(A) the formulation of corporate vision and development strategy.
Balanced scorecard runs through the whole process of enterprise strategic management. Because of the use of the balanced scorecard, organizational strategy is transformed into a series of goals and measurement indicators. Therefore, the balanced scorecard has higher requirements for enterprise strategy. Enterprises should make full use of opportunities and opportunities existing in the environment, determine the relationship between enterprises and the environment, stipulate the business scope, growth direction and competitive countermeasures of enterprises, rationally mobilize the enterprise structure, allocate all resources of enterprises, and make enterprises gain competitive advantages and formulate corporate vision goals and development strategies suitable for their own growth and development. Enterprise strategy should strive to meet the suitability, measurability, consistency, understandability, motivation and flexibility.
The different life cycle stages of enterprises lead to great differences in their strategies. Therefore, when formulating the development strategy of an enterprise, we should pay attention to the development stage of the enterprise, and different development stages have different development strategies. Usually, the strategy of growth enterprises is to win the market and customers by developing products or services, and to build all aspects needed for enterprise development in order to obtain long-term returns; The strategy of maintenance enterprises is mainly to improve production capacity, maintain or increase market share and obtain rich profits; The strategy of mature enterprises is mainly to harvest the profits generated by the investment in the first two stages.
The balanced scorecard can also make the management often need to re-examine and modify the strategy, so the balanced scorecard provides the management with specific communication opportunities on business strategy. At the same time, because strategy formulation and strategy implementation are an interactive process, managers can understand the implementation of the strategy and can test and adjust the strategy after using the balanced scorecard to evaluate the organization's operating performance.
(B) the organization's business strategy into a series of indicators.
The balanced scorecard is a strategy implementation mechanism, which links the organization's strategy with a set of measurement indicators and makes up the gap between strategy formulation and implementation. The balanced scorecard links the organization's strategy with a set of measurement indicators, which can effectively implement the enterprise strategy. In order to effectively implement the enterprise strategy, we can gradually transform the organizational strategy into four indicators: finance, customers, internal business processes, learning and growth.
1. Set measurement indicators for important financial performance variables.
The financial performance indicators of an enterprise can comprehensively reflect the company's performance, directly reflect the interests of shareholders, and indicate whether the plans and ideas are realized has a great contribution to improving profits. Therefore, it is widely used to control and evaluate the company's performance, and kept in the balanced scorecard. Commonly used financial performance indicators mainly include: operating profit rate, cash flow, income growth, project benefit, gross profit rate, repayment rate, after-tax net profit, net present value and so on.
2. Set measurement indicators for important customer performance variables.
From the customer's point of view, managers must be clear about the target market that enterprises want to join the competition. The target market includes existing and potential customers. Then, managers design some indicators to track the ability of enterprises to create customer satisfaction and loyalty in the target market. Customer view usually includes some core or general indicators related to customer loyalty. These output indicators include customer satisfaction, customer impression, new customer demand, customer profitability and share in the target market.
Although these customer indicators are universal for all kinds of enterprises, enterprises can make personalized choices to make them suitable for the target customer groups with the highest profit and the fastest growth. For example, customer satisfaction, customer impression, customer loyalty and market share are only applicable to those enterprises that want to become important providers of products or services.
3. Set measurement indicators for important internal business process performance variables.
From the perspective of internal business processes, managers must establish all important internal processes when implementing strategies. Internal process represents the process that enables enterprises to complete the following tasks: delivering value variables that can attract and maintain customers in the target market; Meet the needs of shareholders' financial returns. Therefore, internal business process indicators should pay attention to processes that have a significant impact on customer satisfaction and the completion of corporate financial goals.
Every enterprise has a unique process to create value for customers and generate excess financial returns. The internal value chain model provides a convenient model to help companies formulate their goals and internal business processes. The general value chain includes three main business processes: innovation process, operation process and after-sales service process.
As the first part of the innovation process, managers' research on the market mainly defines market capacity, customer preference characteristics and price sensitivity of the target market. Such as the number of market-leading products, the sales degree of newly listed products, etc.
The operation process is the second part of the internal value chain, which represents the production process of producing and sending products. The operation process starts from the customer's order and ends when the product is delivered to the customer. These processes emphasize efficiency, consistency and timeliness. We can formulate relevant measurement indicators in terms of quality, time and cost. For example, the defective rate in processing, the output rate (the ratio of output products to input materials), the arrangement of product batches, the preparation time of raw materials or batch production, the inventory rate, the accuracy of order delivery and other indicators.
After-sales service process is the last process of internal value chain, and it is after-sales customer service. The after-sales service process includes after-sales guarantee, warranty refund and account recovery management. The company's strategy should include providing customers with good after-sales service to enhance the company's image and market share.
The balanced scorecard is very different from the traditional indicators to measure the internal business processes of enterprises. Traditional methods hope to monitor and improve existing business processes. These methods include not only financial indicators, but also some quality and time scales-but they mainly focus on the improvement of existing processes. On the contrary, balanced scoring can establish a brand-new process, so that enterprises can meet the needs of customers and shareholders. For example, through a part of the balanced scorecard, enterprises can develop new processes to predict customer needs and provide new customer services. The difference of balanced scorecard is also reflected in the integration of innovation process into enterprise internal process. The innovation process is a powerful profit driving force for most enterprises in the future. The internal business process of balanced scorecard can combine the objectives and measurement methods of innovation process and operation process.
4. Set measurement indicators for important learning and growth variables.
The learning and growth process of an enterprise includes three parts: personnel, information system and enterprise process. Such indicators can include: first person. Only by giving full play to the enthusiasm and innovation ability of employees can enterprises be in an invincible position. The indicators used are as follows: employee satisfaction. Employee satisfaction is a prerequisite for improving productivity and market share. The evaluation method can be annual survey or rolling survey. The survey items can be divided into: decision-making participation, work recognition, creativity encouragement, talent exertion, overall satisfaction with enterprises, etc. This indicator combines the stability and innovation of employees. Stability of employees. This indicator aims to keep employees employed for a long time. Because enterprises have invested in employees for a long time, employee turnover is the loss of human capital investment, especially for senior employees who master the business processes of enterprises. This indicator is measured by the main percentage of personnel change, especially the personnel change of senior employees is an important indicator for assessment. Innovation of employees. This indicator reflects the development potential of the enterprise, which can be measured by the number of patents applied by employees or the number of non-patented technologies developed each year, and can also be measured by the number of awards won by employees. The annual innovation bonus of employees in some Japanese enterprises exceeds their annual salary, which fully encourages employees' innovation. The second aspect is information system. The production capacity of an information system can be measured by the time it takes to timely and accurately transmit the information of key customers and internal operations to the front-line employees who make decisions and work. The third aspect is enterprise procedures. Enterprise procedures can check employee motivation, overall enterprise success factors and internal operation improvement rate. It must be pointed out that the four aspects of the balanced scorecard are not independent of each other, but a causal chain, which shows the relationship between performance and performance drivers. In order to improve business results, products or services must win the trust of customers; To make customers trust, it is necessary to provide products that customers are satisfied with, thus improving the internal production process; In order to improve the internal production process, it is necessary to train employees and develop new information systems.
According to the above steps, the organizational management strategy is transformed into a series of measurement indicators. We can establish a performance measurement index system, as shown in figure 1:
We can select performance appraisal indicators according to the figure 1 Grasp the assessment indicators should pay attention to the following aspects: a little more expensive, but not too much, seven or eight is more appropriate; You are sensitive but not dull, and you can effectively quantify; You are clear but not vague, what is missing in the assessment; Your key is not empty, so be sure to grasp the key performance indicators. Follow the SMART principle, that is, special, measurable, achievable, relevant and time-based principles.
(3) Linking the strategy with the short-term goals of enterprises, departments and individuals.
The objectives and measurement indicators in the balanced scorecard are interrelated, including not only the causal relationship, but also the combination of the measurement of the results and the measurement of the process leading to the results, which finally reflects the organizational strategy. After the performance appraisal indicators are selected, it is necessary to determine the specific targets corresponding to each indicator. In order to effectively avoid the vertical contradiction between enterprise strategic objectives, departmental planning objectives and individual performance appraisal objectives, and the horizontal disharmony between departments, we decompose the strategic objectives.
The theory of strategic decomposition can be implemented according to the following process, which links the strategy with the goals of departments and individuals.
In the process of strategic decomposition, it is required to decompose layer by layer under the premise of ensuring the realization of enterprise goals, and communicate with each other up and down in the process of decomposition, so as to form a consistent performance appraisal goal. The goal decomposition process is that employees and superiors negotiate to set assessment goals, and then use these goals as the basis for performance appraisal. It is a cyclical process, starting with setting the same strategic goal of the enterprise, and finally returning to this point through circulation, as shown in Figure 2. After the employees set their goals, they will discuss, review and revise them with their superiors, and finally satisfy both sides. While setting goals, employees must also work out detailed steps to achieve them. During the evaluation period, because the target data is already available, it is possible to evaluate the degree to which employees have achieved their goals. During this period, when new data or other data are obtained, the target can be modified. At the end of the evaluation period, the employee uses the actual data he can get to self-evaluate the work he has completed. "Interview" means that the superior and the employee check the employee's self-evaluation together. The last step is to review the relationship between employee work and enterprise work.
In order to make the goal of making performance appraisal indicators successful, enterprises should regard this as an integral part of the whole management system, not just an additional part of superior work. The superior must delegate the power to set goals to employees and give them the freedom to make their own decisions (but require employees to be responsible for their own work results). In the actual operation process, the following points should be noted:
1. Supervisors and employees must be willing to set goals together. The data shows that this goal-setting process can improve employees' job performance 10-25%. This process is effective because it helps employees focus on important work and makes them responsible for what they have done. In addition, this process also establishes an automatic feedback system, because employees can often self-evaluate their work according to their own goals.
2. Goals should be long-term and short-term, quantifiable and measurable. Moreover, when setting goals, you must also explain the steps to achieve them.
3. The expected results must be under the control of employees, because we mentioned that there may be standards being polluted.
4. Goals must be consistent at all levels.
5. Supervisors and employees must set aside specific time to review and evaluate the objectives.
(four), the specific implementation of the strategy, feedback and mid-term adjustment and revision.
After the performance appraisal indicators and targets are determined, a systematic and scientific performance appraisal content setting system is formed. It is necessary to formulate the Performance Appraisal-Work Schedule (as shown in table 1), and record the contents of employee performance appraisal in writing as the basis of performance appraisal.
Table 1: Performance Evaluation-Work Schedule
During the implementation of the plan, the superior shall conduct timely and effective inspection and supervision, and make reasonable adjustments according to the changes of internal and external conditions. In order to effectively implement the plan, enterprises should establish smooth feedback channels. So that the problems encountered by employees in the implementation process can be solved in time.
(5) Establish a sound assessment system and reward and punish according to the completion of the balanced scorecard.
Establish a sound assessment system, directly link employee bonuses, promotion, education and training with the balanced scorecard completed by employees, and form an effective management cycle. In the salary structure, performance appraisal and year-end bonus should be established to reward employees who have completed the balanced scorecard well and punish employees who have not completed it well; In the aspect of education and training, we should improve the study for excellent employees and make compulsory study for bad employees; In terms of promotion, establish a mechanism of survival of the fittest, promotion and demotion, and implement the promotion of the able, the retreat of the mediocre and the fall of the flat. The implementation of the balanced scorecard can evaluate the performance and ability of employees, stimulate the enthusiasm and potential of employees, maximize the development and utilization of human resources in enterprises, and thus improve the performance level of the whole enterprise.