Special report: Balanced scorecard
Business performance measurement has come top of the Finance and Management Faculty’s technical needs survey for the past two years. It is an area which is not only a core part of the finance professional’s role – but also one which, when done well, can inform and shape business performance.
It is often said that ‘what gets measured gets managed’ and ‘what gets measured gets valued’ and on the whole this is true.
But poorly thought-out measures can cause dysfunctional behaviours. And an insufficient range of measures can provide management with a seriously limited view of business performance. This is where the balanced scorecard (BSc) can prove to be a valuable management tool.
We first published a good practice guideline on this subject back in 1999. This report mainly focused on designing your measurement tool. Following a popular event in July 2011 on the topic of successful implementation, we invited our speaker, Kevin Bounds, one of the original report’s co-authors, to update this guidance.
The new report discusses how to ensure success, the technology available to support the tool and how to incorporate your business’ strategic objectives into your BSc. In addition it provides an in-depth case study on implementation. It is a wide-ranging overview in which the theoretical aspects are fully supported with practical experience.
Bounds has also interviewed Lawrence Churchill CBE, chairman of NEST and previously CEO of a number of large insurance companies. Churchill’s comments are both insightful and challenging for accountants. In this report Bounds points out that communication skills are key when setting up and rolling out BSc implementation. If this is an area that you would like more guidance on then look out for a future special report on this topic in early 2012.
Published by the Finance and Management Faculty (SR34 - October 2011)
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Full article is available to ICAEW members and students.