The Financial Perspective

Kaplan and Norton, in designing The Balanced Scorecard, do not disregard the traditional need for financial data. Timely and accurate data will always be a priority, and managers will do whatever is necessary to provide it. In fact, often there is more than enough handling and processing of financial data for many organisations.

Be clear about what financial data you want to track and what the purpose is to you for knowing that information. Also, as shown in the previous entries of this blog series, it’s important to understand what all of the various input factors are for each financial target.

If you have a target of making $X this quarter, then how many new customers do you need to attract? What processes are in place to attract those customers and ensure they convert to sales and are satisfied? And who knows how to do this, or if they don’t now, how can you teach them?

Coaching Exercises

Here are some questions to ask about your business. There are many more to be asked, so this is just a starting point.

  1. What are your high-level financial objectives?
  2. When do they have to be achieved by?
  3. Is there a particular order in which they need to be achieved?
  4. How are you evaluating these as important?
  5. How are you measuring these objectives? In other words, what data and reporting mechanisms do you have in place?
  6. What strategies do you have in place already, or which could be designed, to address each of the objectives? In some cases, there may be more than one strategy required to achieve the desired outocome?
  7. For each strategy, do you have any dates identified to achieve them?
  8. For each strategy, what are the measurement criteria and how specifically are you going to collect the data?
  9. Who is responsible for each strategy? What reporting do you need from them?
  10. For each objective, and for all stakeholders related to the achievement of that objective, what learning and devleopment objectives must also be met? These may also link to the internal business process objectives and the customer objectives.
  11. For each objective, what internal business process objectives must also be met? These may link to the customer objectives as well.
  12. If you have already been measuring certain financial objectives, and have been able to identify that one or more of them is underperforming, which related financial, customer, internal business process and/or learning and development objectives are also underperforming? This information may help you in identifying root cause of the problem, and from this awareness, you can explore new choices and actions to implement to correct the issue.
  13. If you’re unsure about the objectives, the data, causes of problems or opportunities to improve the situation, whom wihin or outside of your organisation could you be turning to for assistance? This is potentially part of your own learning and development.

As always, if you need any further personal support in response to any of these coaching exercies, please consider using the service.

All the best,

Noel Posus – Master Coach