【正文】 ng and tracking the progress of strategic objectives. Measurements can be leading indicators of performance (leads to an end result) or lagging indicators (the end results).Objective: What specifically must be done to execute the strategy。Excellence in Financial ManagementCourse 11: The Balanced Scorecard Prepared by: Matt H. Evans, CPA, CMA, CFM This course provides a stepbystep guide on how to build a Balanced Scorecard. An understanding of strategic planning is remended prior to taking this course. Refer to Course 10 on strategic planning. This course is remended for 2 hours of Continuing Professional Education. In order to receive credit, you will need to pass a multiplechoice exam which is administered by installing the exe file version of this short course. The exe file can be downloaded from Revised: February 4, 2002Basic Concepts Accountants municate with financial statements. Engineers municate with asbuilt drawings. Architects municate with physical models. It seems that almost every profession has some means of municating clearly to the end user. However, for people engaged in strategic planning there has been an ongoing dilemma. The finished product, the strategic plan, has not municated and reached the end user. Sure strategic plans are nice to look at, full of bar charts, nice covers, well written, and professionally prepared。 but they simply have not impacted the people who must execute the strategic plan. The end result has been poor execution of the strategic plan throughout the entire organization. And the sad fact of the matter is that execution of the strategic plan is everybody’s business, not just upper level management. Upper level management creates the strategy, but execution takes place from the bottom up. Chapter1So why do strategic plans fail? According to the Balanced Scorecard Collaborative, there are four barriers to strategic implementation:1. Vision Barrier – No one in the organization understands the strategies of the organization.2. People Barrier – Most people have objectives that are not linked to the strategy of the organization.3. Resource Barrier – Time, energy, and money are not allocated to those things that are critical to the organization. For example, budgets are not linked to strategy, resulting in wasted resources.4. Management Barrier – Management spends too little time on strategy and too much time on shortterm tactical decisionmaking.Only 5% of the workforce understands their pany strategy.Only 25% of managers have incentives linked to strategy.60% of organizations don’t link budgets to strategy.86% of executive teams spend less than one hour per month discussing strategy. – Balanced Scorecard Collaborative Therefore, we need a new way of municating strategy to the enduser. Enter the Balanced Scorecard. At long last, strategic planners now have a crisp and clear way of municating strategy. With balanced scorecards, strategy reaches everyone in a language that makes sense. When strategy is expressed in terms of measurements and targets, the employee can relate to what must happen. This leads to much better execution of strategy. Not only does the Balanced Scorecard transform how the strategic plan is expressed, but it also pulls everything together. This is the socalled “cause and effect” relationship or linking of all elements together. For example, if you want strong financial results, you must have great customer service. If you want great customer service, you must have excellent processes in place (such as Customer Relations Management). If you want great processes, you must have the right people, knowledge, and systems (intellectual capital). In the past, many ponents for implementing a strategic plan have been managed separately, not collectively within one overall management system. As a result, everything has moved in different directions, leading to poor execution of the strategic plan. Like a marching band, everyone needs to move in lockstep behind one overall strategy. Therefore, you should think of the Balanced Scorecard as a management system, not just another performance measurement program. And since strategy is at the center of valuecreation for the organization, the Balanced Scorecard has bee a critical management system for any organization. In 1997, Harvard Business Review called the Balanced Scorecard one of the most significant business developments of the previous 75 years. Balanced Scorecards provide the framework around which an organization changes through the execution of its strategy. This is acplished by linking everything together. This is what makes the Balanced Scorecard so different。 . what is critical to the future success of our strategy? What the organization must do to reach its goals! Perspectives: Four or five different views of what drives the organization. Perspectives provide a framework for measurement. The four most mon perspectives are: Financial (final outes), Customer, Internal Processes, and Learning amp。 David P. Norton So let’s get started with step one。 otherwise the organization may find itself trying to do too many things. Strategy is about choices and making decisions on those things the organization can do vs. those things the organization cannot do. Or to put it another way: A few successes are better than a lot of failures. Therefore, the strategic thrust of the organization needs to be confined to a few major areas. This will provide the “scope” we need for building a set of balanced scorecards. For most organizations, the strategic thrust of the organization will revolve around stakeholder groups。 Service ProgramsLearningSupport Systems amp。 such as More Customers will enable Revenue Growth. Keep in mind that we are trying to link everything together. This is critical to building a great balanced sc