The Balanced Scorecard…does it have a place in today’s business model

A key point that is underscored in the Japanese TQM or Kaizen model of Change Management is the need to ensure that the Scorecard also measures Business and Financial results based on a Competitive Benchmarking approach.

Here is a rather simplified summary:
1. What is the Q: The quality of the competitor – what is their error rate and the percent of rework required before acceptable Quality is achieved.
2. What is the C: The Cost the competitor incurs to perform the same process
3. What is the D: Delivery time taken for ‘On Time and In Full’ delivery (OTIF index)

I have learned since, that any Balanced Scorecard that does not factor in the Benchmarking QCD factors above – is not worth the paper it is printed on.

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As I have always stated – most of the management ‘discoveries’ (Like the Balanced Scorecard) have already happened…we keep re-bottling them in new bottles. The Japanese TQM movements initiated after WW2 have several practices that foreshadowed the Balanced Scorecard. Consider the Hoshin Kanri or full policy deployment programs that basically looked at a process that would percolate the Organizations Vision, Mission and Strategy down to the middle management planning, and right down to the worker level implementation…with measurements and metrics as part of a PDCA loop. America had more than 70% of the world’s export market – but simply because the rest of Europe and the East were struggling to rebuild after the war. read up on  W Edwards Deming, Joseph M. Juran and many great Japanese TQM luminaries like Shigeo Shingo, Taiichi Ohno, Masaaki Imai, Kauro Ishikawa et al who led the charge for TQM. The rest is history.

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Regarding the Balanced scorecard, it is not new nor can it be simply dismissed as not applicable to our business environment. Drs. Kaplan and Norton were onto something way back in the early 90’s and their initial hypothesis stands today. The BSC is still widely deployed across top fortune 500 companies and finds a place in the management system of organizations in the NA, Europe, East and Far East to date.  It focuses on driving the 4 elements of Organizational learning and growth, Process, Customer and Financial performance – and developing Organization Objectives, Strategy, Measurements and  Initiatives thereof.

With the advent of Big Data and Analytics, it has the potential to become a much more powerful business management system that can render otherwise vast, complex tracts of indecipherable Information into business decision data.

When you really think about it, in business, any business…what gets measured gets done!

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