High-quality strategies and not high-quality implementation
Marketing today is working under the conditions of the highest competition in the markets over the entire history, and this competition is becoming more and more important. Rapid copying of business models, marketing tools for positioning, differentiation, advancement leads to the fact that while marketing tools become more efficient, competition does not decrease and company profitability does not increase, and in some segments it is falling rapidly. The conditions in which marketers and companies themselves work today are fundamentally different from those that existed a dozen years ago.
The main competitive advantages today are competent strategic management, business process efficiency, the company's intangible capital, embodied in the knowledge and skills of employees, the company's ability to retain customers and attract new ones, a corporate culture that encourages innovation and organizational improvements. Of paramount importance are the company's ability to respond adequately to changes (reactive abilities), predict changes and work ahead of schedule (proactive abilities).
The growing role of strategic management, the need to define strategic marketing objectives, missions and development concepts today are recognized by all companies seeking to maintain and strengthen their position in the market. However, the formalization of goals is only the beginning. It is necessary to convey value - target attitudes to employees, and most importantly, to successfully implement them. According to the studies that formed the basis of the Balanced Scorecard methodology, the reason that the strategy did not bring the desired results, in most cases, is not the quality of the strategies themselves, but the quality of their implementation. What is typical for the model of "not high-quality" strategy implementation?
Today, the management of a company using only financial indicators calculated at the beginning of the year is doomed to analyze the reasons for the unavailability of these indicators at the end of the year. Of course, it is important to know where we started and what we came to. But the knowledge of what awaits us at the new turn, in an era of change, is important for future success and for evaluating the company's prospects. How to evaluate these prospects?
Often, managers, changing business strategy, face the fact that by inertia employees continue their activities without changing anything in it. How to convey target settings to employees and to ensure that subordinates are able to change their priorities in accordance with the priorities of the company? how
to determine if their actions are consistent with the global goals of the company? How to evaluate the contribution of each employee in the implementation of strategic goals?
Reports produced inside companies are replete with data and management, as a rule, do not have time to search for the information they need to make a decision. It would be enough to restrict ourselves to a set of several key indicators that should cover all aspects of the company. Is it possible, and how to determine these indicators?
These problems are designed to solve a balanced scorecard - Balanced Scorecard.
What is BSC?
A Balanced Scorecard (BSC) can be presented as a “strategic scorecard of performance” of a company.
reflects both financial and non-financial elements of an organization’s strategy,
tracks cause-effect relationships in business,
provides a link between the company's strategic goals and operational activities and performance monitoring.
In addition to the abbreviation Balanced Scorecard (BSC), which has entered the marketing practice, there is a BSC - a direct translation of the term “Balanced Scorecard”
At the core of the BSC are two key postulates:
well-organized implementation of the strategy has a higher value than the quality of the strategy itself;
The use of only financial indicators in the management does not allow to successfully maximize the value of the company in the long term.
Basic provisions of the BSC
The provisions of the BSC are aimed at implementing the strategy developed in the enterprise; The BSC methodology does not concern the elaboration of a strategy and does not impose any specific requirements on it - neither to methods nor to the content side. The main purpose of the system is to strengthen the business strategy, formalize it, conduct and report to each employee of the company, provide monitoring and feedback in order to monitor the implementation of the strategy and take corrective actions.
Balanced Scorecard is a system of strategic management of an organization based on measuring and evaluating its effectiveness in a set of indicators, selected in such a way as to take into account all aspects of activity that are significant from a strategic point of view.
The BSC system translates the mission and the overall strategy of the organization into a system of clearly formulated goals and objectives, as well as interrelated monetary and non-monetary indicators that determine the degree of achievement of these installations within the four main projections: Finance, Clients (Marketing), Internale business processes ”,“ Learning and Growth ”. The BSC establishes a causal relationship of all indicators in the system among themselves and with the company's strategic objectives, the relationship of the resulting indicators with determining factors and the relationship of all indicators with financial results. The BSC approach is based on decomposition of vision, mission and general strategy. companies in a set of strategies (Strategies) in the perspectives of "Finance", "Clients", "Internal processes", "Training and growth". For each strategy, strategic objectives (Objectives) are defined. Between individual goals are established causal relationships. A complete set of goals reflects the company's strategy. For each goal, a set of activities (initiatives - Initiatives), indicators reflecting the degree of implementation of the goal and their target values. Key indicators of performance (KPI) are commonly used as indicators. Depending on which of the prospects (finance, clients, processes, training and growth) are KPIs, they can be represented in financial terms, in percentages, points, etc. Strategy, strategic goals, KPI and initiatives form a strategy map for a certain perspective. Thus, the company's overall strategy is translated into a system of strategic maps. The strategic map helps employees understand the logic of the strategy, the relationship between the various objectives of the company. Strategic maps provide employees with an accurate understanding of how their individual tasks, projects and results contribute to the achievement of common goals and strategies and, ultimately, the success of the entire organization.