The level-by-level distribution of goals improves the quality of balanced scorecard management in the organizational units involved in its construction. This is possible due to the vertical integration of settings. Higher units consistently transfer goals and strategic activities to the BSC of lower sections of the organization.
The strategy that is specified in the corporate Balanced ScoreCard is redistributed to all management levels when cascading. Then, long-term goals, indicators, settings and improvement actions need to be clarified as much as possible and adapted for each department and team.
Thus, the BSC of all company structures and individual employee work plans must be coordinated with the general BSC. That is, the chain looks like this: Corporate Balanced Scorecard – BSC of the division – BSC of each department – Personal activity schemes of the team member. Individual plans should be aimed not at improvement, but at obtaining accurate results in the workplace.
So, cascading establishes ios database connections between levels of the hierarchy, and with their help consistently transmits the corporate plan for long-term activities from top to bottom.
Step 7: Monitoring Strategy Implementation
To improve performance, a balanced scorecard analysis and an assessment of the organization's performance are required, which are carried out by management and responsible persons.
Control of strategy implementation
It is necessary to ensure that strategic goals remain relevant for the company, so their importance should be determined at least once a year. The assessment takes into account the following characteristics:
Are the selected indicators suitable for determining the extent to which the set goals have been achieved?
Is it easy to calculate the value of these quantities?
Have the target values of the developed indicators been achieved in the structural unit?
Have the higher units achieved the planned results?
What contribution does the structure of the firm make to achieving the top-level goals?
The assessment of the effectiveness of the balanced scorecard system consists of determining whether it is possible to calculate the actual value of the indicator based on the data of the reporting period.
It is also necessary to compare the planned and actual values of the developed settings and find out the reasons for the deviations. Based on the results of this analysis, it is necessary to adjust the target value of the indicator or develop corrective measures that will be aimed at achieving the level set earlier.
When assessing a lower level BSC, one should focus on whether it contributes to achieving the objectives of the next level.
It will also be useful to forecast target values of indicators for a long-term period.