How to measure, monitor and manage through a scorecard.

• Author: Triplett, Ted
• Position: CUSTOMER RELATIONSHIPS/RETENTION

THE SLOW ECONOMIC RECOVERY AND NEW GOVERNMENT REGULATIONS are forcing banks to squeeze the last penny out of every dollar. Banks large and small have been looking for ways to conserve cash, do more with less, combine efforts and invest in only what matters--to improve performance and increase efficiency.

To sustain growth, banks need to manage operating costs and translate strategic objectives into actions that lead to measurable results.

You can't manage what you don't measure.

According to a Fortune magazine article, less than 10 percent of strategies effectively formulated are successfully executed.

Where's the breakdown? Inevitably, there is a disconnect between the development and formulation of strategy, and implementation. Many banks overlook a critical part of strategic planning: the task of translating their strategy into measurements that can be tracked over time.

Without these kind of measurements, banks have no idea how well their strategy is being executed. That makes it very difficult--or maybe impossible--to reward achievement or take corrective action when performance fails to meet expectations.

A scorecard is a management system that translates a bank's strategic objectives into a specific set of performance metrics and goals that can be customized to each branch, department and team. In short, a scorecard provides timely and relevant information to measure, monitor and manage progress.

Even though financial institutions plan carefully and develop strategic objectives, they often fail to communicate them effectively to their employees. According to Balanced Scorecard Collaborative, 95 percent of the typical workforce doesn't understand its organization's strategy.

By communicating your strategy and linking it to goals, scorecards create a shared understanding and commitment among all bank employees. When everyone understands your bank's goals, as well as the strategy for achieving those goals, all bank efforts and initiatives become aligned.

Scorecards can be used as a motivational tool to help employees reach their goals and improve their performance. For example, when...