The main sections of the balanced scorecard. Balanced Scorecard: an assessment tool or a way to implement a strategy? Completeness and availability of information

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Definition of Balanced Scorecard

Balanced Scorecard or SSP- the concept of transferring and decomposing strategic goals (see Goal setting) for planning operational activities and monitoring their achievement, a mechanism for interconnecting strategic ideas and decisions with daily tasks (see Tasks of strategic management), a way to direct the activities of the entire company to achieve them.

SSP is a system for measuring the effectiveness of the entire enterprise (strategic planning system), based on vision and strategy, which reflects the most important aspects of the business. The concept of the BSC supports Strategic planning, implementation and further adjustment of the strategy, by combining the efforts of all departments of the enterprise. .

The strategic map and BSC necessarily define the responsibility of departments and employees for achieving goals and indicators. This is one of the critical success factors in the implementation of the strategy.

The term in English is BSC.

History of creation

The BSC is based on the findings of a study conducted in the early 1990s by Harvard Business School professor Dr. Robert S. Kaplan and David P. Norton, president of the consulting firm Renaissance Solutions.

At the level of business processes, control of strategic activities is carried out through the so-called key performance indicators (KPI), in the English version - Key Performance Indicator (KPI). KPIs are, in fact, indicators of the attainability of goals, as well as characteristics of the effectiveness of business processes and the work of each individual employee. In this context, the BSC is a tool not only for strategic, but also for operational management.

Operating principle

The BSC methodology allows you to transfer the strategy to the level of the company's operational activities. Proper application of the methodology

allows you to solve the following tasks:

1. Establishment of specific parameters of strategic goals: strategic indicators with their numerical values ​​- KPI (key performance indicators), cause-and-effect relationships between goals, links between strategic indicators, deadlines for achieving strategic goals;

2. Distribution of responsibility for achieving strategic goals among company officials;

3. Determination of tools for achieving strategic goals.

The development of the BSC begins with the creation of a strategic map. The strategic map reflects the cause-and-effect relationships between the most important tasks necessary to achieve the target result. The target result is determined in several sections - perspectives: finances, clients, business processes, personnel development. For each task included in the strategic map, its key indicators are determined, which will measure the effectiveness of solving this task. All tasks included in the strategic map are necessary and sufficient in order to achieve the required target result. Therefore, the system of target indicators, reflecting the effectiveness of solving these problems, is called balanced. That is, the system of indicators is balanced with the system of strategic tasks (tasks included in the strategic map) necessary for the implementation of the strategic plan.

However, the full application of the methodology requires substantial resources. The development of a BSC system in the presence of a specialized division in the company can take more than two months. This requires serious quality control of the results. The laboriousness and complexity of development often repels company management from applying the BSC methodology.

Benefits of SSP

SSP has a number of advantages:
- provides the management of the enterprise with a complete picture of the business;
- allows you to prevent the occurrence of critical situations;
- facilitates interaction at all organizational levels and gives an understanding of the strategic goals to all participants in the production process;
- provides strategic feedback and training;
- helps to transform the huge amount of data obtained from a variety of enterprise information systems into information that is understandable.

Usage example

The Kaplan-Norton BSC technique is used by both small businesses, non-profit organizations, and entire cities. An example of a successful long-term implementation of the SSP method is the city of Charlotte in the state of North Carolina (USA) At the beginning of the draft strategy, the goals that the city of Charlotte intends to achieve are indicated here:

To be America's safest big city

The most prosperous city for each of its inhabitants

Become a city of impressive skyscrapers

The first city to integrate space use and transport alternatives

Be an eco-city.

BSC in the course of the company's activities

The balanced scorecard in practice includes the main factors of the company's activities:

1. Operational and financial efficiency .
2. Fact management. This concept involves the constant collection of information of various types: about customers, suppliers, products and services provided, operations, costs and profits, market conditions, competitive comparisons, employees.

Based on this analysis, it is possible to determine trends, company development prospects, carry out planning, evaluate the company's performance, compare the company's performance with its competitors or with industry averages.

3. Customer service.

These metrics should be recorded and reviewed regularly to see if the organization is achieving its strategic goals.
For the best achievement of goals, it is assumed that each employee has a personal scorecard and personal goals based on these indicators that he needs to achieve.

The main aspects (prospects) in the balanced scorecard

In the balanced scorecard, the organization is usually considered from the point of view of four perspectives (aspects). According to each of these perspectives, quantitative indicators are developed, data are collected and analyzed:
1) The prospect of learning and development.
Employee training contributes to the development of corporate culture. In any company, educated people are the main resource.
The development and improvement of knowledge and qualifications is especially important in an environment of rapid technological change, when it is not possible to hire new technically trained employees, and this also prevents the “brain drain” from the company.
2) Business process perspective.
This refers to internal business processes. These indicators make it possible to determine the company's customer orientation. Such work cannot be entrusted to external specialists, because it requires a clear understanding of all business processes of the organization.
3) Customer perspective.
It implies customer orientation and customer satisfaction in any area.
Even if the current financial situation is quite good, it is necessary to constantly analyze the types of customers, processes, products or services, their compliance with customer expectations in order to ensure customer loyalty in the future.
4) Financial perspective.
It is about providing timely and clear data on capital, processing and maintaining financial data. For a more accurate understanding of financial performance, additional financial metrics such as risk assessment and cost-benefit comparisons should also be considered.

Disadvantages of the BSC

A balanced scorecard has both positive and negative aspects.
1) SSP cannot be adapted to any conditions. A Balanced Scorecard developed and adjusted for a specific country or industry, for certain business conditions and internal management methods will not work just as effectively in other business conditions. This is especially critical for corporations and companies with a wide range of economic activities (if there are many branches in different countries).
Therefore, the BSC must be developed separately for any business entity, even if there are differences only in the size of the company (small firm and large corporation).
2) When implementing the company's activity strategy and developing the Balanced Scorecard, one must be careful with maintaining the company's information security and data confidentiality. This is due to the fact that in order for employees to understand the company's strategy, their awareness of all indicators of the company and internal motivation, all the mechanisms of the company's work should be disclosed to them. In this case, there is a risk of information leakage.

The introduction of a balanced scorecard leads to the fact that:

• The barrier to vision and understanding of the company's strategy grows from 5% of the total number of employees (without BSC) to 100%.
• The indicator of motivation and internal incentives tied to the strategy increases from the usual 25% of the total number of managers to 100%.
• The budgeting process is tied to the strategy.

Literature and references

This is a stub for an encyclopedic article on this topic. You can contribute to the development of the project by improving and supplementing the text of the publication in accordance with the rules of the project. You can find the user manual

Alexander Zilberman Leading Consultant at FinExpertiza Consulting
Magazine "Consultant", No. 17 for 2012

It is very easy to manage a company based on a balanced scorecard. There are a lot of advantages, while there are practically no disadvantages. Yes, and it is not so difficult to implement the system. But there are some nuances.

The main idea of ​​a balanced scorecard (BSC) is to shift the vector of management's attention when assessing the success of a company from purely financial indicators. According to this concept, the management of the enterprise should monitor not only revenue and profit, but also other criteria related to customer relationships, improvement of internal business processes, etc.

Evaluating the results of the company only by financial criteria, top management may lose sight of other components of success. For example, refusal to expand the product line will not require additional funds for technological equipment, modernization, etc. Therefore, in the short term, the company's financial performance will be better.

However, in the future, such a strategy may turn out to be a failure, since a company that does not modernize and modify products risks losing customer loyalty, and with it, market share. This is how Ford lost out in competition to its eternal rival, the General Motors Corporation.

The situation is similar with staff training. For example, a consulting firm may not invest in the training of its employees, and for some time such savings will have a positive impact on financial performance. However, over time, specialists who do not improve their qualifications will not be able to offer customers the best solutions, they will not know the latest changes and trends, which will affect the quality of services provided, reduce customer loyalty and ultimately lead to the loss of some of them.

The difficulty lies in the fact that staff training, customer relations and the development of internal processes cannot always be directly linked to the results of the company's activities. This is due to the fact that the effect of such events is complex and noticeable only in the long term. Therefore, funds for the development of these areas may be allocated irregularly, and the solution of problems may be delayed.

The main idea of ​​the BSC is precisely that the company's strategy, along with financial performance, should take into account non-monetary goals. To do this, the organization's specialists develop up to 20 main goals in four areas (finance, customers, processes, potential) and determine their own indicator for each goal.

Strategy maps

Often, company strategies contain a set of specific goals. The company can identify five or six major goals that it must achieve in the future. However, goals can be unrelated and even contradict each other.

The balanced scorecard has clear rules for setting goals. There are four main areas: finance, customers, internal processes, potential. For each of these areas, goals are developed that are linked to each other. A special map is being developed, on which the main relationships between the various goals are noted. In the future, this enables management to clearly understand how the implementation of individual areas allows achieving strategic goals.

Not finance

The BSC was developed precisely for the reason that too much attention was paid to financial indicators in many companies. As a result, many processes, the development of which is important in the long term, were postponed in order to achieve acceptable financial results here and now. For example, a company may not invest in the development of new technologies, maximizing the profits coming from cash cows, but in the long run it will lose out to competitors who have invested in R&D.

The BSC ideology recognizes that financial indicators are a priority for the company, but it encourages the definition of target values ​​for non-financial goals. As a result, the BSC allows for a balanced development, as individual areas of activity do not sag. Companies that use a balanced scorecard are better managed, have more prospects and are more transparent from the point of view of potential investors.

Responsible divisions are appointed for each strategic goal. For example, the logistics department will be responsible for “reducing the delivery time for equipment to the regions”. Based on this goal, this unit will develop several sub-goals, which will reflect both financial and non-financial indicators. Thus, each department can have its own BSC.

This process, called cascading, allows you to link the strategic goals of the company and the goals of individual departments.

Motivation and correction

The balanced scorecard does not cascade down to the individual employee level. Therefore, the dependence of the remuneration of each employee on the performance of the entire unit is introduced.

In the case of building the right motivation system, the specialist makes every effort and skill to ensure that his department achieves the indicators determined for him in the BSC. As a result, a connection between motivation and the implementation of the company's strategic goals is established, and the importance of the employee increases, as the impact of his activities on the development of the enterprise as a whole is visualized. It also helps to increase motivation and improve performance.

With clear and transparent metrics, management can monitor the performance of the organization. If any deviations occur, a certain indicator is not achieved, then the reasons are analyzed and the target values ​​are immediately corrected. This allows you to keep up to date both the operational management system and the enterprise strategy, which must be flexible and take into account ongoing changes.

A balanced scorecard can be compared to a kind of "dashboard" of a business. It is developed in such a way that, with a minimum number of controlled parameters, the manager (or owner) promptly receives information about any significant deviations in the activities of the enterprise or its division.

BSC gives the manager an additional, convenient control tool. It is appropriate to explain this with the following example. If the “oil pressure” light comes on on the dashboard of a car, this does not allow us to draw an unambiguous conclusion about the exact cause of the malfunction. But on the other hand, it makes it clear in time that it is necessary to immediately check in detail the condition of the engine and its main components.

Model application

The BSC does not replace a strategy or a planning system. Rather, it is a management method that allows you to systematically manage a company based on specific interrelated indicators and their values.

After analyzing and determining the position of the company in the market, the main goals are developed that it must achieve within three to five years. For each goal, indicators are determined and specific values ​​\u200b\u200bare developed, which serve as a guide for the enterprise.

Targets are first developed for the entire planning period, and then determined for a particular criterion for separate periods, usually equal to a calendar year.

The next phase of planning determines which strategic activities will help the organization achieve a balanced scorecard. Here, the annual values ​​of the criteria are adjusted in accordance with the timing of the implementation of strategic measures.

Responsible departments are defined for each indicator. There are situations when several departments are responsible for achieving one indicator. For example, regional sales departments receive their own revenue plan, which together gives a target value for the organization as a whole.

At the next stages, there is a cascading of indicators, that is, starting from the annual indicators for the whole company, each department receives its own indicators for which it must be responsible.

Thus, the BSC affects each division, linking the strategic goals of the enterprise and the specific tasks of the departments.

An important element of the system should also be the control system, when the company's management gradually evaluates the results of individual departments and the enterprise as a whole and makes adjustments to the BSC.

operational planning

An important aspect in the implementation of the BSC is related to the fact that some goals are not strategic for the company, but its daily functioning depends on them. For example, if an organization has a sufficiently low employee turnover rate, then the goal of “achieving a turnover rate of no more than X%” will not be put forward as a strategic one, since management is comfortable with the status quo.

Therefore, at the level of divisions, it is important to link strategic activities aimed at overcoming the strategic gap and the implementation of current activities. As already mentioned, the targets that a particular department must achieve are determined on the basis of the targets for the enterprise as a whole (high-level indicators).

For each top-level goal, it is determined which departments are responsible for its implementation and what target values ​​it must achieve in order to realize the strategic goals of the organization.

Thus, there is a cascading of indicators and departments receive their own BSC.

Then the head of the unit draws up its annual budget, highlighting in a separate section the activities that are of strategic importance to the company. When developing the next year's budget, the head of the department takes into account both current activities, which are defined in the "base budget" section, and the implementation of strategic activities that require separate provision of resources, described in the "project budget". This emphasizes the particular importance of strategic activities for the development of the organization. At the same time, only the implementation of both areas of activity will allow the department to achieve its targets.

Then, based on the budgets of the departments, a single company budget for the year is compiled. At this stage, adjustments to strategic activities and targets are possible if the resources required to achieve the goals exceed the organization's capabilities.

Thus, by implementing the BSC, the management receives a tool that links the strategy and daily activities.

Indicators and their measurability

Let's talk about the key mistakes that occur during the implementation of the system. The BSC includes four main areas in which the company's goals are developed: finances, customers, processes, and potential.

For some goals, it is quite simple to determine the indicator and the mechanism for its measurement. For example, an organization obtains information about financial performance from its own financial statements.

However, for a number of goals, the assessment of the base and target values ​​of the indicators is not obvious. In this case, it is necessary to carry out special measures that will make it possible to determine the baseline and the target value of the criterion.

Let's take a manufacturing company as an example. Let's analyze which indicators are easy to determine, and in which cases additional work is required (see table).

Table 1. Evaluation of indicators

perspective	Target	Indicator	unit of measurement	actual value	Target value (three-year horizon)	Information to evaluate the indicator
Finance	Reduce inventory in regions	Share of warehouse stocks by regions	%	25%	10%	Management reporting
Finance	Increase business profitability	Profit	%	12,5%	25%	Financial statements
Finance	Increase company revenue	Revenue	million rubles	650 million rubles	1 billion rubles	Financial statements
Finance	Reduce variable costs per unit of output	Variable cost per unit of output	Rubles by type of product	Additional calculations are required by product types		Financial statements
Clients	Enter new regional markets	Share of sales in new markets	%	5%	25%	Marketing research, accounting reporting
Clients	Increase company share	Company market share	%	7,5%	10%	Marketing research
Clients	Improve customer feedback system	Waiting time for a client to connect to a contact center agent	Min.	5.5 min.	2.5 min.	Call center data processing
		Estimated value	Points			Customer Satisfaction Study
Clients	Raise awareness among the target audience	Estimated value	%	45%	65%	Analysis of recognition among the target audience
Processes	Reduce the delivery time of equipment to the regions	Average delivery time of equipment by region	Number of days	15	5	Logistics service data
Processes	Reduce product development time	Average time to develop new products	Number of weeks	Additional calculations required		R&D data
Processes	Accelerate warranty repair of equipment	Average time for warranty repairs	Number of days	20	10	Warranty department details
Processes	Increase quality control in production	Number of warranty claims	%	2%	0,5%	Management reporting
Potential	Improve the qualifications of staff in the field of R&D	Estimated value	Points	Additional calculations required		Certification
Potential	Increase employee motivation	Staff turnover among key employees	%	Need to identify key employees
		Satisfaction assessment	Points	50 points	80 points	Employee Survey
Potential	Increase the level of initiative of employees	Number of employee initiatives	PCS.	Requires a preliminary calculation of the indicator		Creation of special statistics
		Implementation of a feedback system	Implementation of the implementation schedule			Quarterly Data
Potential	Increase presence in targeted media	Number of articles and comments	PCS.	5 articles, 40 comments per year	10 articles, 100 comments	Target media monitoring

As can be seen from the table, for a number of purposes it is easy to determine the indicator and how to measure it. This primarily concerns finances and, to a lesser extent, the “customers” direction. In the areas of “processes” and “capacity”, it is much more difficult to do this, since there are often no clear criteria for evaluating these goals.

For example, the goal is to “improve the customer feedback system”. Two indicators were proposed - "the time the client waits for a connection with the contact center operator" and "calculated value". The time is determined on the basis of a survey of customers in order to find out how satisfied they are with the opportunity to express claims and wishes to the company.

To evaluate the first indicator, it was necessary to install special software, which made it possible to track the client's waiting time before connecting with the operator. To evaluate the second, a selective survey was conducted, during which it was found out how satisfied customers are with the quality of interaction with operators, the speed of solving their problems, etc.

Since the measurement of indicators requires additional costs, many companies choose indicators that are easier to measure instead of more informative. Such errors significantly impair the effectiveness of the SSP.

Lack of strategic analysis

One of the common mistakes in our practice when implementing the BSC is the lack of a deep strategic analysis before the development of the system. That is, companies are trying to skip the stage of strategic analysis and go straight to the definition of indicators that they must achieve. This is fraught with very serious consequences.

For example, in one of the Russian banks, the goal in the "customers" direction was "to take a share of the consumer lending market." This was done in 2003-2004, when consumer lending was developing very rapidly and many banks considered it their duty to play in this field. As a result, significant funds were allocated to solve this problem, additional branches were opened to provide potential private clients with convenient and fast loans. However, this direction soon had to be curtailed.

The main clients of the bank were large state structures. Experience in the retail market was not enough. In addition, the bank could not offer private clients the same attractive conditions as competitors specializing in this area. And even despite the efforts made and the funds spent, it was not possible to occupy the required share of the consumer lending market. Therefore, these programs had to be curtailed, focusing on the main areas of activity.

Thus, the definition of any indicators is not fundamental. Before the development of the BSC, a strategic analysis is necessary, identifying strengths and weaknesses, analyzing competitors, suppliers, consumers and other elements of the external environment.

Company's unpreparedness for implementation

One of the key challenges to implementing a balanced scorecard is resistance to change. After the development of the BSC, the project is often put aside, and the company continues to live in the old way. This behavior is partly explained by the fact that the introduction of clear indicators can weed out effective managers from inefficient ones, which is not desirable for everyone.

In addition, in order for the BSC not just to gather dust on the shelf, but to serve as a management tool, it is necessary to control the implementation of the strategy, evaluate intermediate results and make adjustments to the company's activities. These activities take time, especially at the stage when the system is just being implemented and the procedures have not yet been worked out. For these reasons, there are often situations when the BSC implementation process ends at the stage of document approval.

One of the basic elements to overcome such resistance may be the introduction of the BSC in any one division of the company. Successful experience will also show the leaders of other departments that the time they will spend on development, implementation and control will be well spent. This will significantly increase their loyalty, and at the same time, the likelihood of successful implementation of the BSC.

Irina Loshchilina

Consultant of the State Corporation "Modern Management Technologies"

The article discusses the methodology for building and implementing a balanced scorecard (BSC). The article is intended for business analysts, BSC implementation consultants and IT professionals.

Assessment of the need to build a company strategy

Today, in order to succeed in a dynamic environment, companies need to be able to quickly adapt to changing market conditions and outperform their competitors in terms of quality, speed of service, breadth of product range and price of products.

Only prompt receipt of information about the company's activities will help the management to make a decision in a timely manner. At the same time, the operational actions of the company must be coordinated and aimed at achieving certain long-term goals, otherwise there is a risk of remaining in place. To do this, the company must be able to correctly identify its strategy and mobilize all resources to achieve its strategic goals.

A lot in the development of the company can depend on a correctly and clearly formulated strategy. It is important to understand that a well-designed strategy is only half the battle. It still needs to be successfully implemented.

What does the strategy look like? Formal representations of different companies about the strategy differ. Presentation options range from a single slide with five keywords to an impressive document full of various tables and titled "Long Term Planning".

Many believe that the content of the strategy plays a key role, and the form of presentation is secondary. Gradually, managers are abandoning this point of view, as they understand that strategies can only be successfully implemented when they are understood by the company's employees. By describing the strategy in a more or less ordered form, we increase the likelihood of its successful implementation.

One of the tools for presenting the strategy implementation process in an understandable form is a balanced scorecard (Balanced ScoreCard, BSC).

A balanced scorecard is a system of strategic management of a company based on measuring and evaluating its effectiveness on a set of optimally selected indicators that reflect all aspects of the organization's activities, both financial and non-financial. The name of the system reflects the balance that is maintained between short-term and long-term goals, financial and non-financial indicators, main and auxiliary parameters, as well as external and internal factors of activity.

Currently, there are not many examples of successful application of the balanced scorecard in practice, because when implementing the Balanced ScoreCard, one has to face various problems. The most serious problems most often relate to the incorrect interpretation of the methodology or organizational issues. The labor intensity of developing a balanced scorecard and the lack of inexpensive and effective software products are also problems that one has to face in the practical implementation of BSC.

The effectiveness of a balanced scorecard depends on the quality of its implementation. The introduction of a balanced scorecard is carried out in four stages:

• Preparation for building BSC;
• Building a BSC;
• BSC cascading;
• Monitoring the implementation of the strategy.

Implementation of strategy implementation methodology today is continuously connected with automation. The implementation of the Balanced ScoreCard, for example, using Microsoft Excel, or without any information support at all, is only possible at the initial stages of BSC implementation or in small organizations. If a company sets as its goal the introduction of a balanced scorecard for several structural divisions and periodically refines and adjusts them, then it is impossible to do without using the advantages of information technology.

Currently, BSC developers have the following software products at their disposal: ARIS 7.0, Microsoft Office Business ScoreCard Manager 2005, Business Studio 2.0.

Let's consider in more detail the methodology for developing and implementing a balanced scorecard. To illustrate the main stages of building a Balanced ScoreCard, we will use the Business Studio 2.0 software product.

Preparing to build a balanced scorecard

At the stage of preparation for building a BSC, it is necessary to develop a strategy, determine the prospects and decide for which organizational units and levels a balanced scorecard should be developed.

It is important to always remember that BSC is a concept of implementing existing strategies, not developing fundamentally new strategies. You must first complete the development of the strategy, and then proceed to create a balanced scorecard.

When determining the departments for which the Balanced ScoreCard will be developed, the following should be taken into account: the more departments of the enterprise are strategically managed using one BSC, the better it is possible to cascade (decompose, transfer) important goals from the top level to the bottom.

One of the important activities in preparing for the development of a balanced scorecard is the choice of perspectives.

Any strategy development model can claim to be complete only if it contains answers to questions related to different areas of the company.

Setting only financial goals when implementing a balanced scorecard is not enough if it is not clear how these goals will be achieved. In the same way, it will not be entirely correct to set goals isolated from each other. In this case, the relationships between individual goals and their influence on each other remain unaffected. This implies the need to take into account all important aspects of the enterprise.

Consideration of various perspectives in the formation and implementation of the strategy is a characteristic feature of the concept of a balanced scorecard and its key element. The formulation of strategic goals, the selection of indicators and the development of strategic actions in several perspectives are designed to provide a comprehensive review of the company's activities.

Rice. 1. Perspectives of BSC

Companies that formulate their strategy too one-sidedly do not necessarily veer toward finance alone. There are companies that are too customer-focused and forget about their financial goals. Some companies may be overly process oriented and do not pay attention to market aspects. The introduction of a balanced scorecard, in turn, provides an equal consideration of several perspectives and helps to avoid such a bias.

Based on their empirical research, Robert Kaplan and David Norton proved that successful companies take into account at least four perspectives in their BSC (Fig. 1):

• Finance;
• Clients;
• Internal business processes;
• Education and development.

These four perspectives should provide answers to different questions, namely:

• Finance Perspective: What image of ourselves do we need to create with our shareholders in order to achieve financial success?;
• Customer Perspective: What kind of self-image do we need to create with our customers in order to realize our vision of the future?;
• “Internal Business Processes” Perspective: In which business processes do we need to excel in order to meet the needs of our shareholders and customers?;
• Learning and Development Perspective: How should we maintain the ability to change and improve in order to realize our vision of the future?

Simplicity and the presence of clear logical relationships between BSC perspectives make it possible to achieve an understanding of the processes taking place in the company at the level of all performers.

Building a balanced scorecard

At the first stage of building a Balanced ScoreCard, a balanced scorecard is developed for one organizational unit. It can be a company as a whole, a division or a department.

In this case, the construction of BSC is carried out by performing the following steps:

• Specification of strategic goals;
• Linking strategic goals with causal chains - building a strategic map;
• Selection of indicators and determination of their target values;
• Development of strategic measures.

Specification of the strategic goals of the balanced scorecard

Rice. 2. Strategic goals of BSC

In general terms, a goal is a description of the desired state of something in the future. This state can be expressed in the words: "to supply customers with our products within a short period of time." You can specify the wording with the help of indicators and their target values: "delivery time less than 36 hours."

To build a strategic management system, it is necessary to decompose (break down, structure) the company's strategy into specific strategic goals that reflect various strategic aspects in detail. By integrating individual goals, cause-and-effect relationships between them can be established so that the full set of goals reflects the company's strategy.

Each strategic goal is associated with one of the prospects for the development of the organization (Fig. 2).

You should not define too many strategic goals for the highest level of the organization. A maximum of 25 targets will suffice. Too many goals in a scorecard indicates the inability of the organization to focus on the main thing, and also means that the formulated goals are not strategic for the organizational level at which the scorecard is being developed. The development of tactical and operational goals should be given attention in the systems of indicators of subdivisions of the lower levels of the organizational structure.

Building a strategic map of a balanced scorecard

Determining and documenting causal relationships between individual strategic goals is one of the main elements of BSC.

Established cause-and-effect relationships reflect the presence of dependencies between individual goals. Strategic goals are not independent and isolated from each other, on the contrary, they are closely related to each other and influence each other. The achievement of one goal serves the achievement of another, and so on, up to the main goal of the organization. Links between different goals are clearly visible due to the causal chain (Fig. 3). Those that do not contribute to the realization of the main goal are excluded from consideration.

The causal chain is a handy tool for bringing the BSC down to the lower organizational levels.

A strategic map is used to graphically display the relationship between strategic goals and prospects.

Rice. 3. Causal relationships of strategic goals

Choice of indicators of the degree of achievement of strategic goals

The BSC scores (boxes in Figure 3) are target meters. Indicators (Fig. 4) are a means of assessing progress towards the implementation of the strategic goal.

The use of indicators is intended to concretize the system of goals developed in the course of strategic planning and to make the developed goals measurable. Indicators can only be identified when there is clarity about the targets. Choosing the right metrics is a secondary issue, because even the best metrics won't help a company succeed if the goals are wrong. It is recommended that no more than two or three indicators be used for each of the strategic objectives.

Without targets, indicators designed to measure strategic goals are meaningless. Determination of target values ​​of management indicators causes difficulties not only in the development of BSC. The fundamental difficulty in determining the target value of a particular indicator is to find a realistically achievable level.

As a rule, a balanced scorecard is developed for a period corresponding to the long-term period of strategic planning (3-5 years). At the same time, long-term target values ​​are determined for delayed indicators (indicators that speak about the final goals of the corporate strategy). Since the implementation of the strategy is also carried out in the current year, target values ​​are also set for the medium-term (1 year) period - for leading indicators (indicators that change over time over a short period of time). Thus, a balance of the system of indicators for long-term and short-term goals is achieved.

In the Business Studio 2.0 system, the content of short-term plans is detailed by periods (quarters, months, weeks, days) and expressed as planned values ​​of indicators. Indicators and their target values ​​(values ​​that are planned to be achieved) provide management with timely signals based on deviations of the actual state of affairs from the planned one, i.e. the actual quantitative results obtained are compared with the planned ones.

So, the indicator is a meter showing the degree of achievement of the goal. However, it is also a tool for evaluating the effectiveness and efficiency of a business process. Indicators serve both to assess the effectiveness of processes and to assess the degree of achievement of the goal at the same time.

Rice. 4 BSC indicators

Strategic activities to achieve strategic goals

Achieving strategic goals involves the implementation of relevant strategic measures. “Strategic activities” is a general term for all activities, projects, programs and initiatives that are implemented to achieve strategic goals.

The distribution of the company's projects according to the goals of the balanced system creates clarity in understanding what contribution this or that project makes to the achievement of strategic goals. If projects do not make a significant contribution to the achievement of the strategic objectives, they should be reviewed to see how they contribute to the achievement of the basic objectives. If one or another strategic event does not make a significant contribution to the achievement of basic goals, then the need for its implementation is extremely doubtful.

Cascading Balanced Scorecard

Cascading leads to an increase in the quality of strategic management in organizational units involved in building a balanced scorecard, since goals and strategic activities from higher units can be sequentially transferred to the BSC of lower organizational units - this is vertical integration of goals.

When cascading, the strategy specified in the corporate Balanced ScoreCard applies to all levels of management. The strategic goals, metrics, targets, and improvement actions are then fleshed out and tailored across departments and teams. That is, the corporate balanced scorecard should be linked to the BSC of subdivisions, departments and individual work plans of employees. Based on the BSC of their division, each department develops its own BSC, which must be consistent with the corporate BSC. Then, with the participation of the head of the department, each employee develops his own individual work plan. This plan focuses more on delivering real results in the workplace rather than tasks or improvement actions.

Thus, when cascading, a bridge is established between successive levels of the hierarchy, along which the corporate strategy sequentially descends.

Monitoring the implementation of the strategy

To improve the balanced scorecard, top management and those responsible must constantly review and evaluate the organization's performance.

Strategic objectives are characterized by a high degree of relevance to the company, and this relevance should be assessed at least annually. In doing so, it is necessary to evaluate:

• Are the selected indicators suitable for assessing the degree of achievement of the developed goals?;
• How easy is it to calculate indicator values?;
• Has the structural subdivision reached the target values ​​of the developed indicators?;
• Have the target values ​​of indicators of higher units been achieved?;
• What contribution does the structural unit in question contribute to the achievement of the goals of the upper levels?

The evaluation of indicators is primarily to understand the possibility of calculating the actual value of the indicator based on the data of the reporting period. In addition, it is necessary to compare the plan-fact on the values ​​of the developed indicators with the clarification of the causes of deviations. Such an analysis is accompanied by either an adjustment of the target value of the indicator, or the development of corrective measures aimed at achieving the previously set target value.

The lower level BSC should always be evaluated to help achieve the higher level goals.

In addition, it is advisable to predict the target values ​​of indicators for a long period of time.

What does the company get as a result of the implementation of a balanced scorecard?

Let's sum up some intermediate results. What does the enterprise get as a result of the description of the strategy and its consistent implementation using the Balanced ScoreCard methodology? The first and most important is the concentration of efforts on strategically important areas for the company. The main goal of the company is determined, the means of achieving it (strategic goals) are outlined, the goals are cascaded by departments. The second result, respectively, is the presence of strategic goals for each division - that is, everyone understands what needs to be done. The third result is the possibility of a clear understanding of the effectiveness of actions. The presence of indicators for each goal to achieve it allows each participant in the process to understand their role in the implementation of the company's strategy. And, finally, the fourth result is the control and manageability of the process of implementing the strategy from the top down. The company, in the hands of its leaders, becomes an effective tool for achieving the goal.

Advantages of a computer over pencil and paper

All of the above is quite achievable without the use of any automation. Moreover, a number of successful enterprises used similar methods at the end of the 19th century, when computer technology was not as advanced as it is today. Another question is whether it is convenient to work with pencil and paper, will automation at some stage increase the efficiency of implementing the strategy? Of course, pencil and paper is only a symbol. The collection and some processing of indicators is quite feasible using at least the same Microsoft Excel. However, goals can change, the significance of some indicators after the test of time will be overestimated, some elements that we considered unimportant will begin to play a strong role ... The leader must be able to respond to changes and make changes to his plan as quickly as possible - after all, every step, done in the wrong direction takes us away from the goal.

As a rule, the main problem faced by enterprises that have decided to implement this strategy implementation methodology is not how to automate the creation of a tree of goals and indicators or the construction of a strategy map, but how to automatically constantly provide BSC with fresh data and keep it in working order. Without this, operational control over the implementation of the strategy is impossible. For example, you can use the mechanism for collecting indicator values ​​using mailings, implemented in the Business Studio 2.0 software product (Fig. 5). The means of collecting the values ​​of indicators that are not contained in the information system are Microsoft Excel files that are automatically sent to performers and then imported into the system.

For each individual responsible for entering the values ​​of indicators into the system, a dynamic letter is generated with instructions for filling out the reporting table. The Business Studio 2.0 system finds all indicators for a given individual and generates a Microsoft Excel file containing a table with indicators for which this individual is responsible for entering the values. This file is attached to the letter, and then these letters with files are sent to the electronic address (E-mail) of an individual stored in the system directory.

Rice. 5. Mechanism for collecting indicator values ​​using mailing lists

Next, individuals fill in the files with the actual values ​​of the indicators and place them in a specific folder on the file server or send them to the system administrator. The system automatically reads the files from the folder and uploads them to its database.

At this stage, the collection of indicator values ​​ends.

A balanced scorecard, like any other management tool, should be adjusted as the company develops and the external environment changes. The environment in which the enterprise operates is usually very dynamic, which leads to the adjustment of strategic goals. And this, in turn, requires constant updating of indicators for achieving these goals. However, in most cases this does not happen, which makes the balanced scorecard of performance unworkable at best, if not downright harmful.

The collected indicator values ​​should be made available to stakeholders for analysis. To do this, the system contains a set of pre-configured reports, which, if necessary, can be changed or supplemented with new ones. Planned and actual values ​​of individual indicators are presented in BSC reports in dynamics for several periods. The analysis period can be selected by the user in the Business Studio 2.0 system settings.

Fierce competition, in which modern enterprises live and operate, dictates the need to improve the efficiency of each aspect of the enterprise. Management is no exception. The manager needs tools for his work just like any other employee. The technique described by us is not as complicated as it is effective, and the availability of software tools for its implementation allows you to perform this work in real time.

The activity of any organization, enterprise, state or municipal authority, institution is aimed at achieving some goal. In the case of commercial organizations and enterprises, the main goal is to make a profit, which means that the company's performance should be evaluated through the prism of financial achievements. Until recently, this indicator was the main, and sometimes the only criterion for success, especially in the business environment. Therefore, most companies, setting themselves strategic goals to improve the quality of products and services, improve customer relationships and create environmentally friendly production, evaluate their achievement in terms of finance. Conquering new markets, improving their image, they get disappointing results in the short term. This is due to the fact that intangible assets are extremely difficult to assess using financial indicators.

Balanced Scorecard(Balanced Scorecard) is a strategic management and evaluation system linking goals and overarching indicators. It is designed to supplement the traditional system of financial indicators with the missing components in order to organize a more complete and comprehensive assessment of the company's activities. The main idea of ​​a balanced scorecard (BSC) is not only to evaluate financial assets based on the results of the reporting period (past), but also to provide mechanisms for assessing prospects (possible future).

It is interesting

The BSC concept was developed in the early 1990s. D. Norton and R. Kaplan in a study sponsored by the consulting firm KPMG. The first results were presented in the Harvard Business Review article "The Balanced Scorecard" in 1993. In 1996, the first book on BSC was already published.

The balanced scorecard of the organization is built using the following elements:

• directions (areas of opportunities for achieving goals);
• strategic goals;
• key indicators (used to measure the degree of achievement of strategic goals);
• target values ​​(planned or standard values ​​of indicators);
• strategic initiatives (means to achieve strategic goals);
• causal relationship.

The strategy, including development directions, goals, indicators and cause-and-effect relationships between them, is described using strategic maps.

In the BSC, all possible directions for the development of the organization are divided into four categories: 1) finance; 2) clients; 3) internal business processes; 4) training and development of personnel (see Figure 9.2).

Thus, using the BSC, one can determine how the organization works to create value for current and future customers, on the one hand, and what should be done in order to expand internal capabilities and increase investment in people, business systems and procedures in order to improve their activities in the future, on the other

Thus, the BSC is designed to transform the mission and strategic goals of the company into specific tasks and indicators that take into account the requirements for evaluating the actions performed and form the requirements for future development. Unlike the traditional financial accounting and reporting system, which allows for operational and tactical assessments of the company's activities, the BSC, on the contrary, is a strategic planning tool. With its help, the organization is considered as a combination of various tangible and intangible assets, therefore, in addition to financial indicators, great importance is attached to such indicators as customers, internal business processes, personnel and the development of the company as a whole (see Fig. 9.2).

Rice. 9.2.

The connecting element between the above four components (directions) of the BSC are cause and effect relationships, which show how one of the components affects the successful functioning of the other. For example, poorly trained personnel will not be able to effectively perform their duties, thus even an optimally built business process will not give the required result.

Each of the four directions has specific goals, the achievement of which will lead the organization to the desired state. Between them there is also cause and effect relationships.

Important to remember

When formulating a goal, the following principles should be followed:

• 1) specificity and clarity of purpose;
• 2) measurability;
• 3) reality;
• 4) time frame.

For example, the wrong goal setting is to expand the sales market; the correct setting is to open three regional branches within the next year. The last version of the goal has a clear setting of what needs to be done, what can be measured (are branches open or not, and if open, how many), it can really be achieved and there are time limits (one year).

To translate goals from a verbal description such as "Increasing the sales market" into digital form, we use performance indicators or performance indicators. Their task is to give accurate target values(for example, "Increase in the sales market this year by 10% compared to last year"). This will allow you to set a more specific task for the staff, and then unambiguously evaluate the result. Performance indicators help to evaluate the ratio of the actual result to the target values.

An element like initiatives, is intended to describe the actions that are expedient to perform to achieve the goals in accordance with the development strategy.

Thus, for each of the four components, you should specify: strategic goals, indicators, values ​​and initiatives. This is usually done in the form of a table, an example of which is given below (Table 9.1).

Table 9.1

Description of the balanced scorecard component

Financial indicators allow you to evaluate the economic effect of the company's activities for the previous period. Typically, the financial objectives of an organization are profit, which can be measured in terms of loan income, operating profit, and the value added of products or services. In addition, sales volume can serve as financial targets.

The following financial indicators can be cited as an example:

• group of indicators of income growth and scale of operations:
  • - indicator of sales volume;
  • - the share of income from sales of a new product;
  • - profitability of the product or customer;
  • - share of unprofitable clients, etc.;
• a group of indicators that identify cost reduction:
• - the relation of the received income to the available personnel;
• - cost reduction;
• - comparison of own costs with the costs of competing firms;
• - the cost of a product, service, etc.;
• group of indicators of asset utilization efficiency:
• - return on investment;
• - liquidity ratio of working capital;
• - utilization rate of fixed assets;
• - percentage of sales of new products, etc.

Indicators client components allow us to formulate a strategy focused on potential consumers and customers, which will provide the company with the desired income. These indicators include:

• customer satisfaction;
• maintaining or increasing the customer base;
• expansion of the sales market;
• occupied market share;
• profitability of clients (revenue from sales to the client minus the cost of the product and the cost of attracting and retaining the client);
• customer value proposition.

Within the component "Internal business processes", as reflected in its name, the emphasis is on business processes, the implementation of which determines the success of financial and client indicators, i.e. we are talking about the main business processes, the effectiveness of which directly affects the achievement of the company's strategic goals.

The approach to assessing the company's processes within the framework of the BSC concept differs from the traditional analysis of the company's activities, which is based on monitoring and optimizing business processes by reducing resource provision and costs. Within the framework of the BSC, it is proposed to create new processes, the goals of which are to satisfy consumers and achieve financial performance in accordance with the organization's strategy. In accordance with the BSC concept, the category of internal processes also includes innovative processes, since the development of the company depends on their implementation.

Thus, the BSC considers the processes that are implemented to achieve strategic goals (ie, those related to production, marketing, sales and service delivery), as well as the processes for designing and developing products and services.

• staff development;
• modernization of IT infrastructure;
• organization of effective information exchange and knowledge exchange within the company.

To assess the personnel and the climate in the company, indicators such as:

• employee satisfaction with work, team, wages, etc.;
• retention and retention of valuable employees;
• employee efficiency (efficiency in performance of job duties).

One of the main rules of the BSC is to observe and strengthen the relationship between these four components, where in order to achieve the indicators of one, it is necessary to achieve the performance indicators of the other, since the skills and abilities of the staff, the information technologies and systems used, affect the efficiency of the implementation of business processes, i.e. . on the quality and quantity of products and services provided. Identifying and improving core processes (those that add value to the products and services produced) and innovation processes (those that are carried out to create

platforms for the further development of the company) allow you to satisfy the client, and maybe even exceed his expectations. It is this result that allows you to get the desired profit and develop the company in the planned directions.

Thus, the BSC is a system of goals, performance indicators and factors that make it possible to assess the degree of achievement of the set goals.

Since the main object of study in this textbook is business processes, then we will further consider one of the four components of the BSC - the "internal business processes" component.

BSC component "Internal business processes" is designed to identify and evaluate activities that are most important for achieving the goals of consumers and owners of the company.

In order to develop this component, it is necessary to identify processes that meet the requirement described above. However, it should be taken into account that the development of this component should only begin after the financial and client components have been created. The presence of this requirement is due to the fact that before highlighting the main and innovative business processes, it is necessary to determine financial goals (what financial results are expected by the founders of the company) and goals related to meeting customer expectations. After all, it depends on what tasks the main activity of the enterprise faces and with the help of what indicators it is possible to evaluate the effectiveness of its implementation.

Therefore, the determination of the goals for the implementation of this component and the development of performance indicators should be carried out using the deduction method (from the general to the particular). As you know, it is actively used in the study and modeling of business processes. First, the goals and objectives of the company are studied, then the groups of main processes, the implementation of which is aimed at their (goals and objectives) achievement.

Since each organization is unique, as there are nuances in the mission, goals, corporate culture, personnel, specifics of the products created and services provided, the business process system is unique. However, it is possible to single out a set of processes characteristic of most companies involved in creating the added value of the company's products and services, namely (Fig. 9.3):

• analysis of the market and its needs;
• product/service creation;
• sale of a product/provision of services;
• after-sales (service) service.

Rice. 9.3.

Depending on the specifics of the organization, by adding the necessary processes, it is possible to build a value chain for a specific organization (for more information on the customer value chain, see Chapter 3).

For example, for an enterprise that manufactures a product or product, the value chain may look like the one shown in Fig. 9.4. Here you can see that in the center of the chain appears the process "Manufacture of the product".

Rice. 9.4. Manufacturing enterprise value chain

Since when forming the "Internal business processes" component, processes are selected whose results allow achieving the company's strategic goals, sometimes a situation arises in which a list of processes that is completely different from the value chain is formed. An example is a film company that produces animated films for children. One of the strategic goals was to expand the consumer audience through active brand promotion. In this connection, the following management processes have become one of the main processes considered in the BSC: product promotion and brand.

Since most companies prefer to develop according to standard scenarios, we will take a closer look at the processes included in the basic value chain (see Figure 9.3) and the manufacturing enterprise chain (see Figure 9.4).

Within the framework of the BSC concept analysis of the market and its needs implemented in order to identify the desires of the market and possible directions for the development of products and services. In practice, he is a "partner" of the process "Development of a new product or service", since further actions of the chain may not start if one of them is not implemented, because even if you come up with something, but there is no potential consumer of your invention (the market is not interested in it), then sales will not go. Or, on the contrary, the analysis and the found directions for the development of the product in themselves, on paper, have no value for the end user. A couple of these processes fall into the category innovative(Fig. 9.5), since it is their implementation that allows the company to increase its knowledge and innovative assets, which open up opportunities for development and increase its presence in the market.

Rice. 9.5. Innovative business processes

Most managers of various companies believe that the most important business processes in the activities of the organization are the operational processes of production and sale of products and services. The world is steadily moving towards a new type of economy built on knowledge. In this regard, many organizations that adhere to the described approach, in order to maintain their positions in the market, need to change priorities in ranking the importance of their business processes. And innovative processes come to the fore. Because in an environment where knowledge wins, effective knowledge management and innovation becomes more important than optimally organized operational processes.

To evaluate the innovation process, indicators such as:

• Percentage of new product sales in total sales;
• gross profit from the sale of a new product (an indicator for evaluating the process of developing a completely new product);
• profit from sales of rights to use patents;
• sales volume of a new product for the period (indicator for assessing the innovativeness and real demand for the product on the market);
• the amount of research and (or) development work performed for an external customer;
• the volume of research and (or) development work performed for the internal customer;
• the duration of the development of a new product (an indicator is extremely dangerous, it can only be used as an additional one, since sometimes the development time depends on many reasons, since it is possible that a product, the development of which spent a lot of resources, including time, subsequently will be in high demand in the market and will bring more income than a product on the development of which fewer resources were spent);
• break-even period (an indicator for evaluating the effectiveness of the product improvement process or the process of optimizing production processes).

Important to remember

The break-even period (Break-Event Time - BET) is the time from the beginning of the development process of a new product to the moment when it was introduced to the market and a profit was made sufficient to return the investment made initially in the development project. This indicator combines three elements that characterize the effectiveness of the new product development process: 1) the effectiveness of the development process; 2) the profitability of the new product; 3) time to develop a new product (getting ahead of a competitor gives advantages in the market, which means a quick payback) (Panov M. XI. Performance evaluation and company management system based on KPI. M.: INFRA-M, 2013).

Operational processes(Fig. 9.6), such as production of products, sale of products, provision of services, as well as delivery of goods to the consumer, do not play the most important role within the BSC, although their role in the customer value chain is undeniable. Typically, these processes are evaluated using classical indicators, such as:

• process execution time;
• the cost of implementing the process;
• the number and cost of errors or deviations, etc.

However, these indicators are not applicable, for example, in the production of non-standard products, since in this case it is impossible to determine the average value for each such process. In addition, the unstable pricing policy of material suppliers and the rotation of personnel lead to distortions in the results of assessing the effectiveness of the process. This requires a prompt review of the structure or reference values ​​of the indicator.

Rice. 9.6.

Qualitative performance indicators can also be used to evaluate operational processes, such as:

• the ability to quickly change the sequence of process operations (for example, a standard order is performed as follows: payment for the product - production - delivery to the client; as an exception, this cycle changes to the following: production - delivery to the client - payment for the order);
• endowing the product with unique properties (at the request of the customer) that give it additional value (for example, engraving jewelry at the request of the client).

Processes after-sales service(return acceptance, service and warranty maintenance, installation, equipment setup, etc.), as well as all the previously considered processes of the value chain, allow increasing the consumer value of the company's products and services. Their effectiveness can be assessed using the same indicators that evaluate the effectiveness of operational business processes.

For example, the indicator "number of deviations" or "number of completed service requests without complaints" allows you to evaluate the quality of the implementation of the process.

• Dirlav D. Selected business concepts. Theories that changed the world / Per. from English. Moscow: Olimp-Business, 2007.
• Kaplan R. S. Norton D. P. Balanced scorecard. From strategy to action. M.: Olimp-Business, 2003.

Any company is the object of close attention of a wide range of stakeholders: shareholders, managers, employees, creditors, suppliers, consumers, partners. Based on their specific interests, each party approaches the issue of evaluating the company's activities in its own way, identifies important factors and aspects of activity for it, which it will evaluate. The object of evaluation is the company's activities aimed at maintaining relations with the main stakeholders. This approach defines the internal structure of the balanced scorecard…

The balanced scorecard (BSC) is considered primarily as a system for evaluating the performance of companies (organizations, enterprises). We will try to identify the prerequisites that led to its appearance.

First of all, this is a change in the structure of companies' assets and the nature of their activities. The main resources for which there was a struggle at the dawn of civilization were land and natural resources. With the development of industry, the emphasis in competition shifts to the area of ​​fixed assets and capital. Increasingly important role is played by intangible assets in the form of licenses and patents, knowledge and skills of staff, trademarks and brands. However, unlike land and oil, buildings, structures and equipment, intangible assets are difficult to “touch” and just as difficult to value in monetary terms. As a result, the importance of non-financial instruments in assessing the activities of companies is increasing.

In addition, the need for a systematic approach to relations with stakeholders and the activities of the company as a whole can be considered a prerequisite for the emergence of the BSC. This is due to the increase in the speed of changes in the external environment: in a competitive environment, in politics and economics.

Consideration of the balanced scorecard will begin with several issues related to performance evaluation, namely:

• why evaluate?
• what to evaluate?
• how to evaluate?

The answer to the first question, it would seem, is obvious - to make a management decision. However, not all so simple.

Any company is the object of close attention of a wide range of stakeholders ( stakeholders). Here is an incomplete list of them: shareholders, managers, employees, creditors, suppliers, consumers, partners. In this case, each of the parties pursues its own specific interests ( rice. one).

Rice. 1. Stakeholders and their interests

Based on interests, each party approaches the issue of evaluating the company's activities in its own way, identifies factors and aspects of activity that are important for it and which it will evaluate. This raises the next question: “What to evaluate?”

The balanced scorecard is not intended to evaluate the company as a whole, although it may include financial indicators that characterize, among other things, the value of the company (the value of its net assets, revenue, profit, etc.).

The object of evaluation is the company's activities aimed at maintaining relations with the main stakeholders. This approach determines the internal structure of the BSC. In this connection, we move on to the next question: “How to evaluate?”

American "business gurus" Robert Kaplan ( Robert Kaplan) and David Norton ( David Northon), the authors of the system, propose to consider four main aspects of evaluating a company's performance:

• finance - success is assessed in terms of meeting the interests of shareholders;
• consumer relations - it is estimated how successful the company is in its relations with consumers;
• internal business processes - it is assessed how reasonably managers manage internal processes in the company, how optimally these processes are organized;
• innovation and personnel - it is assessed how much the company cares about its own development and, in particular, about the development of such a resource as personnel.

The composition of assessment aspects is determined by the specifics of the activities of each particular organization, and when designing a system, special attention should be paid to choosing the most appropriate aspects. At the same time, it should be noted that all aspects of assessment are considered to be interconnected by a coherent logic of cause-and-effect relationships. This logic, depending on the relationship of the company with various stakeholder groups, may vary.

Description of the balanced scorecard

Building logic

Consider the internal logic behind the balanced scorecard. As mentioned above, each of the aspects of evaluation is associated with activities that affect the interests of one of the parties (shareholders, consumers, managers, employees). The choice of specific aspects of assessment is determined by the specifics of the organization's activities and depends on the strategies and priorities it implements. For example, the aspect of "innovation and people" can also cover the areas of development and training. AT table 1 examples of possible areas of assessment for different types of commercial and non-profit organizations are given.

Table 1. Aspects of evaluating the company's performance

Organization	Parties concerned	Aspects of assessment
Oil company	Shareholders Consumers Managers Environmental organizations Employees	Finance Consumers Business processes Ecology Staff
Political Party	Sponsors Voters Party members Apparatus workers	Finance Consumers Ideology Staff
Commercial research organization	Shareholders Customers Managers Scientific workers	Finance Consumers Innovation Staff
Hospital	Insurance companies Ministry of Health Patients Managers Doctors and medical staff	Finance Politics Consumers Business processes Staff

Selecting assessment metrics

In each aspect of assessment, the company uses a set of indicators that best characterize its progress towards achieving long-term goals. At the same time, it is the long-term goals and strategies of the company that determine the choice of the most appropriate indicators for evaluating the company's performance.

Here I would like to draw attention to the fact that an indicator is understood as a sign that in some way characterizes the activity, a kind of “symptom” by which one can judge the causes of what is happening. At the same time, each indicator is assigned a standard value that the company would like to achieve (sales of more than UAH 2 million per year) or would not want to achieve (the number of accidents at work is not more than five per year). In the course of carrying out its activities, the company measures the actual values ​​and compares them with the normative ones: the actual sales volume is 1.8 million UAH. per year, and the number of accidents is one. As a result of such a comparison, the company decides to change (or not change) its activities, determine new standard values ​​of indicators, or change the composition of indicators. AT table 2 examples of indicators for each of the aspects of assessment are presented. The list of indicators is open. The choice of specific indicators and the establishment of standard values ​​is determined by the field of activity of the company and depends on its strategic goals, as well as on the selected aspects of evaluation.

Table 2. Indicators for evaluating the company's performance

Aspect	Indicators
Finance	Return on invested capital, % Return on assets, % Sales revenue Profit Amount of costs Other indicators
Consumers	Number of consumers Market share, % Number of visits to consumers Consumer satisfaction index, % Other indicators
Business processes	Share of administrative expenses, % Production cycle time Equipment performance Labor productivity growth, % Other indicators
Staff	Personnel development expenses Number of teaching hours per year Employee satisfaction index, % Other indicators

Internal relationships between aspects of assessment

A significant innovation introduced by the BSC and distinguishing this system from other approaches to assessing the performance of an organization is the construction of clear cause-and-effect relationships that are established both between individual indicators and between aspects of assessment as a whole. For example, the company Halifax* (Halifax) developed the so-called Z-model, which allows linking the four aspects of evaluating this company ( rice. 2).

Rice. 2. Halifax Z-model

According to the Z-model, there is a causal relationship between the aspects of evaluation, which can be expressed by the following phrase: “If we have selected competent personnel and do business correctly, then our consumers will be satisfied, and we will expand our business.” This means that Halifax considers its people to be the foundation for building efficient business processes, which, in turn, are focused on customer satisfaction, which leads to superior financial results.

Similar to the links established between various aspects of evaluation, cause-and-effect relationships are also established between the individual indicators of the system. Moreover, the links between indicators are established both within each of the assessment areas, and between indicators located in different areas. As a result, the so-called system balance is achieved. However, the balance sheet is not limited to the harmonization of indicators.

The relationship of goals, indicators, tasks and actions

An important factor in the balance of the system is the relationship between the goals, indicators, tasks and actions of the company. To build such a system, it is very important to understand the specifics and purpose of each of these components.

Goals in the context of the BSC should be understood as a description of the future state of the company, preferably after a sufficiently long period of time, for example, 3–5 years. Indicators - those signs by which in the future it will be possible to determine whether the goal has been achieved. Tasks determine the ways to achieve goals, set directions for action. Well, the actual actions: what exactly should be done to solve problems, to achieve the standard values ​​of indicators, and, in the end, to achieve goals.

All these components make up a coherent system of cause-and-effect relationships and cover both all functional areas of the company's activities and all levels of the management hierarchy. It is the vertical and horizontal consistency of goals, indicators, tasks and actions that makes the implementation of the company's strategy a manageable process. In this regard, it is necessary to pay attention to the fact that it is the strategies implemented by the company that set the requirements for the structure and content of the BSC.

Linking the Balanced Scorecard to Strategy

Formulating the mission and setting long-term goals

Building a balanced scorecard is impossible without a clear understanding of the company's mission, requirements and restrictions on activities that determine possible and impossible directions for its development, long-term goals and strategies that are acceptable for it.

The mission can be thought of as a combination of four components:

• purpose Why does the company exist?
• strategy - competitive position and distinctive competence of the company;
• values What does the company believe in?
• standards of conduct - the policies and behavioral models that underlie the distinctive competence and value system.

These components determine the nature of the long-term goals that a company can set for itself. Graphically, the mission can be represented as a range in which both the company's goals and strategies for achieving them fit ( rice. 3).

Rice. 3. Constraints imposed by the mission on the strategies of the company

Long-term goals can be formulated as "doubling the value of the company by the end of the third year of operation" or "providing a 20% share of the European home appliances market in 5 years." At the same time, the deadline for achieving the goal and the value of the indicator, which will indicate the achievement or non-achievement of the goal (two-fold growth of the company or 20 percent market share), are clearly indicated.

Strategy formation

To achieve its long-term goals, the company implements strategies, regardless of whether they were clearly spelled out and communicated to managers and employees or arose spontaneously, due to changed circumstances in the external environment. It is important that the company implements only those strategies that fit within the framework of the mission, without violating the integrity of its image in the eyes of the stakeholders with whom it maintains relations at the moment and plans to maintain in the future.

Strategies here refer to the course of action that an organization follows in order to achieve its long-term goals. The actions themselves are selected based on the tasks that determine what, in fact, should be done.

Thus, a balanced system appears in a more expanded form, when each of the aspects of the assessment covers both goals and indicators, as well as tasks and actions that need to be taken to implement the company's strategy.

Here you can give an example of building cause-and-effect relationships from goals to indicators, tasks and actions. Let's say the goal in terms of customer relations is "increased customer loyalty", and the indicator is "repeat sales at the level of 38%". In this case, the task may be “improving the quality of customer service”, then the action is “introducing customer service standards” or “training staff to develop communication skills”. If you look closely at the actions, then "introducing standards" can be attributed to the aspect of "business processes", and "conducting training" to the aspect of "staff". It is the construction of a chain of cause-and-effect relationships between goals, indicators and actions within and between various aspects of assessment that makes it possible to make the system balanced. An important role is played by the so-called strategic maps - graphical interpretation of the identified cause-and-effect relationships, both between indicators and between actions taken by the company.

Implementation of a balanced scorecard

1. How is the process of implementation of the SSP organized? First of all, this is a separate activity of the company, in which top managers, directors, managers of key divisions and departments should be directly involved. There are several main stages of the implementation of the BSC:
2. Context analysis. At this stage, the company's competitive environment is analyzed and the company's mission is formed or revised.
3. Strategic analysis. The key aspects of evaluation are identified, the mission for these aspects is detailed, and strategic goals are set.
4. Corporate strategy cards. The sources of the company's competitive advantages are determined, a system of indicators is developed, cause-and-effect relationships are identified, long-term and short-term goals are agreed, and strategic maps are drawn up.
5. Strategic maps of divisions. The stage is devoted to the detailing of strategic maps to the level of units. In fact, this is a repetition of stage 3 at the lower management level, the identification of responsible executors, the setting of specific operational goals and objectives of the activity.
6. System implementation. Planning activities for the implementation of the system, building a monitoring system for the implementation and operation of the BSC and implementation itself.

However, there are many obstacles and traps on the way to the implementation of the BSC that make it difficult, slow down, and often make it impossible to implement a balanced scorecard in organizations.

Traps and obstacles

Organization's unpreparedness for implementation

Readiness for the implementation of the BSC consists of several components. First of all, it is necessary that the organization really needs it. In a small company, where senior management is personally acquainted with each employee and can control his actions, where all processes are visible at a glance, there may not be such a need.

The second factor that determines a company's readiness for implementation is its "maturity". A company that has already established regular management can be considered ripe for implementation, in which at least the organizational structure is formalized, there is a staffing table and job descriptions. Another point that positively characterizes maturity can be considered the existence of procedures for planning and budgeting activities. The absence of these elements significantly complicates, and often makes impossible, the successful implementation of the system.

Organization political system resistance

Like any organizational change, the implementation of the BSC affects the vital interests of the managers and staff of the organization. Strengthening control over activities through the use of BSC can be perceived as a negative motivational factor, which often leads to increased tension in the team, the emergence or aggravation of conflicts.

BSC, as a method of performance management, is often closely related to the reward and motivation system. This makes the implementation of the system a political process in any company, because it leads not only to the redistribution of resources allocated to the activities of various departments of the company, but also affects the personal well-being of managers and ordinary employees. Therefore, implementation procedures must be planned taking into account the time and effort that will have to be spent on overcoming resistance to change.

The mentality of managers and staff

Another obstacle to the implementation of the system is the way of thinking adopted in companies. First of all, we are talking about senior managers, those who make strategic decisions, including those in whose interests the system is often implemented.

Like any tool of Western management, the BSC is often perceived as an unnecessary conglomeration in a coherent domestic management structure. There are doubts about the usefulness of conveying the strategic vision of senior leaders to the lower levels of managers and performers. The closeness, elitism of top management does not allow for the very vertical integration from strategic goals to operational actions, which the balanced scorecard is aimed at creating.

In conclusion, I would like to note that the BSC is now perceived not so much as a system for evaluating the performance of companies, but as a tool that allows you to implement strategies. In this regard, the question arises of the need to formalize many processes in organizations, which in itself cannot but have a positive effect on the current activities and long-term competitiveness of domestic companies.

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* Halifax Public Company by 1999 had £154 billion in assets, 36,000 employees, 800 branches, 500 real estate offices and 900 agencies. The main activities are mortgage lending operations for the population, consumer lending, personal insurance, storage of long-term savings and valuables of citizens.