No wonder that performance of individuals and teams have got affected; the wonder is in the reasons; is it because of economy turmoil? Lockdown? Clients? Working remotely? Or is it our own team’s performance?
A mix of variables interrelated and interconnected that makes it so hard to get to the root causes of the slowdown. Measuring performance has been always a challenge, not only during COVID19 outbreak; organization – big or small- link performance with merit increase in pay plans, incentives and sometimes profit sharing for the importance of the collective individual performance affecting the overall organization performance, profitability and its market value.
KPIs gives management cause-effect relationship between performance targets and performance drivers. And thus, with this disruption, the BSC becomes a strategic management tool useful for implementing strategy and re-formulating it when bad results are scored or when there are major changes in the market such as what we face during and post CORONA time.
Business leaders has been always thinking about different ways of business measurement and control. The most popular approaches are KPIs (Key Performance Indicators) and Balanced Scorecard. While both concepts refer to the business performance management, there is still a significant difference.
Balanced scorecard is a strategic management performance metric used to identify and improve various internal business functions and their resulting external outcomes. Balanced scorecards are used to measure and provide feedback to organizations.
In Pinnacle we think KPIs as a part of bigger picture of Balanced Scorecard. Balanced Scorecard measures business using several basic groups. Each group has its unique Key Performance indicators.
Is Balanced Scorecard a better approach” Actually, yes. It gives more flexibility. For instance, able to specify relative importance of indicators, e.g. balance them. When KPIs will do its job better than Balanced Scorecard” When you are not interested in global view over the performance problems (this is what Balanced Scorecard provides), but need to focus on a very tight niche, more over on some certain aspect of this niche, for instance, “Finances”. Finally, both approaches deal with metrics, measurement
We view the organization from four perspectives to develop objectives, measure (KPIs), targets, and initiatives relative to each of these points of view:
Financial or Stewardship: often named Stewardship. This perspective shows organizational financial performance and the use of financial resources.
Customer/Stakeholder: this perspective shows organizational performance from the point of view of the customer or other key stakeholders that the organization is designed to serve.
Internal Process: shows organizational performance through the lens of the quality and efficiency related to our services or other key business processes.
Organizational Capacity/ People (originally called Learning and Growth): shows organizational performance through the lens of human capital, infrastructure, technology, culture and other capacities that are key to breakthrough performance
Implementing a Balanced Scorecard with a SMART KPIs/ Objectives for your organization will provide a common language of communication between all functions, which is essential to:
Pinnacle is a multi-country consultancy firm. Our consultants are spread around the world; with 70% of our consultants are women. We have built our organization on modern business model with agility, diversity, and resilience to the business dynamics. We have chosen our technology platform to support our modern mindset thus we work from anywhere.
As work is not a place anymore. We implement Lean Six Sigma in everything we do whether internally or externally at our client sites.
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