Balanced scorecard

cmi or balanced scorecard

Although many of the methods seen so far, such as the JIT, have originated in the automotive industry, not all come from this sector. Others have also made great contributions to the industry, such as the semiconductor with the CMI (Balanced Scoreboard) or BSC (Balanced Scoreboard) in English.

Another management model that directs the strategy towards a series of goals that are related each. The main purpose of this model is to implement and communicate the strategy to be followed throughout the company, be it economic / financial, development, processes, etc., and in a near, medium or distant place.

What is CMI or Balanced Scorecard?

balance scorecard what is it

El HCM is a tool for business management that is capable of measuring the evolution of a company in the activity in which it operates, as well as in its strategic objectives and the results obtained. And he does it from a fucking strategic point of view and with a general perspective.

But as is evident, even more so in large companies, aligning all the people who work in a company and all its resources is not something easy. That is why you need a control panel from which to control everything. And it will be done through financial or any other type of control indicators.

For this, periodic information is needed to monitor and analyze whether they are being achieved. the established objectives previously or not. Thus, decision-making or change of course, if necessary, will be much faster and more accurate. On many occasions, it does not need total course changes, but simply detects possible deviations in the strategy and corrects them to get closer to the goal set.

This CMI not only works well in large companies, which I have mentioned above, also for SMEs. Unlike other methods, in the case of the balanced scorecard, the effectiveness will not depend so much on the resources or size of the company. In addition, it is not incompatible with other methods and can even be perfectly complemented with advanced business analysis to make new sound decisions.

About us

Although the original idea dates back to Art Schneiderman, in 1987, and that he would later work withRobert Kaplan and David Norton, the latter are the authors recognized as architects of the CMI as a management system for the first time in 1990 and specifically for a semiconductor company (the famous Analog Devices Inc.). The first is a professor at Harvard Business School and the second is also a professor and a well-known businessman.

Harvard University

Both, in early 1992, presented the Balanced Scorecard model that they had previously developed in the magazine Harvard Business Review. That was in the post The Balanced Scorecard: Translating Strategy in Action. In it they made it clear that it is a mistake to only take into account traditional financial indicators, that is, income, expenses, stocks, etc. From this new point of view, it is also important the intangible assets of the company, such as customers, skills, motivations of employees, etc. All of this can be a source of competitive advantages.

Therefore, a new tool to update all methods or systems to date. A new global view of the business, thus achieving the results defined in the strategic plan.

Balanced Scorecard Insights

The Balanced Scorecard can be viewed from different points of view:

  1. Financiero: it is one of the main ones, the objective of achieving economic benefits and achieving the maximum possible performance and reducing costs.
  2. Learning / growth: From this perspective, the value of the people who make up the company and the technology are addressed. Mentors and tutors will play a crucial role within the organization, as well as improving employee attitude and fluid communication. But you should not understand the concept of learning as a traditional training method.
  3. Client: from this point of view, the main objective is to satisfy the customer. That is what is taken as an indicator of whether or not the company is meeting its expectations. This will strengthen the reputation of the company and improve its value against the competition.
  4. Internal processes: from this perspective, it is easier to obtain information by indicators of the different business areas. The indicators in this case can be quality, productivity, innovation, commercial or financial impact, etc.

Each of these perspectives should not be overburden with more than 7 indicators or it will not be effective.

Advantages of the CMI

When a Balanced Scorecard is properly implemented in a company, the and advantages they can be diverse:

  • You get a broader and more detailed view of the business. And as you can see, it goes beyond financial indications.
  • Allows check the evolution of the company. This allows better strategies to be drawn up for the medium and long term, as well as making new quick decisions so that the objectives set are met.

Implement a Balanced Scorecard

implement balanced scorecard

To implement a BSC in a company, regardless of its size and activity, a series of steps must be followed followed for the design of the plan:

  1. You must first bear in mind the objectives to get. That is, where you want to go, what is the corporate goal or vision.
  2. After it is defined the strategy to achieve these goals. In other words, it is the roadmap to determine the steps that must be taken to achieve the objectives within the established period.
  3. Determine the perspective and indicators that will be used as a reference to measure progress and evaluate results.
  4. All members of the company must know well the detailss of the plan so that they are architects of the strategy and roadmap. They will all have a single purpose, a single path to follow. Only then can all resources be directed towards these objectives.
  5. The procedures they must be consistent and transparent. Only in this way will they provide adequate data for monitoring the process and future actions that have to be taken in constant feedback ...