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Can the Balanced Scorecard be used in a startup? Are there differences between the traditional model and the one that would be used in a startup? I'd like to understand how the BSC can make the startup process more efficient. |
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My opinion is that scorecards are a bit like golf clubs - they all kinda look the same, but each has a very different application. Start-up scorecards look like most any other scorecard (with one significant difference) but they serve a completely different purpose. First, the difference. The Leadership Team should really weight the Strategic Objectives (since these Objectives make up 100% of your strategy, the % weighting across them should also equal 100%) Start-ups typically have over 50% of their weighting in the bottom two perspectives (Enablers and Internal). As the organization matures the weighting move up the perspectives. Concerning the application - in start-ups the strategy map helps ensure all employees understand and are aligned to the strategic goals while everyone goes in a million directions. The map helps inform investors of what the organizations is trying to do and the scorecard ensure they are fulfilling the promise. Customers use the strategy map to differentiate this new organization from its competitors. I like the golf clubs analogy. It works for organizations that are not startups as well. Lots of people look at scorecard templates and think that they might work "as is" for their organization. The most successful organizations will modify the templates to match their strategy, rather than take a generic strategy.
(Jul 09 '10 at 15:45)
Ted Jackson
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The framework for a Balanced Scorecard is quite effective in start-ups for guiding and communicating the strategy. It is a good way to regulate the discussion with all of the employees about what you should and shouldn't be doing. In the case of high amounts of innovation, the process of having strategy review meetings is a good mechanism for checking in and validating the hypotheses. Where I have seen startups struggle is with the measurement piece of it. Most startups can do fine with financial measures, but looking closely at internal processes or employee satisfaction and skill gaps becomes a bit of overkill in a true startup. Also focusing on customer satisfaction with a limited number of customers also doesn't make a ton of sense. So, if you are in a startup, I would recommend using the framework of the Balanced Scorecard, but not getting too stressed out about the fidelity of all of the measures at this point. |
