The OBSC is a strategic management model developed to align a company's mission with its objectives, in pursuit of better results. However, when applied incorrectly, instead of bringing benefits, it ends up causing problems.
Do you believe your company might be experiencing something like this? To help you discover and even solve the problem, we will explain this issue in more detail. That way, by the end of reading, you will be ready to apply the Balanced Scorecard correctly and without difficulties. Shall we begin?
What is the Balanced Scorecard
Whether for identifying implementation failures or understanding potential benefits, it is first necessary to ensure a real understanding of the Balanced Scorecard methodology, also known by the acronym BSC.
This management model was developed by David Norton and Robert Kaplan, two renowned Harvard professors. Its objective was to present a solution that would allow for the measurement of results and the definition of objectives based on other factors, moving away from traditional financial, revenue, or market indicators.
Thus, the BSC still evaluates a company's performance based on financial and market perspectives, but it includes internal processes and organizational growth. This way, it allows management to combine data and strategic objectives with the company's vision and mission, ensuring better results.
Read also: Why invest in a strategic management office?
BSC Sabotage - When Implementation Goes Wrong
The Balanced Scorecard involves measuring extra factors related to the institution's internal processes and its capacity for learning and growth.
Aligning this with other metrics requires in-depth analysis and, at times, a reformulation of the company's positioning, values, and mission. Only then can it be ensured that the company, its capabilities, and objectives are aligned, leading to a solid strategy consistent with its reality.
And this is a task that demands time, effort, and the involvement of collaborators at all levels. And, usually, it is at this point that the implementation of the BSC goes wrong and leads to problems instead of benefits.
Often, managers look for ways to speed up the process and make changes while involving less of the rest of the company, following the idea that reducing effort saves time. Or, they may believe they can adopt the balanced scorecard and expect the rest of the company to follow suit.
The misunderstanding of the BSC and its potential as a methodology that generates long-term results is what tends to lead to its sabotage. Whether this is a difficulty on the part of the manager or any other segment of the company.
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How to solve problems and extract benefits from BSC
To solve the problem, there's no avoiding the effort required to ensure everyone's involvement. This starts with the understanding that clear communication methods and other approaches must be sought to reach and motivate all employees.
To ensure internal improvement, it is essential to have the participation of each collaborator or sector responsible for each process. Otherwise, it is not possible to arrive at solid metrics that are consistent with reality, nor to align these data with objectives to develop a valid strategy.
And, furthermore, for all of this to work, it's also necessary to count on the support of technology. A good strategic management software contribute to the implementation of the BSC having a concrete data base for performance analysis and for monitoring results from the definition of the strategy.
This is because it's also no use getting the whole team involved if there are no conditions and basis for complying with the other stages of the methodology.
Once well implemented, the BSC allows the defined strategy to be properly aligned, reducing failures and weaknesses and increasing the chances of positioning oneself more competitively to conquer the market.
Would you like more tips on how to avoid sabotaging your company's BSC? Check out also this post with 5 steps to put the methodology into practice!
