E-learning : Introduction to strategic scorecards

Strategy : is about an organization making choices about what it will do and., equally
important, about what it will not do

The strategy is formulated through :

• A mission statement : it defines the purpose of the organization or why it exists. It
answers the questions "What basic need do we fulfil?" or "What is our specific field of
action?"
• A vision : it expresses the desirable state in which the organization wants to find itself
in the long term.
• A strategic plan : this vision is translated into long-/mid-term objectives and plans of
action.

Performance measures need to show different dimensions if performance, in line with the
organization’s strategy.
Organization’s success increasingly depend on their intangible assets.

Scorecard : is a multi-dimensional measurement system that reflects a balanced, long-term

view of performance and facilitates strategic decision-making.

- Multi-dimensional: A scorecard shows the key dimensions of performance, and not

exclusively the Finance one. The definition of what the dimensions of performance are
varies from one scorecard to another.
- Long-term view of performance: The purpose of the scorecard is to anticipate the
variations of performance in order to take action before it decreases too much. So, a
scorecard should combine result (lagging) indicators and means (leading) indicators.
- Strategic decision-making: A scorecard is a management tool, designed to help make
quick and informed decisions. A scorecard is aligned on an organization's strategy and
gathers the key strategic priorities of the organization. It should remain synthetic in order
to show only information that is crucial to the achievement of the strategy.

The roles of scorecards :

Key principles in elaborating scorecards :

The different types of scorecards

 SESSION 6 : THE BALANCED SCORECARD (BSC)

I- THE BALANCED SCORECARD

The BSC links performance measures to the strategy. It is a tool of clarifying, communication
(internally and externally) and steering the strategy.

II- THE 4 PERSPECTIVES

The 4 perspectives
Organizations’ performance can be divided into 4 perspectives :
Performance measurement

Examples

III- THE STRATEGY MAP

Cause-and-effect relationships
 • The BSC assumes cause-and-effect relationship btw the obj and each perspective
• Each obj is an element from a chain of cause-and-effect that shows how the strategy
should be achieved
• These cause-and-effect relationship are shown in a Strategy Map
- The strategy map helps to visualize and communicate how value is created by
the organization
- It allows to identify inconsistencies in the strategy

An example of a strategy map

IV – CONCLUSION

Advantages and Criticisms