Financial2 objectives
What do we need to show our owners or financiers?
Get revenue growing again
KPI: Revenue compared with last year · target +3% by the end of this year
Initiative: Discuss customers' reasons for leaving in the management team every month
Keep the claims burden under control
KPI: Claims paid as a percentage of premiums · target Below 65%
Initiative: Monthly analysis of the largest claim items
Customer2 objectives
How should customers experience us to make the vision come true?
Customers feel heard
KPI: Questions answered within two working days · target 95%
Initiative: Daily stand-up with the backlog of questions on the board
Policies without errors
KPI: Policies right first time · target 98%
Initiative: Check of name and address at intake
Internal processes1 objective
Which processes do we need to excel at?
Handle applications faster
KPI: Average lead time of an application · target 5 working days
Initiative: Value Stream Map of the application process, cut duplicate checks
Learning and growth1 objective
How do we keep up our ability to improve?
Employees know what the customer wants
KPI: Employees who took part in the customer needs survey · target 100% by the end of Q2
Initiative: Customer needs survey with the Kano model, results in every team meeting
Your scorecard is balanced.
Every perspective has an objective with a measurable KPI and an initiative. Now the steps from the e-book: communicate, plan and make measurable, and evaluate. Put the KPIs on the board and discuss them in the team meeting, not just once a quarter.
The four perspectives
Robert Kaplan and David Norton gave the Balanced Scorecard a stage in Harvard Business Review in 1992. The idea: a strategy only becomes executable once you translate it into measurable objectives across four perspectives that keep each other in balance.
- Financial: what do we need to show our owners or financiers?
- Customer: how should customers experience us to make the vision come true?
- Internal processes: which processes do we need to excel at?
- Learning and growth: how do we keep up our ability to improve?
In four steps
- Make the vision and strategy concrete. One paragraph everyone can retell.
- Communicate. The scorecard is not a management secret; employees need to know what they are contributing to.
- Plan and make measurable. A KPI with a target value and an initiative per objective. Use the KPI tool to get every KPI SMART.
- Evaluate. Not just once a quarter: put the KPIs on the board and discuss them in the team meeting.
Why balance?
In the practical example from our e-book, a company steered almost exclusively on costs for years. Employees knew everything about spending and hardly anything about the customer; complaints were dismissed internally as grumbling. Only when revenue declined structurally did it turn out that customers did not feel seen. The scorecard brought the customer perspective back, and with it, eventually, better financial results too. That is why the tool gives a signal as soon as a perspective stays empty or one perspective dominates.