Strategic performance management tools-Introduction to balanced scorecard

On the occasion of the anniversary of the founding of the Harvard Business comments, the top 10 most influential management concepts in the past 80 years were selected and ranked second in the balanced scorecard. Currently, the balanced scorecard is a powerful tool for strategic performance management in most of the world's top 500 enterprises.

What is the balanced scorecard? You may be unfamiliar with this term! In fact, it is really around us! At present, the performance management system imported by our Group Company uses the concept of balanced scorecard, but we have never explicitly put forward this concept.

For the Balanced Scorecard, we can express it as follows: the core idea of the balanced scorecard is to show the strategic trajectory of the Organization through the driving causal relationship among finance, customers, internal processes, and learning and development indicators, achieve performance appraisal-Performance Improvement and strategy implementation-Strategic Goal process of strategic correction. It raises the position of performance appraisal to the strategic level of the organization and makes it a tool for implementing the organizational strategy,

First, we need to know what the balanced scorecard is "balanced? It is called the "Balanced Scorecard" mainly because it supplements the "balance" between financial indicators and non-financial indicator assessment methods ", at the same time, it is also the performance appraisal completed between quantitative and qualitative evaluation, between objective and subjective evaluation, between short-term and long-term objectives of the Organization, and between departments of the Organization to seek a "balance ". and strategy implementation process. The following is a brief explanation of the balanced scorecard from four perspectives:

Finance: How do we meet shareholders? The direct purpose and result of enterprise operation are to create value, and profit is always the ultimate goal pursued by the enterprise. Our group's indicators include profit and development costs.

Customer perspective: What do customers think of us? How to provide customers with the products and services they need to meet their needs and improve their competitiveness has become the key to sustainable development. From the perspective of customers, we test the performance of enterprises in terms of quality, performance, and service. Specific indicators include new customer development and customer satisfaction.

Internal Process: What do we have to be good? Whether our enterprise has established appropriate organizational, process, and management mechanisms, and what advantages and disadvantages exist in these aspects. The internal process should begin from the above aspects to develop assessment indicators. Such as technical management and quality management.

Learning and Development: can we continue to improve and create value? Enterprise growth is closely related to the ability and quality of employees and the improvement of enterprise competitiveness. In the long run, enterprises can achieve long-term development only by Continuously learning and innovating. Such as performance management promotion, personnel training, and technical team building.

The causal relationships between these four indicators are as follows: financial indicators are the final pursuit and goal of the enterprise and the fundamental material guarantee of the existence of the enterprise. To improve the profit level of the enterprise, customers must be customer-centric to meet customer needs and improve customer satisfaction. To meet customers, we must strengthen our own construction to improve internal operational efficiency; the premise for improving the internal efficiency of an enterprise is the learning and development of the enterprise and its employees. That is to say, these four aspects constitute a cycle, explaining the four factors that enterprises need to meet in their development from four perspectives, and promoting enterprise development through appropriate management and evaluation. It can be said that they basically include several key factors in the development of general enterprises.

Through the above elaboration, we can find that when enterprises use the Balanced Scorecard idea to develop assessment indicators, they should first determine the company's strategy and objectives, and then determine the measurement indicators. At the same time, when formulating indicators, we should also analyze the causal driving relationship between the four indicators, not just because a certain indicator already exists or is widely used, it should be included in the balanced scorecard, because this indicator is not necessarily in line with the strategic goal of the enterprise.

As a set of Advanced Strategic performance management tools, the balanced scorecard has been widely used in Chinese and foreign enterprise management and has achieved great success. We can foresee that as long as we stick to using this tool carefully, we will surely achieve remarkable results in the near future.