These days, it’s important for organizations to adopt an approach to strategic performance management to optimize business performance across the board. While there are many management methodologies out there, we at Spider Strategies have a soft spot for the Balanced Scorecard (BSC).
If you’re not sure what the BSC methodology is, we have a great article that explains it in simple English. In this article we’re assuming you understand the basics, so let’s talk about the benefits of using a BSC:
1. Better Strategic Planning
The Balanced Scorecard provides a powerful structure for creating and communicating organizational strategy. The organization’s strategy is displayed in a Strategy Map which helps managers to visualize, identify, and understand cause-and-effect relationships between different strategic objectives. The Strategy Map ensures that performance outcomes and key drivers of performance are identified to create a complete picture of the strategy.
2. Improved Strategy Communication & Execution
It is difficult for people to help execute a strategy which they don’t fully understand. Having a one-page picture of your strategy allows you to easily communicate it across the organization. Your visual strategy-on-a-page helps to engage staff and stakeholder buy-in and enables the delivery, execution, review, and course-correction of the strategy.
3. Better Alignment of Projects & Initiatives
The Balanced Scorecard help organizations map their projects and initiatives to different strategic objectives, ensuring that the chosen projects and initiatives are tightly focused on delivering the best strategic results for the organization.
4. More Insightful Management Information
The Balanced Scorecard approach helps organizations design key performance indicators (KPIs) for their various strategic objectives. This ensures that companies are measuring what actually matters. The BSC approach provides high-quality management information and offers data-driven insight to assist in decision-making.
5. Focused Performance Reporting
The Balanced Scorecard lends itself well to the design of performance reports and dashboards. So, management and Board reporting focuses on the most important strategic issues and helps organizations monitor the execution of their plan.
6. Improved Organizational Alignment
The Balanced Scorecard enables companies to better align their organizational structure with strategic objectives. In order to execute any plan well, businesses need to ensure that all business units and support functions are working towards the same goals. Cascading the BSC into those business areas will help to achieve that, as well as link strategy to operations.
7. Improved Process Alignment
The best Balanced Scorecards help align organizational processes—such as budgeting, risk management, and analytics—with strategic priorities to create a truly strategy and data-driven organization.
On board with the Balanced Scorecard methodology? Spider Impact strategy management software brings your balanced scorecard to life. It fully automates your BSC with Strategy Maps, interactive reports, and alerts. Plus, it’s the only software recommended by the Balanced Scorecard Institute. Try it for yourself. Click for a free test drive or demo.