BSC is a strategy evaluation model that is used to obtain a holistic view of a particular organization success. This framework is applied all around the world in numerous institutions, and is highly appreciated for its comprehensive design and easy readable results. However, this evaluation system has its cons: if it is designed improperly, it can lead to wrong conclusions and therefore damage the company's productivity. In order to prevent undesired economical consequences we recommend you be careful and diligent in creating your Balanced Scorecard. Below in this article we are going to share the most essential tips on designing this framework on example of a hotel unit.
Step #1: Involve Leaders
Arrange a seminar devoted to BSC introduction. Explain your leading managers (senior managers, supervisors etc.) the importance of the evaluation system for your hotel business success and show how it can increase their wages. Engagement of the unit's personnel (from chambermaids and porters to receptionists, waiters, cooks and their supervisors) is crucial in this undertaking. Balanced Scorecard approach requires participation and dedication of all employees and managers.
Step #2: Identify and Set up Goals
Next step is to determine the most crucial goals which can help your company compete and become a leading provider of the service in the market. In fact, this performance evaluation system is all about setting goals and reaching them. It is advisable to make a SWOT analysis (SWOT stands for Strengths, Weaknesses, Opportunities and Threats). The obtained data on major competition is then used to set up actual goals. For instance, your major competitor could be opening a new unit and offering 50% discount to all customers that could be a significant threat to your hotel's success in the following month.
Step #3: Examine Internal Business Processes
Conduct a profound research on the key internal processes for productivity and quality. Consider ways to turn the qualitative processes into quantitative data: appoint points for accuracy, waste, timelines and other important things. These measurements are then presented in the form of KPIs (Key Performance Indicators) for Internal Processes Perspective in your Balanced Scorecard. Knowing the tiniest details of your business's processes will help you understand the customers' reaction. For instance, if you notice that sheets in the hotel rooms are ironed improperly, or that the flowers in the hall aren't fresh you may consider speaking to responsible managers on this topic. Improving the internal processes of your business is a key to improving the overall quality of service and therefore - customers' satisfaction.
Step #4: Consider Ongoing Evaluation Methods
Once you have identified your Key Performance Indicators for each perspective of your BSC, you need to start data mining. For this you will need to create an evaluation system for your customers' satisfaction, employees proficiency, quality of internal processes and other indicators. These can be specially designed evaluation forms, questionnaires, and even 'mystery shoppers'.
Step #5: Make Conclusions
When the Scorecard is ready, you can interpret the results and share them with your colleagues. The Scorecard will show you what aspects you need to pay attention to in order to improve the overall performance and financial health of your business.
