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Modern Management Theory on Value Based Management
Traditional performance measures are insufficient to gauge performance and guide organizations in today's rapidly changing, complex economic landscape. Organizations need to link performance measurement to strategy, and must measure performance in ways that both promote positive future results and reflect past performance.
The Balanced Scorecard has developed over the last eleven years as a powerful way to implement strategy and continuously monitor strategic performance. Creating a strategy focused organization (the phrase coined by the founders of the Balanced Scorecard methodology) is a significant, challenging culture change for many organizations. Success in achieving this change requires:
·Consistent executive support and involvement.
·Education, communication, and visibility of the strategy and measurements of its effectiveness throughout the organization.
·Constant feedback loops so that strategy is an every-day consideration.
·Tools to enable non-technical users to understand the key drivers of the measures.
·Translation of the strategy to operational terms so that alignment to strategy and implementation of it occur at all levels of an organization.
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