Monday 21 June 2010

Balanced Scorecard

Balanced Scorecard WhiteImage by Jinho.Jung via Flickr
I've spend a fair share of my life as a consultant. Management consultants usually have a bag of tricks and recipes for every possible situation that can happen in business. Unfortunately mostly for large corporations (they can pay!) and not startups.

However  there are ways to adapt them and make sense of it. Let's look at the Balanced Scorecard. It's a strategic performance dashboard where you track your strategic performance through time. The idea is to  mix quantitative and qualitative KPIs onto one sheet.

The Scorecard is divided into four sections:
- Financial: how business perform
- Customer: how customers see us
- Internal: how our processes run
- Growth: how do we improve

For each section decide on 3-5 KPIs that measure respective aspects and indicate important aspects of your business. I.e. for the Customer section you can measure retention, pageviews and similar. For Growth you can watch sales pipeline, investments in education, number of programmers using your API and others stuff that makes your business  better and bigger.

When you set it up, you can than observe changes on various aspects of your business in time and see where you have to put more emphasis in your business and where you excel.
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