Using only financial measures to look at a company is like using the vapour trail to determine how an aeroplane is flying... it may tell you whether the plane is going up or down - but probably too late to adjust it.
- If you analyse it in sufficient detail you may find out about the efficiency of combustion
but you could never use it to control the fuel mixture because the lag is too long.
- Aircraft manufacturers have learned this and the cockpit is in the front, looking forward,
and not in the back, looking back, and the pilot has been given a range of measures
to help him control the plane."
Balanced Scorecarding (originally conceived by Prof. Robert S. Kaplan) is a way of managing a business by more than just its historic accounts but the true strength of the technique lies in selecting the right combination of measures to ensure proper control and to give warning of impending problems.
For example: measuring staff sickness and absenteeism is a good forward indicator of a likely future rise in staff turnover.
What measures should your business put in place to ensure that its future is even more glorious than its past?
Talk to us and see how we can help devise an integrated strategic management tool that provides a framework for action
If you need to understand more about the benefits look at one of Professor Kaplan's books: