Balance Scorecard Theory

STEP 1: Set goals for your business that revolve around more than sales or profits.

Most organizations monitor sales or profits but do not monitor critically important factors such as number of new enquiries, product returns or credits, conversion rates, whether your employees and customers are happy etc. Monitoring non financials areas helps you to improve your performance.

STEP 2 : Mark on the scorecard each month how you performed.

In each area of the scorecard write down comments so that you can review past performance.

STEP 3: Each month review your Obstacles and Successes.

Each month you should get your staff together and review what you did well and what you did not do well. You should try and take immediate collective action to improve your poor performance areas.

STEP 4: Set monthly action plans & initiatives in each of the four quadrants.

List your initiatives and then communicate them to your people. Have each manager or division develop their own scorecard. Cascade down the organization.

How will you increase your sales tomorrow?

What sales, advertising, marketing and customer initiatives will you implement this month?

How will you keep sales up in 3-24 months time?

You will need to make sure you have the right products and people for the future, therefore what are your product development and employee morale, employment and training type initiatives that needed to be completed this month to improve your business in the longer term.

What profit improvement or expense reduction initiatives will you work on?

Cost cutting measures, stop price discounting, raise average value sale etc.

What systems and processes will you improve?

Improving dispatch, reviewing your couriers, your accounts or your customer databases.