Select a service industry organization of your choice. Complete the following for the selected organization:
•Recommend at least two performance measures in each of the balanced scorecard categories.
•Explain each of your recommendations.
•Using these measures as examples, explain how use of the balanced scorecard can increase the economic value added within the organization.
When a company implements a balanced scorecard approach, it's an investment of its time and efforts to marry traditional measures with more qualitative insights; the numbers can never tell the whole story: you need both quantitative and qualitative aspects in a strategy mapping to tell both the WHAT and the WHY.
For your assignment, you're asked to choose a service industry organization. While there are so many service industries to choose from, from dentists to accountants to amusement park operations, a good suggestion may be to choose a relatively straightforward industry that offers a large number of potential performance measures. The first one that personally comes to my mind is a restaurant, although hospitality (hotels), and any of the professions or organizations mentioned above certainly satisfy the assignment. Use your own background, experience, and knowledge to decide what service industry you'd like to use.
As a general example, we'll use a restaurant in order to be able to fully think and work through the balanced scorecard process.
We know that the four categories (perspectives) on the balanced scorecard are: (1) Financial, (2) Customer, (3) Internal Process, and (4) Learning from Growth/Organizational Capacity. In the Strategy mapping portion of a full balanced scorecard assessment, these categories layer from #1 to #4 (top to bottom) with objectives in each category that help achieve the objectives in the next higher level. Your assignment focuses on the performance measures you'd choose to satisfy those objectives, but it's a good idea to keep the overall strategy/vision from that segment in mind when choosing the most meaningful KPIs.
Assume your scenario is a restaurant that wants to improve its profitability and you'll be performing the analysis over the course of six months. Also assume that you're focusing on its dinner service only. Your boss has asked you to identify two performance measures for each of the categories that will provide valuable insight and an ongoing status of how well the restaurant is achieving its goals (implementing the objectives from the Strategy Mapping). You'll have to present these two measures per category, along with an explanation of each, and finally, how the use of the balanced scorecard can increase the value-add to the organization.
Your strategy is to improve profitability and therefore there are a significant number of performance measures that are applicable here. You can use average meal cost/person or average sales/hour, or average sales/evening if the volume is relatively ...
This posting discusses potential performance measurements that can be used for each of the four perspectives in the Balanced Scorecard for a specific business. More importantly, it goes into what different performance measurements truly reflect regarding a business and what a business owner can do to improve performance and align more closely with the objectives created in the Strategy Mapping segment. Finally, it discusses the overall economic value-add and benefits that a Balanced Scorecard can provide within an organization and that these can be realized, depending on particularly, relatively quickly. The Balanced Scorecard provides immediately actionable, results-oriented insights that can be addressed almost immediately.