The Balanced Scorecard
StratNavApp.com uses the balanced scorecard as a framework for organising goals that highlights their different natures and the relationships between them.
The balanced scorecard framework divides your goals in a business strategy into four perspectives.
- Financial goals are about how you create value to satisfy shareholders and invest in future opportunities.
They answer: what does success look like to the owners of the organisation?
- Customer goals are about what your customers want and value.
They answer: What does success look like to the customers of the organisation?
- Internal Business Processes goals are about getting better at what you do.
They answer: What processes does the organisation need to improve in order to deliver the customer and financial goals?
- Learning and Innovation goals are about building the capabilities you will need to improve your business.
They answer: What capabilities does the organisation need to be able to thrive and to be able to continue to improve and adapt in the face of a changing and competitive environment? Also, what does success look like to the employees of the organisation?
There is an implied cause and effect relationship between the four perspectives.
- Achieving your Learning and Innovation goals should enable you to achieve your Internal Business Process Goals.
- Achieving your Business Process goals should enable you to achieve your Customer goals.
- Achieving your Customer goals should enable you to achieve your Financial goals.
How many goals should an organisation have? An organisation should have 2 to 5 goals in each of those four perspectives. This means that an organisation should have 8 to 20 goals in total. Hint: Aim for somewhere in the middle of that range.