that a customer may stop buying from you for other reasons than product, price and service.

How many mistakes can you make on an invoice, or deliver late, before your customer finds another supplier?

About Unre Visagie
I am a master coach with 30 years of career and business coaching experience. I have built and sold many of my own multi-million dollar companies. I have always built my companies based on the principle of successful people make a successful company. I invest in people. As your coach you get 30 years of experience to help you do the work you love and earn the salary you want.

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