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24.3 Develop Balanced Scorecard Objectives Aligned with Strategy

Aligning Objectives with Strategy​

To develop a balanced scorecard, start with the company's mission and strategy. Identify strategic themes (e.g., customer intimacy, operational excellence, innovation).

Steps:

  1. Identify strategic themes
  2. Define objectives for each perspective aligned with themes
  3. Specify cause-and-effect relationships
  4. Prioritize objectives (focus on critical drivers)

Strategy Example: Le Petit Bistro​

Mission: Provide exceptional dining experiences with local ingredients.

Strategic Themes:

  • Customer experience
  • Operational excellence
  • Sustainable growth

Balanced Scorecard Objectives:

Financial:

  • Increase revenue from catering by 20%
  • Improve profit margin by 5%

Customer:

  • Achieve 95% customer satisfaction
  • Increase repeat customers by 15%

Internal Process:

  • Reduce kitchen errors by 30%
  • Implement local sourcing with traceability

Learning & Growth:

  • Provide quarterly training on service excellence
  • Reduce staff turnover to less than 10%

Strategy Map Example​

Learning & Growth → Internal Process → Customer → Financial

  • Training staff → Better service processes → Higher customer satisfaction → Higher revenue
  • IT investment → Faster ordering system → Improved customer experience → Higher repeat sales

Objective Prioritization​

Not all objectives are equally important. Prioritize based on strategy and resource availability.

Tools:

  • Impact vs. effort matrix
  • Weighted scoring
  • Management workshops

Balanced Scorecard Workshop​

Hold workshops with cross-functional teams to:

  • Review mission and strategy
  • Brainstorm objectives and measures
  • Agree on priorities
  • Assign responsibility

Luxembourg Compliance Note​

In Luxembourg, involve key stakeholders (finance, operations, HR, compliance) to ensure balanced scorecard objectives address regulatory requirements (e.g., EU sustainability reporting standards).

Think It Through​

Why is it important to involve multiple departments in developing balanced scorecard objectives? What risks arise if only finance develops the scorecard?