Summary

In this article – the third of a four part series – author, management consultant and Balanced Scorecard expert Paul Niven discusses the need for an Internal Process Perspective in a Balanced Scorecard. The other three parts focus on the Financial, Customer and Learning and Growth perspectives.

The author begins by pointing out that, with the Internal Process perspective, the focus of performance management shifts from the “what” of value creation to the “how” of value creation. Specifically, the Internal Process perspective describes how an organisation will achieve outcomes envisioned in the Customer and Financial perspectives.

Summary

In this article – the second of a four part series – author, management consultant and Balanced Scorecard expert Paul Niven discusses the need for a Customer Perspective in a Balanced Scorecard. “The remaining two parts focus on the Internal Process, and Learning and Growth perspectives.”

The author begins by discussing the explosion in the options available for a consumer’s choice. A century and more ago, producers of goods and services enjoyed great power over customers who had extremely limited choices in the market. Today, the scenario has reversed, with customers exerting far greater power in the purchase transaction. Technologies like the Internet increase customer knowledge and insight and deliver greater bargaining power to customers. This makes it absolutely vital for companies to have a well-defined Customer Perspective.

Our first event on Enterprise Performance Management (EPM) was held in the capital of Norway, Oslo on the 22nd and 23rd of April 2008. It was an exciting two-day program.  The first day consisted of presentations given by some of the leading experts in the EPM field. On the second day it was a course given by the leading author Paul Niven and assisted by Dennis Barnhart, president of Barnhart & Associates. The Course “Executing the Strategy with the Balanced Scorecard: Step-by-Step” is based on Niven’s successful series of Step-by-Step” books.

The event was a co-arrangement with Scandinavia’s biggest Performance Management conference – the Soria Moria 2008 Conference.

Welcome to the first EPM Review Newleter

Execution and the Balanced Scorecard - Execution is a discipline integral to strategy

Creating an adaptive enterprise - A series of interviews recognized experts respond to questions about some of the persistent issues facing leaders, as they seek to create an adaptive enterprise and achieve new levels of performance.

Other Articles

• Strategy Communication
• Executing Strategy with the Balanced Scorecard
• How can the HR and other staff functions benefit from the Balanced Scorecard?

Financial Perspective - focuses on objectives and measures relating to a company’s effectiveness in delivering shareholder value, growing revenue, and enhancing productivity

Choosing a Strategy - Architecting a Balanced Scorecard requires organizations to master four techniques - effective strategic mapping, selection of the right strategic measures, selection of the appropriate strategic targets and choosing the right strategic initiatives

Other Articles

• Aligning Compensation
• Giving Resources to Execute strategy

Internal Process Perspective - Achieve the customer value proposition, enhance revenue and increase efficiency.

Saatchi & Saatchi Worldwide - Scorecard an essential tool for managing the organization, from setting priorities to allocating resources to managing performance.

Other articles 

• Strategy Maps
• Cause and Effect

Customer Perspective - A vital for all companies, regardless of the industry to track their success from the eyes of their customers.

The peril of the Budget focused organization - The need for understanding the business to develop a more adaptive performance management model through "Beyond budgeting" a powerful idea and superior alternative to the conventional budgeting approach

Other articles 

• Aligning Board of Directors
• Strategy Implementation

Summary

In this article – the first of a four part series – author, management consultant and Balanced Scorecard expert Paul Niven discusses the need for a Financial Perspective in a Balanced Scorecard. The other three parts focus on the Customer, Internal Process and Learning and Growth perspectives.

Typically, the mission and vision statements of organisations do not refer to their financial aspirations. However, companies need to have a Financial Perspective so that they can answer shareholders who require a return on their investment.

Companies must ensure that a focus on customers also leads to improved financial results. Financial performance also enables investment in people, processes and technology so that customers can be served successfully.

So, how do companies know if they are performing well financially? The Financial perspective of the Balanced Scorecard gauges financial success from the perspective of a company’s shareholders and gives the company the tools to track success over time.