O Balanced Scorecard, Also known as BSC, consists of a method that measures the performance of the company through indicators. It was developed by professors of Harvard Business School and is currently widely used in business management, mainly as a complement to the strategic planning. Its acronym stands for Balanced Performance Indicators.
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What is and how to do strategic planning?
If it was once based only on an evaluation model, today it is used as strategic management for companies and, therefore, is extremely important for its organization. This strategy is linked to four perspectives of the company: financial, customers, internal processes, in addition to learning and growth.
Thus, the administrator must define the control variables (indicators) and goals so that the organization has the expected result over time (performance). In other words, the BSC finds the balance between short- and long-term goals, internal and external objectives that were outlined in strategic planning.
How to do the Balanced Scorecard
The BSC is divided into a few steps, which are:
1 - Strategy and Designed Results
After having in mind all the goals (usually defined in strategic planning) and knowing where you really want to reach each item, it's time to list the indicators and make a projection through the months. These indicators will be divided within the 4 Balanced Scorecard perspectives (Finance, Clients, Internal Processes and Learning and Growth.
In the model below, for example, increasing revenue is measured as gross monthly revenue and should have the values you are looking for over the months. The case of net income follows the same model and are within the main objectives of the Financial Perspective.
As we are talking about a one year planning, the most correct is to define what the results are planned for each of the months. From there, you go month by month completing the data and monitoring whether the results of the BSC are better or worse than planned.
2 - Actual Results and Balanced Scorecard (BSC)
Even if you make good predictions, the reality of your company has a great chance of being quite different from what you projected. So after filling out the actual results for each month you should analyze the overall success rate of your strategy and how each prospect meets. So we can define the difference between reality and the forecast that will be made in the BSC.
Here you come exactly in the stage of the Balanced Scorecard where you can see in your spreadsheet the perspectives and all the indicators to get an idea of what lies ahead.
3 - Strategic Map
After successfully completing all the first steps of the Balanced Scorecard that are more focused on measurement, it is time to see one of the most visually interesting parts of the BSC, the strategic map. In this step you can analyze a summary of your most important strategies and how they are influencing each other.
Here's an example:
In this example, each perspective of the company's BSC has its own strategic objectives, that is, the financial seeks to increase revenues and reduce costs, while internal processes want to increase production capacity.
4 - Graphics Panel
Finally, if you were able to delineate the strategy according to the 4 Balanced Scorecard perspective, it is time to analyze the results in the most visual way possible. This graphics panel is intertwined with the previous numbers and shows the perspective between the real and the designed so that you can better visualize your goals and outline the best results for the management of your company.
See a comparison of planned with the actual result. Note that the realized only goes until a part of the year. This is because in our example we are measuring the results in "real time", ie it is as if we were in the month of June yet.
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