Necessity of the balanced scorecard in effective strategic management

The balanced scorecard was developed as a tool that is necessary for the operationalization of organisational strategies. It provides a framework through which the organisation not only gauges the viability of its strategies but also creates a plan for attaining them. In the context of change management, creation of objectives to reinforce strategies can be likened to the concept of maintaining the momentum for change. The organisation may have a strong overall vision but would only be motivated to continuously make efforts when they have to achieve short term goals from time to time. The BSC therefore adds meaning to strategic management in terms of maintaining momentum.

A practical evaluation of the strengths and weaknesses of the organisation also forms an important benefit of using the balanced scorecard. This tool of strategic management helps by getting the management to identify the specific activities that would be needed to achieve the overall strategies. Upon identifying them, an evaluation is therefore done to identify the capabilities that must be possessed or mastered in order for the objectives to be achieved. In this process, the organisation must identify the resources or capabilities that must be possessed or these objectives to be met.

The other element of the balanced scorecard is that it works like a jig-saw puzzle where different parts have to be brought in and fitted in their respective places for the whole to make sense. The balanced scorecard compels the organisation to thoroughly review every function and department. It cements the fact the organisation is a bundle of resources and functions that must be organised to achieve a common goal. Effectiveness and efficiency of each of these functions is necessary for the overall goal of the organisation to be achieved. In the absence of such a management tool, managers are predisposed to concentrate on the functions that are considered to be most important.

For example, an institution of higher learning could concentrate on enhanced value of its teaching services since this is the core function of the organisation. This could be done at the expense of administrative functions which also play a very important role in influencing customer satisfaction as well as the ability of the organisation to attract and retain customers. Similarly, a manufacturing company could overly emphasise on efficient production while ignoring important elements such as excellence in knowledge management. This would lead to it being less competitive in terms of ability to understand changing market preferences and how the organisation can cater for such needs profitably.

The main functions in the organisation include financial functions, marketing functions, operational functions, social responsibility functions and administrative functions. In some of the cases, the goals of the different functions could be seen to be in competition with each other. For instance, where the marketing department requires an extensive branding campaign while the financial goal is to cut costs and achieve cost effectiveness, the strategic manager would need to consider where to strike the balance. The balanced scorecard enables such a manager to understand the different departmental objectives and understand what needs to be prioritised. This makes it very valuable to the organisation.  

Strategic management and the balanced scorecard

A strategy is only as good as its implementation. No matter how brilliant an organisation’s strategies are, success will only be realised if there is successful implementation. Once an organisation has come up with a vision and overall strategic direction, the next step is to translate these strategies into operational objectives and plans. These objectives ought to be SMART in that they must be specific, measurable, achievable, realistic and time-bound. In line with the concept of the organisation as a collection of resources and functions, it is important to have all these functions aligned to the overall strategies. The balanced scorecard plays this role by enabling alignment and synergy between individual functions and the overall organisational goal. This means that the concepts of strategic synergy and alignment are at the root of an effective implementation of the BSC.

By focusing the attention of managers to every unit within the organisation, the balanced scorecard plays an important role. The role is: to ensure that a holistic view of the organisation is assumed before implementation is started on any of the functions. It facilitates a detailed reflection of the overall organisational goals where the feasibility of various measures is determined before the overall strategies are adopted and implemented. The BSC therefore helps in breaking down the overall strategies for purposes of verifying practicality as well as identifying possible weaknesses in the strategies that would warrant modifications. The BSC therefore makes the strategic planning process more explicit and therefore more likely to lead to success.

The BSC can also be said to be very important in facilitation of strategic alignment. Where departments or functions within the organisation are managed independently in terms of planning and implementation, excellence can be achieved but little success in strategic alignment. Different functions are strategically aligned when each of them contribute to achievement of the same goals. The outcome of each function is therefore likely to reinforce the outcome of other functions. This is called synergy: where the whole is greater than the sum of individual contributions in each department. The balanced scorecard facilitates this synergy by putting each department or function in context: describing the role they are expected to play in the bigger plan and the need for coordination with other departments.

The balanced scorecard can also be seen as a tool for enhanced organisational cohesion. Any strategic manager adopting the BSC would want to consider that every function within the organisation needs to be utilised in a manner that helps in achieving the overall goal. With this consideration, employees will always anticipate that any change in their departments could warrant a change in other departments. This provides the incentive for timely communication of changes and a timely review of procedures in related functions. The keenness with which these reviews are conducted contributes to overall cohesion. Organisations that are innovation-oriented are therefore able to thoroughly analyse the implication of targeted changes and ensure that all modifications are factored in. This helps to facilitate effectiveness and sustainability. This makes the balanced scorecard very important for effective strategic management in any organisation. 

Do promotions boost brands? Insight for strategic managers

There are several ways in which promotions can be used to promote brands. Promotions focus on specific themes or activations which could be related to savings, trust, cultural connectivity, and convenience among others. Promotions are short term marketing campaigns that are specific and tailored to promote purchasing or getting the market to perceive the brand in a given way. They can be used as important brand activation tools hence an important strategic marketing tool.

Promotions related to savings and price have a positive effect in cementing the image of a brand that promotes value for money. A good example has been Tesco which has managed to strategically develop a large pool of loyal customers. One of the reasons for its good performance has been based on its ability to provide everyday value for the customers where they are able to save while enjoying the best quality products in the market. Such a brand image appeals to consumers who are rational and likely to consider the need for value and quality before making their purchasing decisions.

Other aspects such as cultural connectivity focus on emotional branding and creation of non-rational bases for the consumers opting to purchase their products. Where the emotional bond between the organisation and the consumers is high, the purchase decisions are likely to be in favour of the organisation. Promotions that focus on creation of the cultural connectivity and building of an emotional bond are considered to be very strategic because such bonds tend to be very unique. The consumer is unlikely to be convinced by rational arguments advanced by competing brands. Organisations enjoying a high level of emotional attachment with consumers tend to enjoy much higher levels of customer loyalty than those whose customers are driven by rational reasons such as price and quality.

Promotions associated with cultural connectivity will often focus on consumers being tied to something bigger or a bigger cause. Some of these bigger causes could include expression of their endorsement of certain cultural practices or contribution to charity among others. The messages used in such promotions are strategically designed to focus more on the feeling enjoyed by the shopper or how the society perceives the shopper than they focus on the actual qualities or pricing of the products. With this approach, the brand or products represented by the brand get to be associated with this form of cultural and emotional connectivity.

The concept of trust is also important and promotions targeting this have also been known to contribute significantly to the competitiveness of organisations. There are many ways of seeking to build trust. For example, organisations can create promotions that get consumers involved with some of their processes. For instance, a joint approach to product design in the manufacturing process can be highly effective in building trust. By allowing the consumer to make contributions on how they would want their products to be like, they become more confident that the organisation understands them and is keen to factor in their suggestions. This involvement can be used by strategic managers to get consumers to have a higher level of trust in the organisation. 

How to strategically market to the Centennials

Centennials are consumers aged between 0 and 19. They are reputed for having an unconventional attitude that does not conform to known stereotypes. These groups of consumers are more pluralistic and ready to accommodate diverse perceptions and views. Any strategic manager would want to appreciate that this is a highly potent group making up to one-third of the global population. In the UK and the US alone, their spending power is estimated at $80bn every week. It is a group that every organisation would find pragmatic to pay attention to.

In reference to values, the centennials are noted rank lower than the millenials in terms of being willing to spend. They have been introduced into the consumer markets at a time where consumers are reasonably strained financially hence having to be very thrifty. It is the influence of these centennials that has popularised the perception that low price does not have to translate into a poor quality. The centennials demand for the best quality but still insist on paying the lowest they can for such quality. It is a trend that makes the strategic management principle of lowering operation costs to charge more reasonably quite popular across the world.

Strategic managers have mainly focused on the millenials while marketing to the youthful consumers; in oblivion of the fact that the young consumers are no longer associated with this group. This has often led to reduced effectiveness and diminished returns of investment made into marketing. The centennials have a unique value system in that they are very conscious of who they are and how the world around them works. They are significantly different from the millenials and therefore need to be studied more intensively and their value perceptions understood. For instance, the millenials were consumption-positive while in their teens with the tendency to seek to purchase as much as they could lay their hands on. The centennials are increasingly thrifty and evaluate the need for certain products before opting on whether or not to consume them.

The difference above has an implication for strategic marketing message design where one marketing to Millenials would advisably focus on the feel good effect while that targeting centennials would need to focus on the value of such products. The latter group does not want to feel as though they are being wasteful. They want to consume but be convinced that they have made the right call in choosing to consume. It means that while marketing to the centennials, the post-purchase stage should be as important to the organisation as the pre-purchase stage.

One of the factors that influence centennials to be thrifty and realistic is the experience they have been exposed to. The global recession has brought out the reality of how detrimental and unsustainable a materialistic culture can be. They have been introduced to the culture of resilience and consciousness in spending. They are therefore more realistic and only likely to spend when they perceive a product or service as adding value to their lives. This means that brands seeking to base their campaigns on emotional branding need to be careful to go for perceptions that are in touch with these realities.

The keenness of centennials on value and consumer experiences also makes them keener than the older customers on sharing their perceptions on brands and products consumed. This group poses quite a challenge to strategic managers as their tendencies increase the risk of the organisation losing control of the branding process. A wide variety of social media platforms need to be used actively by these managers to not only understand the consumers but also try to manage expectations and involve the consumers in the branding process. It is the businesses that will learn how to navigate dynamically while engaging these centennials that will most likely grow into formidable brands.