Setting goals and developing strategies are fundamental elements for a company’s success. Identifying the most relevant goals, however, can be a crucial challenge.
In this sense, integrating strategic planning with the Balanced Scorecard (BSC) can be a valuable approach for decision-making in a business.
Combining strategic planning with the BSC makes it possible to create a comprehensive action plan considering the company’s various needs, opportunities, and challenges.
This article will teach you how to create and execute a strategic plan integrated with the BSC. Happy reading!
What is strategic planning?
Strategic planning can be defined as the process of identifying opportunities, formulating strategies, and defining actions aimed at achieving organizational objectives.
Also known as a strategic plan, this methodology establishes the direction to be followed by the company and determines the search for the best results.
In this context, the act of planning involves establishing measures that represent the most effective route to achieving objectives; based on the analysis of the current context; in projecting future scenarios and considering the company's expectations for the coming years.
It’s important to highlight that strategic planning can be carried out at different intervals, from monthly to long-term, adjusting according to the demands and reality of each business.
What is the Balanced Scorecard?
The Balanced Scorecard, also known as BSC, was developed by professors Robert Kaplan and David Norton from Harvard Business School in the 1990s.
Moreover, it is a methodology for strategic management that seeks to balance different perspectives of performance in an organization, going beyond traditional financial and accounting indicators.
The objective of the Balanced Scorecard is to provide a more comprehensive and balanced view of a company's performance; considering not only financial aspects, but also those related to customers, internal processes and organizational learning and growth.
This approach helps organizations translate their strategy into clear and measurable objectives, aligning actions at all levels of the company.
But how does this tool apply to strategic planning? That’s what you’ll discover next!
Steps to create a strategic plan with the BSC
Check out the essential steps to create a BSC strategic plan:
1- Establishment of vision and mission
The first step to creating effective strategic planning with the BSC is to clearly define the organization's vision and mission.
Thus, the vision represents the desired future of the company; while the mission determines the purpose and fundamental values that guide its activities.
2- Identification of strategic objectives
With the vision and mission established, the next step is to identify the strategic objectives that will help realize that vision.
Therefore, these objectives must be specific, measurable, achievable; relevant and timely (SMART), and must cover the different Balanced Scorecard’s different perspectives.
3- Definition of performance indicators
Each strategic objective must be accompanied by performance indicators that allow you to monitor progress towards these objectives.
However, remember that these indicators must be chosen carefully; in order to faithfully reflect performance in each strategic area.
4- Establishment of goals and initiatives
In addition to performance indicators, it is important to establish clear goals and define specific initiatives that will help achieve these goals.
Therefore, goals must be challenging but achievable, and initiatives must be aligned with strategic objectives.
5- Implementation and monitoring of the BSC
Finally, know that implementing the Balanced Scorecard requires a firm commitment from leadership and an organizational culture that values measurement and continuous learning.
Once implemented, the BSC must be monitored closely, with regular reviews to assess progress; make adjustments and ensure the continued relevance of indicators and targets.
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How can BSC strategic planning help companies?
BSC strategic planning offers an approach that not only considers different perspectives but also resembles the layers of a pyramid.
Check out the main benefits of this integration:
- Establishes a clear and measurable path from the current state of the company to a more prosperous future state;
- Helps identify critical challenges and areas lacking essential competencies to advance to the next stage;
- Articulates how the set objectives will directly contribute to the organization’s progress in its various phases;
- Facilitates the prioritization of business activities, ensuring they are addressed in the necessary order to promote efficient progression between stages.
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While BSC strategic planning is a powerful approach, it’s important to remember that its implementation requires commitment, planning, and involvement from the entire organization to achieve significant results.
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Frequently Asked Questions
1- What is the difference between strategic, tactical, and operational planning?
Strategic planning: Is the process of defining the long-term objectives of an organization and strategies to achieve them. It involves high-level decisions that affect the entire company.
Tactical planning: It focuses on implementing the strategies defined in strategic planning. It involves medium-term decisions and is related to departments and organizational units.
Operational planning: Refers to the daily and short-term activities aimed at achieving the goals established in tactical planning. It involves specific and routine processes.
2- What does strategic planning mean?
Strategic plan is a systematic process of defining an organization's long-term objectives; as well as identifying and implementing the strategies necessary to achieve them.
Furthermore, it is a fundamental tool for guiding decision-making and aligning the efforts of the entire organization.
3- What is the concept of BSC strategic planning?
BSC (Balanced Scorecard) Strategic Planning is an approach that combines financial and non-financial measures to evaluate an organization's performance in relation to its strategic objectives.
In this way, the BSC helps translate the company's vision and strategy into a comprehensive set of performance measures that provide a balanced view of the business.
Conclusion
As you can see, carrying out efficient strategic planning with the Balanced Scorecard requires a careful and deliberate process.
From defining the vision and mission to implementing and monitoring performance indicators; each step plays a crucial role in the success of the organizational strategy.
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