(MENAFN- Muscat Daily) Muscat- Experts say organisations are incorrectly measuring themselves - harming their long-term success. Organisations used to care most about profits and finances, but they should also measure how good they are at customer satisfaction, internal processes, and investing in employee development.
It's called the balanced scorecard, 'BSC', and it's made up of four components: Finance, customers, internal process, and learning and growth. 'The balanced scorecard brought a new perspective to measure,' said Said al Harthy, executive director of Omani consultancy Tanfidh Training and Consulting.
Tanfidh hosted its 'Transformation Through Strategy Execution and Innovation' conference on Monday. Experts say that organisations which correctly implement the strategy have improved their performance from ten per cent to 60 per cent.
'It sets a focus and a goal for the future, and how do we measure that we're getting there,' said Peter Watson, senior partner at Canada-based PM2 Consulting.
'Finance isn't always the right measure.'
However, implementation is exactly the problem. While the BSC strategy is well-known, not enough organisations executive it well. That's because it requires synthesis across organisational departments, the top management must be committed, and it requires change, which can be difficult for organisations.
'Very few people are doing it effectively, mostly because of discipline of management. You have to have discipline,' said Watson. Only between 10-30 per cent of companies actually effectively implement their scorecard strategy, according to Paul Niven, author and founder of US-based Senalosa Group.
'We're so poor in executing strategy,' Niven said. 'We tend to chase so many things. The biggest problem inhibiting growth is a lack of focus.'
He said often the strategy was not communicated well enough to employees. 'Execution requires everybody in the organisation to make it happen,' he said.
Watson said organisations will also have to adapt to the millennial generation workforce.
'The single biggest factor is how do we motivate the new generation of employees, the young people, the millennial. Different views, different values. How do we get them involved?'
Harthy said the role of an organisation's leader becomes more important. 'You need a change in management process. Eventually it depends on the leader, because the leader is very important to promote the change,' he said.
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