What is it?

A framework to establish the most useful measures (KPIs) by which to monitor your unit’s progress and performance against strategic goals.

Why is it useful?

• Prevents teams from fixating on a single measure of performance.
• Ensures a balanced view by monitoring a range of financial and non-financial indicators.
• Translates vision and strategy into clear measures and goals.

Objective

• Create a picture of your unit’s performance in four perspectives: financial, internal, learning/growth, and customer/stakeholder.
• Long-term goals include: improved internal processes, motivated employees, stronger information systems, higher customer satisfaction, effective progress monitoring, and better financial outcomes.

Resources Required

• Time: Faster if strategy and vision already exist. Once set up, it becomes part of day-to-day work.
• Number of people: About 15.
• Whiteboard.
• Flip chart.
• Wall space to display the scorecard.

What do you need before the workshop?

Stakeholders should bring:

• Mission statement.
• Strategic plan/vision.
• Current financial position.
• Current organizational structure.
• Skills and expertise levels of employees.
• Current customer satisfaction levels.

Process

1. Define the context

Review the environment in which the unit operates, its purpose/mission, and changes over time (yesterday, today, tomorrow). Use tools like SWOT or PEST.

2. Confirm the vision

Agree or refine the unit’s vision for clarity.

3. Identify perspectives

Choose the perspectives to measure. The original four are:

• Financial.
• Internal.
• Learning & growth.
• Customer/stakeholder.
  Add others if strategically important.

4. Translate vision into strategic aims

Break the vision down into aims for each perspective.

5. Identify critical success factors (CSFs)

Ask: what factors must we succeed at to achieve our strategic goals?

6. Develop measures

Define specific measures for each CSF. Consider interactions and possible knock-on effects.

7. Check balance

Review the measures as a whole to ensure they provide a balanced picture.

8. Create top-level scorecard

Build the overall scorecard and secure sponsor approval. Ideally, sponsors observe the workshop.

9. Cascade into detailed scorecards

Translate strategy into day-to-day measures and tasks.

10. Set goals

Agree both short-term and long-term goals for each measure.

11. Develop an action plan

Define actions to achieve the goals, prioritizing where necessary.

12. Review continuously

Keep the scorecard alive as a dynamic part of people’s jobs.

Secret Sauce

• The development process is as valuable as the scorecard itself.
• Include a wide range of stakeholders to build shared understanding.
• Avoid forcing old measures into the scorecard—use this as a chance to rethink.
• Look at the organization from different perspectives and timeframes for a fuller picture.
• Link strategy directly to actions, measuring both financial and non-financial outcomes.
• Ensure all measures are SMART (Specific, Measurable, Achievable, Realistic, Timely).
• Sanity check alignment with the Strategic Plan before finalizing the Action Plan.