In the last blog, we have discussed two perspectives namely Financial Perspective and Internal Process perspective out of four perspectives of BSC. let's look at the remaining two perspectives.
We all know that the 'Customer is the king of market' and that's why we need to ensure that we have satisfied customer Group in Market.
Each organization serves a specific need in the market and this is done with a target group in mind, for instance, the Quality, Price, Service, and acceptable margins on the products and/or services.
The organization always try to meet customers' expectation in the market and that's why any organization need to keep eyes on the market and ready to adapt changes quickly.
The existence of alternatives( competitors ) has a huge influence on customers' expectations and we need to focus on overall market trends to build satisfied buyers in the market.
This perspective answer the question:
"How attractive should we appear to our customers?"
In short we need to focus on three points-
- Target Group in Market
- Expectation of the Customers
- Our Competitors
- after focusing on these points definitely, we will able to lure maximum potential customers in the market.
Learning and Growth Perspective:
In today's comitative era, if we are not ready/capable to learn something new then it's next to impossible to survive in the market as 'nothing is constant only the change is constant ' Here the only knowledge is not important but advancing knowledge plays a vital role. The organization's learning ability and innovation indicated whether an organization is capable of continuous improvement and growth in a dynamic environment. The dynamic environment subject to change on daily basis due to new laws, economical changes, technological changes, or even increasing competition.
This perspective answer the questions:
"How can we sustain our ability to achieve our chosen strategy ?"
To know more about the BSC please read my upcoming weekly Blog.
In the last Blog we have discussed the basics of BSC, let's start a discussion about four perspectives of BSC.
A Balance Scorecard looks at an organization from four different perspectives to measure its health, each of these perspectives focuses on various sides of the company and creating a balanced view of the organization.
And yes all four areas of BSC are interrelated we cannot ignore any out of four to the success of the organization.
This perspective views organizational financial performance and the uses of financial resources.
We need to focus on two points:
- Is the company achieving its financial goals?
- How well the strategies and operations contribute to improving financial health?
Well, now the question is how we can measure the output of the financial perspective?
these data always past focused, we need to gather two types of data.
- Historical Data: How did we do last month, last week, last year, and so on.
- Current Data: How we are doing right now, Today?
- our net profit for the year versus last year
- Our sales revenue this year versus last year
These measures of corporate performance are based on history and also vary from organization to organization.
As the BSC is holistic approach, any key objectives that is related to company's financial health and the performance may include in this perspective as given below:
- Cost Saving and Efficiencies [Specified Goals: Reduced production cost 10% by 2021]
- Profit Margins [increase operational profit Margins]
- Revenue Sources [adding new revenue channels/department/products]
In the end,
- Are you making money?
- Are your investors happy?
If yes then be happy...
The financial health of your organisation may be the indicators of your past decisions but still incredibly important.
' Money keeps the company alive ' and the financial perspective focus solely on this.
Internal Process Perspective:
This perspective views various organizational processes and the efficiency of the particular process.
- from this view, the question should be asked what internal processes have added values within the organization and what activities need to carry in the organization (In all three perspectives).
- The internal Process perspective looks at how smoothly your business is running (Here, Efficiency is important )
- It's all about,
- Reducing waste,
- Speeding process/ production
- Doing more with less
We need to focus on three points:
- Is the company improving the critical process?
- Are there any obstacles standing between ideas and execution?
- How quickly you can adapt to changing business conditions?
This perspective answer the question :
"what process we must excel at to satisfy our shareholders/financial Backers and customers?"
To know more about BSC please read my weekly Blog.
What is a Balanced Scorecard (BSC)?
- A Balanced Scorecard is a performance metric used to identify, improve, and control a business's various internal processes and resulting outcomes.
- Balance Scorecard is a framework to implement and manage strategies.
- The Balance scorecard is derived from the idea of looking at strategic measures to get a more balanced view of performance. The concept of a Balanced Scorecard evolved beyond the simple use of perspectives, every business can implement it according to the requirements and therefore it is a holistic system for managing strategy.
Why do we need to implement it?
- The key benefit of using a BSC framework is that it gives way to the organization to "Connect the Dots" between various components of strategic planning and management and it means there will be a visible connection between Projects and Programs that people are working on it.
- BSC framework also helps management to meet pre-decided targets.
Perspectives of Balanced Scorecard:
- Internal process
- Learning and Growth
- Periodic Interview
- Attitude Measurement
- Opinion Analysis
- Morale Indicators
- No. of accident
- Use suggestion Box
- What’s Employee Morale?
- Characteristics of Employee Morale.
- Relation between Morale & Productivity.
- Psychological concept
- Dynamic Nature
- Group phenomenon
- Reflect others
- lack of proper training,
- Lack of support by co-workers or leader,
- leaders/Superior behavior with him,
- Irresponsible Management (If we talk about It or another small service sector Irresponsible HR )
- Ineffective Supervision
- Restrictive norms of the informal group
- Outdated Technology & Methods
- fear of losing a job,
- less availability of alternatives
- Strict Supervision, Rules & Regulations
- Policies and strategies focus on high productivity only.
- Lack of motivation
- Unclear Job role
- Lack of harmonious Superior-Subordinate relationship
- Factor determining morale
- Significance of high morale
- Impact of low morale
- Measurement of morale
Organisational Culture is an aspect that impacts every organization’s functioning. Keeping in view the vital role that plays in the success of any Organisation. I would like to mention the desired culture is the “OCTAPACE” Culture.
“OCTAPACE” culture is the best initiative for any Organisation, whether it’s an IT or Non-IT organization.
Let’s look at- what is “OCTAPACE” culture? How will it be helpful to Organisational Growth?
|O - Openness||
|C - Confrontation||
|T - Trust||
|A - Authenticity||
To recapitulate, Organisational culture represents Values, Beliefs, behaviors & Capabilities acquired by the members of the firm. We can truly say if the Organisation has all Dimensions of “OCTAPACE”, it is on the way to SUCCESS……….