Translated from Português (Brazil) • View original Do you know what BSC means? This is a method that benefits your company in the long run as far as the organization is concerned. Balanced Scorecard, or Balanced Performance Indicators, is a performance and management measurement methodology developed by Harvard professors Robert Kaplan and Davi. When we talk about BSC, what happens to organizations is the top-down_ _configuração. In other words, it is top management that sets goals so that they are then "launched" until they become known to employees. This method of organization consists of strategic management that allows traditional financial control, monitoring the company's future strategies through measurement mechanisms, transforming the vision and strategy as a whole.
BSC Features
The Balanced Scorecard in Strategic Management gathers strategic objectives from results measured by metrics. The metrics, (which are the measures of the BSC) help you estimate how successful you will be in this pursuit of established goals. With the BSC, the objectives are usually defined in the long term, being at least one year and can reach three or five years. Based on these questions, the "roadmap" is created, the themes of the initiatives to achieve them. Below are the 4 steps necessary for this strategy to work: 1: Financial. To be successful, what should be the results for shareholders and investors? In this metric, the long-term objectives are evaluated in relation to the profit to be obtained for the shareholders of the company in question. 2: Customer. To achieve our vision, how do we need to be perceived by customers and how can we generate value? With this metric, it becomes possible to evaluate the main capacity to have quality products and services, efficiency, and other attributes that guarantee total customer satisfaction of your company. 3: Internal business processes. To satisfy customers, in which processes do we need to excel, gain efficiency. In this metric, the results of internal matters are analyzed, evaluating them based on financial success and customer satisfaction. For a better definition of organizational and customer objectives, companies must recognize the business processes in which they must reach their maximum capacity! 4: Growth and learning. How to maintain the ability to change and grow while retaining the best talent in the company? With this metric, it is possible to evaluate the main competencies of professionals, the quality of information systems, and the adaptation to the company's objectives. Processes will only be successful if they are executed by highly engaged and motivated employees, who have timely and useful information that adapts to their needs. And once all these metrics are defined according to the reality of your company, it is easy to follow a plan based on your own answers. It is a more autonomous methodology that follows its course with few steps to follow.
Features of OKR
In OKR, the dynamics change a little. As it is a methodology that aims for results every quarter, the steps to be followed require greater segmentation. The acronym comes from the English term Objective and Key Results, in Portuguese. Here the goals are achieved based on objectives that can be defined as the deliverables you want to achieve and the main results defined as a measure in order to measure whether the journey is being made along the way. Together, these two ideas form the basis of the OKR framework. The OKR methodology can be defined as an agile management model. Since its steps must be simple enough for everyone in the business to understand, follow, and practice. And if well applied, OKRs end up becoming a means of communication in the institution, achieving a great integration of teams through objectives. Therefore, every business has its main objectives, which can be macro objectives. In this context, objectives and main results as micro-actions that reflect what the organization at a macro level. Therefore, each work team or team must complete the OKRs for the objectives to be achieved, if this is not accomplished, it is very likely that the OKR will fail, and it will be necessary to repeat the whole process again.
Differences between organization models
One of the most striking differences is the response time for results coming from the two methodologies. One has a result proposal every quarter while the other aims to bear fruit from 1 year to 5. Another difference between BSC and OKR is that in the former, all objectives are defined from four perspectives mentioned. Thus, a set of goals is generated to be achieved within the given timeframe. OKRs are not created based on predetermined perspectives, but rather taking into account what is most important in the company's months, because the keyword in OKR is "Focus".
Is it possible to use BSC and OKR together?
Yes, many companies mix BSC and OKR. The two methods can coexist in a complementary way, one complementing the best of each. The BSC strategy map, for example, can serve as a basis for defining OKRs. If your company already uses BSC, you don't have to give up everything to start adopting OKRs. Just analyze and see what fits your team of employees best!