How Balanced is Your Scorecard?

A useful tool to avoid evaluation blind spots

by Jak Carroll, Strategic Sport Solutions

The plan is done. So, what next?

One of the common difficulties facing sport and nonprofit organisations is not planning, but the implementation of their plans.

Many new and useful ideas are often developed during the planning process. However, once the excitement is over, people drift back into old habits.

Staff tend to focus on the same urgent (but not necessarily important) things and Boards tend to have the same old discussions.

We go back to what a colleague of mine calls ”busy work”.

One way of ensuring that an organization sticks to the plan is to establish and monitor key metrics that measure significant outcomes the organisation wants to achieve. And the crucial phrase here is “significant outcomes”.

In this regard, the Balanced Scorecard (BSC) developed by David Kaplan and Robert Norton is a useful tool for ensuring that an organisation monitors outcomes that are significant for the present and the future.

The BSC focuses on four key perspectives:

1.      Financial – this perspective considers the health of the organisation’s finances. It includes things like its fundraising and sponsorship acquisition, cash reserves, expense ratios.

 2.      Customers – this perspective considers the viewpoint of customers or stakeholders. It reflects things like how well the customer (member or client) base is growing and how satisfied those customers are with what the organization is offering them.

 3.      Internal processes – this perspective considers how efficiently the organisation provides its services to its customers. This may be things like how easy it is for new members to register or how much it costs to provide a quality service to each member.

 4.      Learning and growth – this perspective is essentially about people and culture. This perspective considers how well the organization is training its staff, skilling its volunteers, and taking on new ideas that it might use in the future.

Overall, the BSC is essentially about balance.

It balances the outcomes the sport and nonprofit organisation wants to achieve for its customers or stakeholders, with the factors that are drivers of those outcomes.

It balances a focus on current performance, with a consideration of how well the organisation is positioned for the future (learning and growth).

Finally, it balances the use of financial, with non-financial measures.

Most sport and nonprofit organisations do a solid job of monitoring their finances and knowing their customers. However, evaluating internal efficiencies or considering the learning and growth of the organisation, is often more problematic.

While it takes energy to develop the right measures (and you need to work out your strategy first), it can certainly be worth the effort.

As Kaplan and Norton state: “The Balance Scorecard provides managers with the instrumentation they need to navigate to future competitive success.”

Does your organisation need some help with planning or governance? Jak Carroll has extensive experience in the sport and nonprofit sectors, including consulting to organisations and conducting training sessions. If you are interested in some quick advice or having Jak work with you on your next project, please click here