You need a balanced approach to management in order to obtain great business results. Why? You need it because your organization will have multiple goal categories, goals and action steps. The flawless execution of these action steps will result in a loyal customer base. The end result will be more sales and profits. But how do you keep it all on track?
The Balanced Scorecard, in my opinion, is the best way to stay focused on all of the organization’s goals and keep your staff on track too. Very simply a balanced scorecard is an ideal form of performance measurement. The business leaders identify a small number of financial and non-financial measures and attach goals to them. When the results are reviewed it is possible to determine whether current performance 'meets expectations. By alerting managers to areas where performance deviates from expectations, they can be encouraged to focus their attention on these areas. The result will be improved performance within the department or the organization.
So that is the description. Now let’s see this in action. I will use a restaurant company as an example.
What attracts people to eat at a restaurant? It starts with great food. But people really keep coming back because of the total experience of visiting that restaurant. That experience includes tangibles and intangibles. For starters, to quote from the TV show Cheers, you want to go where everyone knows your name and they are always glad you came. You want the restaurant manager to be like Sam Malone of Cheers. What else? Well you want the restaurant to be clean and you want it to have safe food handling practices. You want a friendly and attentive server and you want to know that he or she is passionate about serving you.
What does restaurant management want? It wants a profitable restaurant. It wants dependable employees in the kitchen and serving guests. It wants less food waste by cooking to recipe and by servers taking the guest orders correctly. It wants no food cleanliness violations anywhere. It wants a stable trained staff with reduced turnover.
Those are a lot of things to manage but managing them well will lead to a profitable restaurant with a growing number of loyal guests. There are a number of critical goal categories and a whole set of goals for each category.
Now let’s use the balanced score card to made sure that managers and staff stay on target. Our balanced score card will measure the following: Sales, Profit, Food Cost, Food Safety, Cleanliness, Employee Engagement Score, and Guest Engagement Score.
Using this approach to goal achievement will insure that all the drivers of results are considered. Without the balanced scorecard the manager may focus only on profits to the detriment of other areas. Finally, if you develop a compensation and bonus plan based on the score card you will operationalize it and your staff will internalize it.
Learn how we can help you use a balanced approach to drive results for your team.