Learn about the characteristics of the GPD and VBM management models, BSC and PDCA and discover how they can be used in an integrated way.
In a business environment, you always have to be on your toes to avoid losing focus. That's why there are various tools to help management control their enterprise and stay on track. In this article we compare the tools Balanced Scorecard (BSC), Management by Guidelines (GPD) and Value-Based Management (VBM - Value Based Management). These tools offer managers a means of monitoring and promoting compliance with planned strategies, which creates value for the business.
Balanced Scorecard - BSC software
It is a tool that aims to measure and manage the company's performance based on four perspectives: financial, customers (external and internal), processes and organizational growth. Each of these perspectives defines the organization's objectives and performance indicators, management and actions, uniting all the planning around a global objective.
Management by Guidelines - GPD
It is a planning system that defines the organization's annual guidelines, taking into account the organization's philosophy and breaking down the plan through the hierarchy to the operational level. This management method aims to guarantee a competitive advantage by introducing the organization's strategic vision and culture into the practice and quality control of all internal processes.
Value Based Management - VBM
It is a model based on the measurement and reward system, created to encourage managers to focus their attention on generating value for the company's shareholders. The VBM guidelines are based mainly on accounting information, such as profit margins, return on invested capital and so on. Using this method, it is possible to check periodically whether those responsible for actions should be rewarded or corrected in order to increase the company's profitability.
In their own way, all of these tools propose the definition of goals and plans, the establishment of success indicators, the comparison between what is planned and what is real, the identification of deviations, in short, methods of guaranteeing the execution of strategic planning, providing efficient management. Some experts suggest that the use of these methodologies can have an even more significant effect when they are used simultaneously.
According to Guilherme Barbassa, each methodology has its strengths and areas where they don't work. "O VBM has the financial perspective and the breakdown of economic targets. However, it doesn't talk about operational efficiency, so the strategy isn't as clear. O BSC is strong in communicating the strategy and ensures that the strategy is sustainable. However, it is not taken to the day-to-day running of the organization, it is not taken to the operational level, especially in medium-sized and large companies. So there can be a gap on the shop floor. The Management by Objective However, it's not as good at communicating the strategy, it doesn't explain the whys of the goals," he explains. According to Barbassa, as each methodology has its strengths and weaknesses, they complement each other if they are combined into a single tool.
It can be seen that the three methodologies can coexist harmoniously within a company, especially when there is an interface that integrates them so that there is no overlapping of functions. Stratec created the strategic management software combining the best of these three methods and other different management models, to facilitate the implementation and refined monitoring of strategic execution. "GE software can work with one methodology or with all three simultaneously, so that the company doesn't have to lock itself into just one model. This makes it easier for managers to monitor strategic goals on a day-to-day basis," adds Barbassa.
Investing in a hybrid management model means investing in the maturity of the organization, which consequently reflects on the perpetuity of the business. To find out more, see here a more detailed presentation of the software.
Sources:
OLIVEIRA, João. Et AL. The Financial Perspective of the Balanced Scorecard (BSC) and Value-Based Management (VBM): An Application in Strategic Planning. November 8, 2006. São Paulo. 12p.
TREVISANI, Tiago. PDCA, BSC e GDP são apenas modismos ou realmente funcionam? Disponível em: http://ogerente.com.br 29/07/2012.
