How to Create Balanced Scorecards:
This quick 6 minute video explains a method for the difficult task of How to Create a Balanced Scorecard that is aligned with your Strategic Picture.

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Video Script:- Creating your Balanced Scorecard.

The Balanced Scorecard is the last section in the Strategic Plan design.
It is where the Strategy Map Objectives are assigned to every employee in a way that they become partially responsible for the success of each relevant objective.

Strategic Plan Definition
Visionary Goals -> <- Strategic Goals -> <- Balanced Scorecard
     Performance Goals
Visionary Statements Strategy Map BALANCED SCORECARD
Core Goal,
Perspectives &
Purpose Descriptions
Objectives &
Objective Destinations.
Strategy Map Objectives,
Key Performance Indicator,
Key Result Area,
Key Responsibility Area,
Measures and Scores.

The Balanced Scorecard is then the most active part of the Strategic Plan and is comprised of 3 Linked Tables.
These tables are normally called Grids because they are variable and also contain many different types of data: Text, Numbers, Icons, Document Locations or Website Links.

The 3 grids are:

Grid Name Usage
Objectives 1. Allocate and define how each Strategic Objectives apply to every employee.
2. Create an Initial Framework for defining the Initiatives Activity grid.
Initiatives 1. Defines what activities occur to support every Objective.
2. Contain activity based financial budget data.
3. Allocate a date range to define a monthly grid.
Monthly 1. Define the status of any month.
2. Maintain planned and actual accounting or numeric data.
3. Provide planned and actual totals as Initiatives grid cells.

Through their linkage, they provide a top down pathway which represents the Organizational Operational Alignment because each activity must be linked to a parent concept which in turn is linked via the Strategy Map, right back to the primary source which is the group of Visionary Strategic Statements.

Objectives Grid:

Please note that you can normally rename the term “Objectives”.
Many strategic plans use the name Goals whist other use Targets or Success Factor.

The primary function of the Objective Grid is to define and measure how a Strategic Objective applies to an Employee or Person.

Each person will have different organizational duties. Because their duties must be based on the Objective that is defined in the Strategy Map, the duties become aligned with the Strategic Objectives.

Primary Concept:
The Strategic Objective must be applied to define each person’s activities.
Every employee has a responsibility to ensure that each assigned Organizational Strategic Objective is successful.

Objective Responsibility
Objective 1 KPI/KRA 1
Objective 2 KPI/KRA 3
Objective 3 KPI/KRA 4

Secondary Concept:
If you cannot measure what you are doing then you probably should not be doing it.

Associated with the responsibility are the concepts of success and measurement.
Depending on the industry application the responsibility is often called a Key Performance and the common acronym KPI is the Key Performance Indicator.

Other Organizations prefer the slightly less intrusive KRA or Target, terms where KRA stands for either Key Responsibility Area or Key Result Area.

Strategy Map Objective KPI/KRA Measure Score/Outcome Numeric Score
Objective 1 KPI/KRA 1 Measure 1 Good 80%
KPI/KRA 2 Measure 2 Bad 30%
Objective 2 KPI/KRA 3 Measure 3 Very Good 95%
Objective 3 KPI/KRA 4 Measure 4 Medium success 55%
KPI/KRA 5 Measure 5 Needs Improvement 45%

Measurement is essential and in some instances it can be difficult to apply a measurement technique. Customer Service would be one of these and measurement is usually done using a Customer Survey with a customer prize incentive for completing the survey.

The Score can sometimes be qualitative and it is useful to have a numeric score based on a scale of 1 – 100% as well.

Additional columns:
It is useful to add in some additional information such as a date when the KPI/KRA will be reviewed, plus also a link to a larger document or relevant website link.

Objective KRA Link Measure Score/Outcome Numeric Score Review
Objective 1 KRA 1 www... Measure 1 Good 80% Jan/09
KRA 2 www... Measure 2 Bad 30% Feb/09
Objective 2 KRA 3 www... Measure 3 Very Good 95% Jan/10
Objective 3 KRA 4 www... Measure 4 Medium success 55% Feb/10
KRA 5 www... Measure 5 Needs Improvement 45% Mar/10

Initiatives Grid:

The term Initiatives can also be renamed, to be compatible with Microsoft Project the terms Activity or Action are sometimes used.

As mentioned above, the purpose of the Balanced Scorecard is to align and measure every Organizational activity.

Primary Concept:
The Objectives grid row contains no action data – each row definition is the reference frame for defining and storing all employee activities.

The strategic plan concept contains several One to Many relationships.
For each Objective there can be more than one KPI/KRA definition, and for each of these there are often several Initiatives/Activities.

The Initiatives or Activities must specify what date they relate to. Hence a date range column should be added. Some Initiatives will share date ranges whilst others may have their own dates.

As this is a planning system the users should not be forced into a constraint such as the financial year. You should have the ability to plan for natural events that often span across financial year boundaries.

KPI/KRA Grid row Relationship Activity Date Range
KPI/KRA 1 One to Many -> Initiative 1 Jan/09-Jun-09
Initiative 1 Jan/09-Jun-09
Initiative 1 Jan/09-Jun-09

Secondary Concept:
Some Grid Cells, such as Date Range will be commonly repeated.
If the data was stored in a list form then immediate allocation is possible and fast indexed data cross-referencing can be used.

The ability to cross reference the Balanced Scorecard data is a huge advantage. This provides the basic means for collaboration between data items such as Objectives or KPI/KRA items.
To be able to display all information based on common data such as an Objective Review Date provides excellent visibility into this critical business data source.

One popular example is to show all employees who are working towards a common Objective.

Additional Columns:
Extra Columns can also be added to enhance your information system.
The Initiatives grid is the activity and financial engine room of the Strategic Plan and the ability to include additional data such as General Ledger Account Codes and references to external documents or websites will add functionality.
Budgetary columns can also be added to provide essential financial analysis.

KPI/KRA Grid Row Activity Date Range Account Code Budget 1 Budget 2
KPI/KRA 1 Initiative 1 Jan/09 - Jun-09 GL-12001 1200.00 2323.00
Initiative 2 Jan/09 - Dec-09 GL-12002 1500.00 3454.00
Initiative 3 Jul/09 - Jun-10 GL-12003 2111.00 11121.00
KPI/KRA 2 Initiative 4 Jan/09 - Jun-09 GL-12004 7101.00 564.00
Initiative 5 Jul/09 - Jun-10 GL-12005 9767.00 3453.00
Totals 21679.00 20915.00

Monthly Planning Grids:

Primary Concept: Monthly grids provide the ability to track event or financial data throughout the year.
Particular emphasis is placed on budget planning with rows for Planned and Actual data.
Derived financial information such as Actual/Planned% are also popular.

Activity Monthly Row Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09
Initiative 1 Planned Exp 3000 4324 5432 2323 2111 1212
Actual Exp 2345 3422 4534 2134 2010 1123
Actual/Planned% 78% 79% 83% 92% 95% 93%

Secondary Concept: When working with Financial Information, each monthly grid row would have a total and it is possible to display this as a cell back in the Initiatives Grid.

KPI/KRA Grid Row Activity Date Range Account Code Budget 1 Budget 2 Monthly Actual/ Planned
KPI/KRA 1 Initiative 1 Jan/09 - Jun-09 GL-12001 1200.00 2323.00 78%
Initiative 2 Jan/09 - Dec-09 GL-12002 1500.00 3454.00 92%
Initiative 3 Jul/09 - Jun-10 GL-12003 2111.00 11121.00 121%
KPI/KRA 2 Initiative 4 Jan/09 - Jun-09 GL-12004 7101.00 564.00 156%
Initiative 5 Jul/09 - Jun-10 GL-12005 9767.00 3453.00 53%
Totals 21679.00 20915.00

Using Numeric Gauges as Measures:

The initial Balanced Scorecard concept requires that all KPI/KRA statements be measured and scored, however it is likely that many of these scores will be qualitative and not numeric.
A parallel numeric measurement facility is badly needed as this can be used to provide averaged performance information.
Once the averaging is possible, this leads to a number of ways that outcomes can be displayed.

1. Averaged Monthly data displayed for each Initiative grid row.
2. Averaged Initiative data displayed for each Objective or KPI/KRA grid row.
3. Averaged Objective data displayed in the Organizational Tree for each employee and/or department.
4. Averaged Objective data displayed in the Strategy Map for each Objective.

The ability to provide a gauge inside the actual Strategy Map provides an on-screen display showing the success status of each individual Objective.
Strategy Map WYSIWYG is achieved when the above display is combined with an Objective Grid display showing how each Map Objective gauge was derived.
This is Certainly a very powerful form of the Closed Loop Learning concept.

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