Training on the implementation of this management tool was attended by key officials
One of the strategic and performance management tool used by many successful companies across the world, “Balance Scorecard” (BSC) is being introduced for the first time in Bhutan by DHI (Druk Holding and Investments). DHI also organized a five- day workshop on it that concluded yesterday.
Representatives from companies owned and controlled by DHI attended the workshop which will enable them to use the management tool.
“Balance Scorecard is the tool for management that is being used in setting long-term strategy of the company and converting the long-term strategy into operational plan, and managing the performance of company based on the operational plan and judging it,” DHI director of corporate performance department, Dr Damber S Kharka said.
The tool helps to link overall corporate strategic plans to measurable targets and initiatives in companies based on the performance measurement focusing on four areas; financial, customer service, internal processes, organizational change or learning, and growth.
Giving the insight into the four interlinked components, Dr Kharka said that for better financial performance of a company, it is done by either reducing cost or increasing the return of investment.
Hence, the customers must be satisfied with the quality and timely service or product, thereby attracting more customers, ultimately contributing to the financial growth. The good internal processes enhance good customer relationship, which improves the business process, and thereby would be able to cut down time in delivering services and wastages by setting transparent and friendly systems.
Business process should improve so as to gain customer satisfaction that is well-linked between internal processes and customer satisfaction, and then link with financial aspects for continued learning and growth for the people working with the companies.
According to DHI officials, the company employee should be motivated, trained, and better skilled than others workers. The need for better system to improve performance, such as IT system was also pointed out.
“These linkages have to be clearly understood, to set targets in those areas, to come up with projects and initiatives in each area which can be measurable,” said Dr Kharka, “It helps in setting long-term strategy, breaking long-term strategy into tactical annual plans, setting key indicators on each of this objectives and setting key initiatives on each of this target.”
The training aims at ensuring efficient decision making level, to create awareness, and to further train the employee across the hierarchy in the company. It will also help CEOs and board directors in reviewing and refining the planning document and differentiating between the targets, initiatives, and measures.
The concept was introduced by Kaplan and Norton in 1992 at Harvard. According to them, this concept was articulated from a prominent British scientist, Lord Kelvin’s word, “I often say that when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind. If you cannot measure it, you can improve it.”
DHI plans to implement the tool in all its companies by next year. The first day of the training was attended by the Chairman, CEOs and board of directors from DHI companies, and the later attended by the senior management, and the last two days for the DHI officials. Dr Michael Court, managing director and senior associates of Balance Scorecard, Australia was the trainer.