A successful business strategy has many elements. These well balanced elements may include customer relations, operations, competition, innovation and finance. By understanding each element and the relationships between each element, managers will have a better understanding of their company. Authors Robert Kaplan and David Norton discuss these elements in their article titled The Balanced Scorecard: Measures That Drive Performance. “The balanced scorecard tracks all the important elements of a company’s strategy – from continuous improvements and partnerships to teamwork and global scale. And that allows companies to excel,” (p. 1). By tracking multiple elements, and not just one, managers are able to set obtainable goals and adapt while still focusing on strategy and vision.
Both financial and operational measures are important, however I believe one of the most important elements in a business strategy is the people. From the top of the organizational chart to the bottom, we must have the right people in the right spaces for a company to be successful. The best executives are needed to make hard strategic decisions. The best staff members are needed to keep leaning and innovating. Together they keep the company moving forward. People are what link these elements together. With the right employees and a balanced scorecard a company may succeed.
Personally I have worked in an organization that seemed to only focus on the financial element. Although this is important, the executives unknowingly blinded their selves to the other elements involved in a business strategy. As a result the executives missed opportunities for improvement and innovation. By adapting the balanced scorecard approach executives would have had a better understanding or view of the company. Not only would the executives see the financial measures but also the operational measures. According to Kaplan and David these operational measures are the drivers of future financial performance and thus extremely valuable.
Kaplan, Robert S., and David P. Norton. The Balanced Scorecard: Measures That Drive Performance. Boston, Mass.: Harvard Business Review, 2010. Print.