Since the inception, a Balanced Scorecard has gone through many changes. Depending on the requirements, organizations like schools, public sector companies, private sector organizations, hotels, banks etc., develop the scorecard. The main perspectives that need to be focused on while structuring are financial perspective, customer perspective, internal business processes perspective, and learning and growth perspective. But the biggest mistake done by managers is they focus on all the areas separately, whereas all the perspectives need to be interconnected and only then strategies can be formulated.
A Balanced Scorecard can be effectively constructed by following step by step procedure. Firstly, unit managers need to look into the strategic planning that revolves around the organization’s present and future potentials. The strategic plans should be designed keeping in mind the objective of the organization and also the expectations of the shareholders and creditors. To retain the shareholders, who have unlimited choice of investments in this competitive world, giving them time to time returns on their investments is important. Not just stake holders retaining customers and employees are also important as they have numerous choice to fulfill their wants. By keeping all this in mind choosing the areas of measuring is the next step. Deciding what needs to be measured and setting goals according to the capacity of the organization can be the initial step in structuring a balanced scorecard. Now that the managers are aware of their goals are their current capacity, they should choose the right platform for measuring and improving their organization.
As already mentioned stakeholders, customers and employees’ satisfaction are the most important areas that the managers need to look into. The organization must identify their key requirements and accordingly set their strategies. If an organization focuses on only income driven policies, they can only satisfy their shareholders by giving them timely returns, but the customer values get affected. Providing quality product at lower prices is required to stay in competition and retain customers. And for employees better working ambience with technological advancements can not only boost their confidence levels but also increase output per head. So the company needs to frame policies by using the right methods, keeping all these aspects in mind. Constructing tables depending on each and every requirement aspect can help an organization decide which area they are good at and which area needs improvements. A Balanced Scorecard needs to have these aspects clearly mentioned to be useful.
A Balanced Scorecard needs to be facilitated with the right measures in all the perspectives i.e., financial solutions for financial perspective, customer related solutions for developing customer perspective, internal growth perspective, and technological solutions for learning and growth perspective. All these aspects need to be taken care of and strategies should be designed keeping in mind, the strengths, opportunities, weaknesses and threats for the organization. Because the world has become a Global village, knowing the right policies can help in expansion of business and set them up for long term gains. The main purpose of a balanced scorecard is to help organization achieve short term profits and long term gains. This can be facilitated by building it in the most effective way keeping all the factors into consideration.