In the modern world, there is so much information and so many ideas about how you should run your business and what the latest innovations are and where your focus should be. There is so much information around and so many people prepared to offer advice that it can be easy to get swayed strongly in one direction and forget other important aspects of the business – it reminds me of a dream (or nightmare) I used to have where I was feeling really good at a business meeting only to look down and find that I had no trousers on (thankfully this has never happened in reality).
Nearly two decades ago, two doctors named Kaplan and Norton evolved a system known as the balanced scorecard. Prior to this, most organisations put in place performance targets that related solely to the financial aspects of an organisation.
A balanced scorecard approach generally has four perspectives:
• Internal business processes
• Learning and growth (human focus, or learning and development)
Each of the four prospective is interdependent – improvement in just one area is not necessarily a recipe for success in other areas. To grow the success of your business, you need to be improving in all of these four areas. The balanced scorecard approach can be shown as follows:
Taking a balanced approach to monitoring your business will reduce the chances of you excelling in one area but being caught with your pants down in another!