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| Primary purpose Summary Potential benefits Who can use the tool? What resources are needed? Development, ownership and support Social enterprise examples Further sources of information Social Enterprise Social Enterprise London’s (SEL’s) version of the Balanced Scorecard (BSC) was developed expressly to help social enterprises to clarify and articulate their strategic objectives, and decide how they will deliver their multiple bottom lines. It was also designed to give organisations a mechanism to track their performance holistically through both quantitative and qualitative information. This is primarily an internal management tool, drawing upon business concepts. Some of the measures the organisation adopts may also be used for external reporting as appropriate. The organisation essentially creates a visual representation of the critical elements of its strategy for the social side (encompassing social, environmental, and economic objectives) as well as the financial side – or business sustainability. The process then helps the organisation to identify the key drivers or ways of achieving success in these social and financial perspectives by identifying what key stakeholders want from the organisation, and what processes it needs to put in place internally to deliver these things. The process is outlined as follows: First, create a strategy map. Start by asking what the organisation’s goals are, and set between two and four key goals. The organisation works from the top down in the strategy map (see Figure below.) through each perspective, setting objectives in each area.
Sample strategy map
Key: White circles reflect objectives Once the strategy map is written on one page, check that it tells the social enterprise’s story. Can anyone in the organisation pick it up and use it to tell the same story? Create a performance measurement schedule for each perspective, and a line for each objective. After stating each objective from the strategy map, describe how you will measure success, set performance targets on a relevant time frame (i.e. quarterly, twice a year, etc.), and assign someone to be responsible for delivering on, and measuring, that objective. Measure the objectives at regular time intervals using quantitative and qualitative data, use it to track your performance, communicate success to internal or external stakeholders, and check that the strategy is working and assumptions are accurate. Desired outcomes (state social goals)
Potential limitations
Who can use the Balanced Scorecard? Any organisation can use the Balanced Scorecard, including those organisations that are starting up. It is particularly good for organisations in transition, such as voluntary organisations transitioning into social enterprise. Results of the first pilot indicate that any size organisation can use the BSC. Organisations as small as two staff members, in the start-up phase, and large organisations with hundreds of staff members all found it useful. Any sector can use the Balanced Scorecard. It was originally developed for the private sector, but there has been development in the public sector, the non-profit/ voluntary sector in the US and SEL’s work with social enterprises in the UK. Leadership The tool requires ownership at Chief Executive level, but ideally, how the organisation’s goals or other objectives are set, would be an all-organisation activity. Proficiencies or skills An understanding of strategic planning or business planning is very useful, although the BSC concepts can be learned while using the tool. Staff time An initial training course is important. However, ongoing use of the tool mainly requires champions within the organisation to lead the rest. The tool can then be adapted by the organisation as it develops and grows. In total SEL estimates that a first round of implementing the BSC would take roughly eight days, spread out over one quarter. The team responsible for business planning should check back in with the strategy map and its assumptions on an annual basis, with the aim of tying it to the time frame for any existing strategic or business planning processes. Measurement of progress in each of the objectives happens on a quarterly basis. SEL estimates that for enterprises of anywhere from 0-40 people the basic startup time would involve: Two people attending three days of external training in the methodology to serve as internal champions and one staff away-day to create some of the objectives on the strategy map and build buy-in and assemble an internal team. The internal team would then create the next drafts to send around for staff comment, requiring approximately 4-6 meetings of 3 hours each spread out over a period of time. A second staff away-day (or smaller internal training) would be needed to get the BSC up and running. This could take the form of either a complete day, or a series of several meetings to cover each team within the organisation, depending upon its structure. Courses, support, and information Training will be available through SEL on the social enterprise-specific Balanced Scorecard, which will likely be available for a fee (see below). The Balanced Scorecard Collaborative is a network of consultants offering support in using the tool, with emphasis on the model developed by Kaplan and Norton. Many books are available to describe and illustrate how the tool has been used in ‘traditional’ companies, the public sector, and voluntary organisations. Development, ownership and support The tool was adapted from the work of Robert Kaplan and David Norton, but is not licensed. Social Enterprise London (SEL) in its development of the Social Enterprise Balanced Scorecard has made significant changes to the original work in order to suit the UK Social Enterprise sector. Social Enterprise London provides support and is to offer a Social Enterprise BSC training course and manual or guide beginning in the summer of 2005. While there are consultants throughout the UK proficient in the general principles of the BSC, at the time of printing, the social enterprise adaptation sits mainly with SEL.
Other social enterprises involved in the piloting of the BSC were:
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“It has helped us to understand how to go about strategy and to have a checklist of the areas that we should be focusing on.” — Core Design |
