Make no mistakes in goal setting
Balanced scorecard has gained tremendous popularity among top managers and business owners seeking to optimize performance of the company and making greater profits. However, is not easy to make initial steps. First and foremost, one should set strategic goals for the company otherwise use of balanced scorecard makes no sense at all. Sure, it seems easy to say: “I want my company to earn $10 million this year.” At the same time, such a goal should be supported by relevant business plan. Moreover, the company should choose the path and priorities in implementation of strategic goals.
BSC implementation success factors
Some business owners pay very little attention two goals setting. They focus on innovation, human resource management, internal processes, relations with customers etc. But all this will be in vain if the company set unachievable or unrealistic goals. Of course, financial goals are most important. But in order to achieve financial results much needs to be done with intangible assets. One should answer one question: “How will I earn $10 million?” The answer should be quite clear. If it turns out that annual profit of 10,000,000 will mean increasing of market share up to 30% while a company occupies only 3% now, such a goal cannot be achieved. This is just a hypothetical example to illustrate importance of correct goal setting.
What are strategic goals?
It is especially important to set the right strategic goals when using balanced scorecard as BSC is a strategic management tool. If there is no strategy there will be no action. Of course the company will move forward but that maybe not the right direction for it.
As known, balanced scorecard uses evaluation of key performance indicators which are chosen based on the company strategy. So, the run strategy will result in the wrong choice of key performance indicators. In such a way the company will waste much time and money without having any positive results.
Strategic goals should answer the questions about possible problems and obstacles on the company way to implement them. Strategy is partially the vision of the future. The wrong vision will result in massive losses.
Measurement of business is important as in such a way the company may measure progress on its way to strategic goals. If you make the wrong first step the entire way will be wrong.
Goal setting is a real art, of so make sure you choose the right strategic goals for your business to achieve success.
