What Gets Measured, Gets Better

A balanced scorecard helps make strategies more effective by defining relevant metrics that link back to your objectives.

 
 

The Balanced Scorecard

With planning season in full swing, credit unions are establishing future goals and determining how to attain them. To translate their strategies into action, many top credit unions utilize a balanced scorecard, a management tool that helps to identify the key drivers of credit union success, establish specific goals, and measure progress throughout the year.

The balanced scorecard framework helps to link a credit union’s strategy with the day-to-day business activities. A well-designed balanced scorecard ensures that the business model and daily operations are properly aligned with the credit union’s goals.

Designing A Unique Scorecard

As the name would suggest, a Balanced Scorecard seeks to “balance” or assign the appropriate level of focus and attention to the key areas of a credit union’s operations. Developed by Robert Kaplan and David Norton, the traditional balanced scorecard identifies four broad themes that should be measured (see below). However, the scorecard can be adapted to fit the unique needs of any credit union.

Whereas the categories themselves are rather broad and general, the specific metrics that a credit union establishes are unique to the credit union. Effective balanced scorecard’s identify specific metrics that are aligned with the credit union’s overall strategy. Below are examples of specific examples of key metrics.

The Traditional Balanced Scorecard and Selected Metrics











The Big Challenge: Implementation

The challenge that most credit unions face is with the actual implementation of the balanced scorecard. There are several issues that can prove challenging:

  • Establishing the framework that will lead to desired results.
  • Defining the appropriate measurements that support the strategy and drive results
  • Ensuring that the metrics can be quantified; qualitative metrics, while necessary at times, are less effective yardsticks
  • Communicating the balanced scorecard to staff and aligning their efforts to ensure successful results
 

 

 

Oct. 3, 2005


Comments

 
 
 
  • This is the best article I've ever read. It changed my life.
    Anonymous
     
     
     
  • Nicely done! Precise description of what can seem like an overly complicated process. The Balanced Scorecard approach can help to prevent time and expense wasted in uneccessary areas.
    Anonymous