Business Management Blog

Most companies find themselves in a situation where they don’t know what they don’t know, but even the ones with an adequate understanding of the problems are stumped when they consider where to begin fixing them. For this reason, performing a rigorous self-assessment is the first step toward helping you move into the next phase of the continuum. It is also the first step before you can effectively launch any restructuring effort because you must examine how well your business is functioning today against best-in-class (BIC) benchmarks.

An objective assessment using output metrics from your processes offers a complete view of your company’s health, assuming the metrics directly link to your strategy. If they don’t, you may be measuring the wrong things. A strategy road map that is linked to a balanced scorecard is the tool BIC companies use to monitor the state of their business. If you are missing one or both, or if they are not linked, you need to create them as soon as possible! If you have both but the balanced scorecard does not roll up to the strategy, you need to align them.

A strategy road map usually has five elements that are common to most companies. You can have more elements, but make sure they are truly things that are critical to your business. If you are not willing to put the effort into tracking an element, then it must not be absolutely critical to the running of your company. Even manual monitoring is better than nothing. The five common strategic elements are:

1. Improve operations quality and efficiency.
2. Grow through innovation and technology.
3. Increase customer satisfaction and retention.
4. Improve financial performance.
5. Empower the organization.

Within each of the strategic elements listed, more specific actions need to be implemented to impact the outcome. These actions are measured, and they are what make up the balanced scorecard. For example, a balanced scorecard action that would impact the first item, improve operations quality and efficiency, could be to become certified by the International Organization for Standardization (ISO) at all the manufacturing plants in the company or to make enterprise resource planning (ERP) the standard platform across the company. These changes are very easy to measure and track, and they clearly tie to the strategic element of improving operational quality and efficiency.

Another way to improve operational efficiency is through the use of systems and improved service from information technology (IT). This is where an IT balanced scorecard at the subprocess level is critical to meet the balanced scorecard action of improved service from IT.

A balanced scorecard action that ties to the third strategy road map element, increase customer satisfaction and retention, might be: Provide on-time warranty service personnel. For example, customers might say they are willing to wait up to 15 additional minutes after the scheduled time of service. If someone does not arrive within the 15 minutes, the metric would indicate that they were not on time, therefore impacting your customer satisfaction level. If you are able to provide personnel to a customer location for warranty repair or service on time, your satisfaction levels will increase, and that in turn will drive customer retention.

Our final example of a balanced scorecard action that ties to a strategic road map element is something that not all companies feel is important but is actually what differentiates great companies from good companies. It falls under the fifth strategic element, empower the organization, and involves the training and development of employees. Having a balanced scorecard action to “Provide the best training programs so our employees can be empowered,” for example, goes a long way toward quicker decision making and employee-driven process improvements.

This action could have projects under it that detail the types of training necessary to allow the employees to be empowered. For example, technical training empowers the employee to be a better service technician. Another project could be to train personnel on change acceleration program (CAP) and facilitation skills, which gives them tools to act in an empowered way.