So here are two ready-to-use motivation ideas for any business:

Nothing Motivates like Results! There is no better way to motivate people than with great results achieved quickly.  If someone in your company implements the Balanced Scorecard and achieves great results, they will happily continue using this system—and they will spread the word about it to other departments.  So, implement the Balanced Scorecard first in departments or business units where it will be easier to create indicators, get feedback, and produce measurable results—for instances, sales and marketing.

and the second one is:

Organizational Incentives. You can also motivate your employees by offering them special, organizational benefits.  Perhaps your company has a process in place that allows employees to work remotely.  You could link this opportunity to the Balanced Scorecard.  For instance, announce that if an employee successfully migrates to the Balanced Scorecard within the next month, they will be allowed to work remotely from home.

You will learn more in the eTraining: Motivating for the Balanced Scorecard.

1. Evaluate the assets and liabilities: You must be following a business balance sheet and in such a situation you need to evaluate the liabilities and assets from the balance sheet. All this will include the amount of capital that has been already been used in the business, how much amount the business still owes to the creditors and also the amount that the debtors owe you. This way you can easily determine the value of the goodwill that your business organization has earned to date.
2. Analyze the cash flow: You must review the cash flow that has been accessed to operate and the financial activities. The effects of all these activities can simply be understood through the expenses and the income from the statement of the income. You may also compare the performance of the organization to check if the budgets and the forecasts are effective.
3. Compare the debtor and the creditor dues since the past: If you want to measure the credit history of your organization, you need to compare the creditor and the debtor values over the past. You must make sure that the debtors pay on time so that there are not many dues that can take a toll on your personal finances. There must be healthy cash circulation so as to better the business performance and you must also keep making the payments to your creditors.
4. Check the customer satisfaction level: You must check the satisfaction level of the consumers by checking all the complaints and the reviews of the customers and the end users. If you have enough consistency and you can deliver good quality performance, you can improve the reliability and this will measure your business performance in an exact way.

Therefore, if you’re interested in measuring your small business performance, make sure you follow the steps mentioned above. Based on the measurement, try to improve the performance and satisfy your consumers so that you can boost your returns and make your business flourish.

Author’s Bio: Martha Jackson loves to write financial articles and she is a contributory writer associated with the Debt Consolidation Care Community and has written several articles on debt consolidation, debt settlement and get out of debt for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles. Please follow us here: http://www.facebook.com/debtconsolidationcare.

There are various reasons for BSC failures.  One of the most common mistakes is perception of balanced scorecard as of some magic tool that can solve any business problems.  Some managers view balanced scorecard as a project which has its start and end date.  In fact balanced scorecard is a continuous process.  It is either implemented and becomes a part of company’s everyday life or it is use in an inappropriate way.  In such a case balanced scorecard becomes the most expensive managerial tool.

How to prepare for BSC implementation

Some companies have reported to use balanced scorecard as a extensive database or an accounting tool.  The reality is that balanced scorecard should initiate changes in the company.  Implementation of balanced scorecard starts with discussion.  One of the most common mistakes is that this discussion is held on the top level of the company only.  Of course, without any doubts, top managers are experts and strategic management, and they know much about markets the company operates in.  But the power of balanced scorecard is ability to transfer strategy into action and that’s why it is necessary to communicate strategic and operational management, this is where heads of departments and even ordinary employees can help, and that is the reason why they should participate in discussion of balanced scorecard.

Most common BSC mistakes

Sometimes discussion of balanced scorecard is restricted to the first seminar or presentation of balanced scorecard project and strategy maps to the company personnel.  Employees start to think that this is just another unnecessary control tool that will require them to spend their time and efforts.  Such use of balanced scorecard equals to lying to yourself.  BSC will never work unless every employee in the company is properly motivated to use this tool.  Company personnel should be aware of their contribution to implementation of strategic goals.  And do not forget about proper motivation since employees must have their reasons to use balanced scorecard.

Formation of BSC teams that will initiate discussion of balanced scorecard and development of strategy maps prove to be one of the most important stages in BSC implementation.

Just imagine a house with a poorly build foundation.  Sooner or later such a house will inevitably collapse.  The same concerns balanced scorecard.  Once the company top management starts making the wrong steps they are doomed to fail.  So, what is the first step in implementation of balanced scorecard?  First and foremost it is imperative to get personnel involved in discussion of balanced scorecard and then in implementation of this system in the company.

What makes an effective BSC discussion?

It sometimes happens that company top management hires external advisors, forms a working group which consists of external advisors and top managers of business owners of the company, develops strategy maps, and then presents them at the seminar or a meeting.  And that’s it!  They think the work is done.

In such a case ordinary personnel of the company does not understand why they should use balanced scorecard.  There’s few of them actually know something about balanced scorecard.  In the worst cases, employees view balanced scorecard as another system to control them.  As a result of this causes resistance and opposition.  Strategy maps will become useless drawings as they will never come down from the top to the level of ordinary employees.  One should remember that implementation of balanced scorecard is quite expensive, and it requires much time and efforts of personnel.

Create an effective BSC working group

That’s why when starting discussion of balanced scorecard and strategy maps it is vital important to get ordinary personnel involved.  Everyone in the company should have his own opinion on balanced scorecard, and maybe some suggestions as to company goals and strategies.  Of course, external advisors possess very valuable knowledge and experience which may and must be used in implementation of balanced scorecard.  But ordinary employees know everything about company customers, current problems inside the company.  Most of them have their own suggestions on use of IT solutions, optimization of business processes etc.  The company is the people who work there, and implementation of balanced scorecard is much about acceptance of this system by most of the personnel.

Sometimes, business owners and top managers think of balanced scorecard as of some magic tool.  That’s why they don’t consider it necessary to get personnel involved in strategy development.  Moreover, company management imposes a strategy from top to the bottom.  It often happens that top management of the company or business owners do not know everything they should know about company customers, current problems inside the company etc.  But ordinary employees, front line managers and sales people meet with customers every day.  They spend the entire working day in office and thus they know what can be improved to have higher performance.  That’s why many creative ideas and suggestions come from the lowest level of the company.

If personnel either doesn’t understand strategic goals or rejects them all attempts to implement balanced scorecard in the company will fail.  Moreover, very often employees consider balanced scorecard to be just another tool to control their work.  This causes resistance.

Balanced scorecard should become philosophy for the company.  Once the company manages to make a successful use of balanced scorecard there is no way back.  It is possible to say that balanced scorecard is implemented once and forever.

Many companies think they are using balanced scorecard in a proper way.  On the one hand it would be wrong to say about wrong ways of BSC use.  But it is not very reasonable to use balanced scorecard as Accounting System or a system of managerial control.  It was designed to be something bigger for the company.

When motivating personnel, it is important to introduce a clear motivation system.  If you think that financial motivation is the only available option you are mistaken.  There are many nonmaterial rewards that will encourage high performance of individual employees.

Keep in mind that rewards must be paid both for achieved results and for something that was done to achieve such results and future.  At the same time one should keep balance of rewarding for lagging and leading indicators.  For example, if sales manager receives reward for number of made calls he may forget about the sales themselves.  At the same time making the maximum number of calls to customers is very important as it usually results in sales growth.

The wrong use of balanced scorecard and implementation of in comprehensive reward system will make any companies suffer enormous losses.  Balanced scorecard received a huge portion of criticism and many of the critics are top managers and business owners who made serious mistakes in BSC implementation.

Reward system will drive company to success

But is it enough that only top management believes in balance scorecard?  Of course not!  Successful implementation of balanced scorecard implies involvement of ordinary personnel.  Moreover, employees it all company levels must to dissipate in development of strategy and strategy maps.  This is explained by the fact that, for example, front line sales managers have the most complete information on company customers, there requirements, conduct patterns, demands, new trends in the market etc.  These people are so much closer to the real business world than top managers and their high offices.

But how to get ordinary personnel involved in development of strategy maps and maintenance of balanced scorecard?  Employees must be motivated.  That’s why successful use of balanced scorecard implies introduction of a comprehensive and fair reward system

Financial and non financial reward types

Employees must be financially interested in higher performance.  Better BSC results should bring benefits for employees.  For example, a sales manager should know how his job contributes to implementation of company strategic goals, as well as how his performance can affect his salary.

It should be noted that reward and bonus systems can have nonmaterial character.  For example, top performing employees may be offered free learning courses, participation in any interesting business seminar, additional day offs etc.  Experience shows that nonmaterial rewards a greatly valued by employees.

It is also very important to reward employees for their contribution to implementation of strategic goals but not only for improvements and Balanced Scorecard perspectives.  For example, number of calls made to customers does not automatically mean sales growth.  Thus, it would be logical to encourage employees for increased in sales but not for their attempts to improve these results.

Get yourself swot analysis guide

Nowadays there exist a great variety of strategic management tools.  Some of them have rather theoretical nature while others urge companies’ top management for action.  The well-known Balanced Scorecard System has proved to be one of the most effective strategic management tools, but at the same time can be used in combination with other methodologies of strategic management.  SWOT analysis is a popular method of defining strategic goals through evaluation of current condition of the company.  SWOT stands for strengths, weaknesses, opportunities and threats.  These are the most important aspects for the company.

AKS-LABS has released a new product – SWOT analysis guide which will be helpful learning material for top managers, strategic planners and all those who are interested in the issue of strategic management and SWOT analysis in particular.  This package includes templates on SWOT analysis and balanced scorecard.  You will learn that these two strategic management tools can and should be used in combination.  Besides there is a comprehensive SWOT analysis guide which offers much valuable information on this methodology of locating company strong and weak points.  You’ll also find answers to the most acute and burning questions about SWOT analysis.

SWOT analysis guide is available in free and paid versions.  Get the free version from this page or purchase the full version here.

That’s why, strategic goals and future vision are very important for any company operating in a highly competitive environment.  Strategic vision is about forecasting and predicting possible problems and obstacles.  Future vision is about outwitting of competitors.  It is a real art to solve problems even before they occurred.

Any organization faces two challenges: evaluation of current performance and communication of strategic management with operations.  It is very important to know that the company is doing the right things to reach strategic goals.  Moreover timely introduction of changes to the strategy, goals and measures will make it possible to correct mistakes before the lead to negative consequences.

BSC implementation stages

Balanced scorecard is a must have tool for any organization pursuing strategic goals.  Through evaluation of key performance indicators balance scorecard will tell much about past and future events for the company.  Financial indicators characterize something that has been already done, while nonfinancial ones will tell pretty much about what will happen in future.  Evaluation of intangible assets and nonfinancial indicators is the greatest advantage of balanced scorecard.

Major BSC mistakes

Key performance indicators are grouped in four categories: financial, customer, internal business processes, learning and growth.  Every category characterizes key success factors in the internal and external environment.  Customer category includes goals and measures related markets and relations with customers, while internal business processes category answers the question “how will keep our customer satisfied?”

Balanced scorecard can be used in two ways: as a performance management tool and as a system of strategic planning.  In its first function it will easily measure business and its product in a tea, locate problematic areas and weaknesses etc.  In the function of the strategic management tool balanced scorecard has no competitors.  This tool if you buy the most successful world companies.

The process fo BSC implementation

What are advantages of balanced scorecard?  They go as follows:

1. Balanced scorecard communicates operational and strategic management.  It often happens that company’s decisions, actions and measures have nothing to do with the strategy.  Company management thinks that they are approaching strategic goals, but in fact the company is sinking.  Balanced scorecard provides a clear strategic map with clear cause and effect ties and relations between goals and measures.  Such strategic maps are understood even for ordinary employees with little experience in strategic planning.
2. With the help of balanced scorecard it is possible to educate personnel.  Statistics show that more than 80% of managers do not participate in strategic planning or have wrong concepts and interpretations of company strategy, say apart of ordinary employees.  With the help of strategic maps company strategy will be understood at all company levels.  If every employee in the company understands his own contribution to implementation of strategic goals the company has all chances to succeed.
3. Balanced scorecard makes it possible to introduce amendments in changes to measures and goals which makes this system rather flexible and mobile.  As markets are very changeable these days, external changes should lead to changes inside the company.  Having balanced scorecard implemented in the company, it is possible to correct measures and objectives in order to implement strategic goals.

Advantages of BSC

At the same time, balanced scorecard has certain requirements and rules which need to be observed.  Various mistakes made by top managers lead to failure to successfully implement balanced scorecard.  This explains huge portion of criticism in regard to balanced scorecard.  Remember, that balanced scorecard it just a tool in hands of top managers and business owners.

The four BSC perspectives

But it is not reasonable to evaluate performance of a company apart from its strategic goals.  In other words the company may do certain things that have nothing to do with its strategic vision.  So, why evaluate such performance?  There is no sense in it.  But with appearance of Balanced Scorecard System this problem has been solved.  BSC is not only an extremely effective tool to evaluate current, past and future performance of the company, but also an excellent way to communicate strategic and operational management.

It has been estimated that about 80% of managers do not directly participate in strategic planning.  Moreover, some of them do not understand the concept of the strategy on may have own interpretation of strategic vision which may not coincide with a genuine strategy of the company.  This is where Balanced Scorecard helps.  It visualizes the strategy and makes it clear even to the lowest level of company management.

What the choice of wrong goals results in

Balanced Scorecard consists of four categories of indicators called perspectives: financial, customer, internal processes, of learning and growth.  These perspectives consist of indicators that represent most important key success factors for the company.  Moreover, every indicator has a direct impact on the company total performance evaluation.  Thus, by looking at the scorecard a top manager can see what prevents the company from implementation of strategic goals.  Balanced Scorecard is a great tool to find weak points.

However, very often companies failed to implement Balanced Scorecard, and one of the most common reasons for that is lack of comprehensive strategy.  It’s impossible to drive to the right destination if the wrong goals were set.  Also, it is unacceptable to confuse Balanced Scorecard and the strategy, since BSC does not substitute the strategy.  That means that strategy development must be still performed by people.