"upgrade is needed" indicator for your business scorecard

“UPGRADE IS NEEDED” INDICATOR FOR YOUR

BALANCED SCORECARD Based onwww.bscdesigner.com/upgrade-is-needed-indicator-for-bsc.htm

By Aleksey Savkin

BSC DESIGNER

MOST STUFF HAS AN EXPIRATION DATE

• Milk’s “best before” date

BSC DESIGNER

MOST STUFF HAS AN EXPIRATION DATE

• Milk’s “best before” date

• Expiration date on the pack of medicine

BSC DESIGNER

MOST STUFF HAS AN EXPIRATION DATE

• Helps consumers to get a rough idea about the condition of the product

BSC DESIGNER

MOST STUFF HAS AN EXPIRATION DATE

• Helps consumers to get a rough idea about the condition of the product

• Avoid buying something spoiled

BSC DESIGNER

MOST STUFF HAS AN EXPIRATION DATE

• This idea can be applied to any product, especially to those ones that depend on changing environments.

BSC DESIGNER

THE REASONS OF THIS IDEA

• The product design and functions are getting out of the date

BSC DESIGNER

THE REASONS OF THIS IDEA

• The product design and functions are getting out of the date

• User’s requirements change

BSC DESIGNER

THE REASONS OF THIS IDEA

• The product design and functions are getting out of the date

• User’s requirements change• Technologies suggest new opportunities

BSC DESIGNER

EXAMPLES OF THIS IDEA

• According to analysis done by Infonetics, a brand new smart phone will be upgraded in 7-9 months (prepaid users) or in 18 to 20 months (postpaid users);

BSC DESIGNER

EXAMPLES OF THIS IDEA

• According to analysis done by Infonetics, a brand new smart phone will be upgraded in 7-9 months (prepaid users) or in 18 to 20 months (postpaid users);

• According to Forbes an average car in the U.S. is now over 10 years old.

BSC DESIGNER

WHAT ABOUT THE BALANCED SCORECARD?

• The implementation of the business system can have an expiration date as well.

BSC DESIGNER

WHAT ABOUT THE BALANCED SCORECARD?

• The implementation of the business system can have an expiration date as well.

• A Balanced Scorecard, as any other product based on changing business conditions, has a “best before” date.

BSC DESIGNER

A DETAILED UPDATED PLAN FOR THE BALANCED SCORECARD

Source: www.bscdesigner.com | Illustrations: pixabay.com

BALANCED SCORECARD CAR ANALOGY

1BSC prototypeMany companies start with a prototype of the business scorecard.

The car that you drove when you got your driving license

Source: www.bscdesigner.com | Illustrations: pixabay.com

BSC DESIGNER

A DETAILED UPDATED PLAN FOR THE BALANCED SCORECARD

Source: www.bscdesigner.com | Illustrations: pixabay.com

BALANCED SCORECARD CAR ANALOGY

1BSC prototypeMany companies start with a prototype of the business scorecard.

The car that you drove when you got your driving license

2Operational update of the BSC Updating KPIs' values;Adding new action plans;Reporting back to the system.

Fill car's tank with fuel

Source: www.bscdesigner.com | Illustrations: pixabay.com

BSC DESIGNER

A DETAILED UPDATED PLAN FOR THE BALANCED SCORECARD

Source: www.bscdesigner.com | Illustrations: pixabay.com

BALANCED SCORECARD CAR ANALOGY

1BSC prototypeMany companies start with a prototype of the business scorecard.

The car that you drove when you got your driving license

2Operational update of the BSC Updating KPIs' values;Adding new action plans;Reporting back to the system.

Fill car's tank with fuel

3Maintenance of the BSCAn upgrade of the KPIs to ones more suitable.

Check your engine and change oil

Source: www.bscdesigner.com | Illustrations: pixabay.com

BSC DESIGNER

A DETAILED UPDATED PLAN FOR THE BALANCED SCORECARD

Source: www.bscdesigner.com | Illustrations: pixabay.com

BALANCED SCORECARD CAR ANALOGY

1BSC prototypeMany companies start with a prototype of the business scorecard.

The car that you drove when you got your driving license

2Operational update of the BSC Updating KPIs' values;Adding new action plans;Reporting back to the system.

Fill car's tank with fuel

3Maintenance of the BSCAn upgrade of the KPIs to ones more suitable.

Check your engine and change oil

4Rethink your scorecardUpdate a business strategy of your company and, as a result, you need to upgrade your Balanced Scorecard.

It is time to buy a new car!

Source: www.bscdesigner.com | Illustrations: pixabay.com

WE’D BETTER CALL IT “UPGRADE DATE”

BSC DESIGNER

WE’D BETTER CALL IT “UPGRADE DATE”

• With consumer products “expiration” or “best before” date means that after this date the product is in a bad condition and you should not buy or use it.

BSC DESIGNER

WE’D BETTER CALL IT “UPGRADE DATE”

• In this sense the Balanced Scorecard (as a business concept) probably has some kind of expiration date, but

• it depends a lot on new breakthroughs in management science.

BSC DESIGNER

WE’D BETTER CALL IT “UPGRADE DATE”

• When we tell someone that the business scorecard is out of date we don’t mean that we need to get rid of it.

BSC DESIGNER

WE’D BETTER CALL IT “UPGRADE DATE”

• When we tell someone that the business scorecard is out of date we don’t mean that we need to get rid of it.

• What we mean is that this scorecard needs to be upgraded.

BSC DESIGNER

WE’D BETTER CALL IT “UPGRADE DATE”

• Let’s go ahead with a scorecard upgrade plan. An analogy with a car will help.

BSC PROTOTYPE. THE CAR THAT YOU DROVE WHEN YOU GOT YOUR DRIVING LICENSE.

BSC DESIGNER

BSC PROTOTYPE

• Many companies start with a prototype of the business scorecard.

BSC DESIGNER

BSC PROTOTYPE

• Many companies start with a prototype of the business scorecard.

• In most cases it is a spreadsheet in MS Excel.

BSC DESIGNER

BSC PROTOTYPE

• Many companies start with a prototype of the business scorecard.

• In most cases it is a spreadsheet in MS Excel.• It is hard to maintain and is actually a set of

indicators focused on measurement, rather than on management.

BSC DESIGNER

BSC PROTOTYPE

• You will find out that this scorecard doesn’t meet the growing requirements of your business.

BSC DESIGNER

THE CAR THAT YOU DROVE WHEN YOU GOT YOUR DRIVING LICENSE

• It can be compared to a first car that one drives right after getting a driving license.

BSC DESIGNER

THE CAR THAT YOU DROVE WHEN YOU GOT YOUR DRIVING LICENSE

• It can be compared to a first car that one drives right after getting a driving license.

• You sell your first car and buy a new one that is more suitable for a more experienced driver

BSC DESIGNER

THE CAR THAT YOU DROVE WHEN YOU GOT YOUR DRIVING LICENSE

• If you started something in Excel it will be really hard to upgrade it to the professional performance management software

BSC DESIGNER

THE CAR THAT YOU DROVE WHEN YOU GOT YOUR DRIVING LICENSE

• If you started something in Excel it will be really hard to upgrade it to the professional performance management software

• An upgrade is less painful if you started with a free BSC Designer Light, which can be later upgraded to Standard or Pro editions.

OPERATIONAL UPDATE OF THE BSC. FILL CAR’S TANK WITH FUEL.

BSC DESIGNER

OPERATIONAL UPDATE OF THE BSC

• Updating KPIs’ values;

BSC DESIGNER

OPERATIONAL UPDATE OF THE BSC

• Updating KPIs’ values;• Adding new action plans;

BSC DESIGNER

OPERATIONAL UPDATE OF THE BSC

• Updating KPIs’ values;• Adding new action plans;• Reporting back to the system.

BSC DESIGNER

FILL CAR’S TANK WITH FUEL

• You just need to keep an eye on its fuel level and fill the car’s tank with fuel (feed your BSC with data) regularly.

MAINTENANCE OF THE BSC. CHECK YOUR ENGINE AND CHANGE OIL.

BSC DESIGNER

CHECK YOUR ENGINE AND CHANGE OIL

• Car manufacturers suggest that trained mechanics should examine your car regularly.

BSC DESIGNER

CHECK YOUR ENGINE AND CHANGE OIL

• Car manufacturers suggest that trained mechanics should examine your car regularly.

• Any complex system needs to be revised regularly.

BSC DESIGNER

MAINTENANCE OF THE BSC

• Upgrade of the KPIs to ones more suitable

BSC DESIGNER

MAINTENANCE OF THE BSC

• Upgrade of the KPIs to ones more suitable• Upgrade of guiding policies derived from

strategy

RETHINK YOUR BUSINESS SCORECARD. IT IS TIME TO BUY A NEW CAR!

BSC DESIGNER

IT IS TIME TO BUY A NEW CAR

• A better paid job, a new house, or need to participate in school run program

BSC DESIGNER

IT IS TIME TO BUY A NEW CAR

• A better paid job, a new house, or need to participate in school run program

• Your environment and priorities have changed, so you think about buying a new car.

BSC DESIGNER

RETHINK YOUR BUSINESS SCORECARD

• You need to update a business strategy of your company and, as a result, you need to upgrade your Balanced Scorecard.

BSC DESIGNER

RETHINK YOUR BUSINESS SCORECARD

Besides major market shakes there are some less obvious drivers of the strategy change:

BSC DESIGNER

RETHINK YOUR BUSINESS SCORECARD

• It might be as simple as the complete execution of the current strategic plan or…

BSC DESIGNER

RETHINK YOUR BUSINESS SCORECARD

• It might be as simple as the complete execution of the current strategic plan or…

• New people with new points of view came into your team; you need to upgrade your strategy taking in account their experience.

BSC DESIGNER

WHAT BUSINESS TOOL DO YOU USE TO MAKE DECISIONS?

• If you find that your team uses BSC less and less, then the scorecard needs to be upgraded.

HOW OFTEN DO YOUR UPGRADE YOUR SCORECARD? HOW OFTEN DO YOU BUY A NEW

CAR?

BSC DESIGNER

HOW OFTEN DO YOUR UPGRADE YOUR SCORECARD?

• Frequent upgrades of the BSC are the sign that the scorecard is not “strategic” enough.

BSC DESIGNER

HOW OFTEN DO YOUR UPGRADE YOUR SCORECARD?

• Frequent upgrades of the BSC are the sign that the scorecard is not “strategic” enough.

• The general recommendation would be to look at major market shakes and their regularity.

BSC DESIGNER

ONLINE BUSINESS EXAMPLE

• In the online business rules change fast.• It makes sense to revise your with each major

Google upgrade.• At least the parts that are responsible for

content and search engine marketing

“UPGRADE NEEDED” INDICATOR FOR YOUR SCORECARD

BSC DESIGNER

YOUR CAR TELLS YOU WHEN THE MAINTENANCE IS NEEDED

Your car tells you when the maintenance is needed.

Source: www.bscdesigner.com | Illustrations: pixabay.com

BSC DESIGNER

YOUR CAR TELLS YOU WHEN THE MAINTENANCE IS NEEDED

Incorporate an "update needed" indicator in your scorecard.

Your car tells you when the maintenance is needed.

Source: www.bscdesigner.com | Illustrations: pixabay.com

BSC DESIGNER

INCORPORATE AN “UPDATE NEEDED” INDICATOR IN YOUR SCORECARD

• It might be programmed to attract your attention in a 12 month period

BSC DESIGNER

INCORPORATE AN “UPDATE NEEDED” INDICATOR IN YOUR SCORECARD

• It might be programmed to attract your attention in a 12 month period

• You might want to have an alert when selected KPIs achieve their specified values.

BSC DESIGNER

INCORPORATE AN “UPDATE NEEDED” INDICATOR IN YOUR SCORECARD

• It might be programmed to attract your attention in a 12 month period

• You might want to have an alert when selected KPIs achieve their specified values.

• Adding a kind of a “time capsule” in the description field of this indicator.

MAIN TAKEAWAYS

BSC DESIGNER

MAIN TAKEAWAYS

• Balanced scorecard has an expiration date; it need to be revised and upgraded regularly;

BSC DESIGNER

MAIN TAKEAWAYS

• Balanced scorecard has an expiration date; it need to be revised and upgraded regularly;

• Balanced scorecard is a derivative of a strategy; once the strategy is revised, the scorecard needs to be revised as well;

BSC DESIGNER

MAIN TAKEAWAYS

• When things change, there might be external factors (competitors, market regulators, technologies) as well as internal ones (your team, new experience);

BSC DESIGNER

MAIN TAKEAWAYS

• When things change, there might be external factors (competitors, market regulators, technologies) as well as internal ones (your team, new experience);

• Add an “Upgrade is needed” indicator to your scorecard with a “time capsule” in the description; in this way you will be prepared for the next upgrade.

BSC DESIGNER

MORE ABOUT THE BALANCED SCORECARD

Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com

BSC DESIGNER

BSC DESIGNER

THANK YOU!

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