Balanced Scorecard: Measures that Drive Performance

1
Balanced Scorecard Measures that Drive
Performance

• No single measure can focus attention on the
  critical areas of a business
• Managers need a balanced representation of
  operational and financial measures
• Traditional financial measures tell the results
  of actions already taken
• Answers the question How DID we do?

2

• Operational measures
• Drivers of future financial performance
• Answer the question How WILL we do?

3
Balanced scorecard includes both financial and
operational measures

• 4 main perspectives
• Financial Perspective (financial)
• How do we look to shareholders?
• Customer perspective (operational)
• How do customers see us?
• Internal business perspective (operational)
• Are we improving our current business
  processes?
• Innovation perspective (operational)
• How are we doing at developing new products?

4
Financial Perspective

• GOALS
• Succeed
• Survival

• MEASURES
• Sales growth / earnings growth / return on equity
• Cash flow

5
Customer Perspective

• GOALS
• Satisfaction
• Timely delivery
• Timely service

• MEASURES
• Competitive rank
• On time
• Response to service calls

6
Internal Business Perspective

• GOALS
• Quality
• Speed

• MEASURES
• Reject rates
• Time to complete

7
Innovation Perspective

• GOALS
• New products
• Technology leader
• Time to market

• MEASURES
• of sales from new products
• Time to develop new products
• New product introduction versus competition