BSC Toolkit for Crisis Management

Crisis for any business organization has to be dealt with a passing phase phenomena to make things happen for future betterment. Organizations must be equipped with tactics to tackle any future disruption besides regular scanning of the business models, and avoid heavy reliance on the current market position. Crisis management metrics assists us in advance planning and preparing for any impending catastrophe.

The crisis aftermath is a situation where in the business organization seeks to recover from the damage done and optimize their business strategies to concentrate on accelerating productivity of the superlative performers. Due to the media coverage, the consumers and potential customer’s views and opinions are bound to experience modification, and hence it becomes imperative for the business to maintain close proximity with them and keep them informed under all circumstances.

Keeping some realistic scenarios in mind with regard to volatile market situations will facilitate better understanding and keeping the competition under careful vigil and strategize for market expansion even in times of crisis. Successful organizations often have a monopoly over the market due to their smart moves and careful thinking that contributes directly to their positioning and profitability.

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With the economies tumbling down worldwide the nations are going through financial crunches and there prevails insecurity and crisis in almost all the business entities and the financial institutions. In such a scenario, when even the leading automobile industries are on the verge of bankrupting the importance in incorporating Balanced Scorecards within the organization slopes higher. They not only ease out the effects of recession to a certain extent but also help business entities to plan and structure approaches to make the best of the difficult times. Balanced Scorecards prevent financial disasters from occurring and wrecking entire corporations by allowing developing an aggressive defensive policy with holistic and cohesive methodologies.

One of the main reasons of the troubled organizations in the present is their negligence towards having a broader vision and focus towards the financial and other trends of the market, in order to avail the best returns in short term basis they failed to look at the brighter picture of the future. This is the reason the crisis management scorecards take into account all the perspectives that are or might affect or enhance the adversity of a situation.

The primary objective of the financial perspective in a crisis management Balanced Scorecards deals with sustaining the value of shareholders. These scorecards include metrics related to risk exposure. Evaluating the threat of a risk is important as sometimes potential risks can transform into prospective opportunities for the organization if tackled with acumen. However the measuring of risks is not that simple as each organization has its own set of defined standards, goals, and objectives.

Balanced scorecards allow the firms to take on a clear sense of their exposure by identifying the variables which are macro-economic in nature, which bear the greatest potential of harming a firm. Upon identifying this, they can be father scrutinized for the purpose of analyses and research in order to develop an apt course of action to be implemented.

In the present time of crisis and recession, organizations are more interested in curbing their costs and garnering their revenues and profitability. Balanced scorecard is one of the most cost-effective measurement and evaluation tools that are available for use in virtually any activity – whether it is business-oriented or otherwise because of this Balanced Scorecards take into consideration all the aspects of an activity and deal with the results of each aspect in an effort to come up with an overall performance rating after all individual conclusions have been taken.

With the help of Key Performance Indicators involved in crisis management prompt results can be achieved in timely fashion with the help of their technological support. These KPIs are then combined into the strategic plans and approaches of the firm to be used by the company for the improvement of the management.

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An effective management tool that empowers the managers at the time of crisis for better control is the Balanced Scorecards. All crises are unique and pose new threats to organizations hence it become mandatory to keep a track of the influences. Thus, organizations can use scorecards for detecting and studying the proceedings, methodologies, tasks and assigned activities in an unbiased manner while heading towards the set targets.

Loss of data can be fatal to any business entity. It is one of the most deadly and costliest assets to loose for any organization. Hence KPIs or Key performance indicators help in initiating measures to substantially prevent and curb the data loss costs by identifying and quantifying the key areas.

The data loss KPIs are categorized into four groups namely, data loss issues, human initiatives, technological initiatives and data and system management initiatives. The data loss issues are further identifies through indicators namely; human errors, technological failures, natural disasters and data and system management failures. This perspective indicates the percentage of data loss from different factors in an organization. Human initiatives are the measures taken by the management to efficiently prevent data loss errors of the employees. It constitutes of technological training sessions, motivational programs, percentage employees with authorized access and number of supervisory checks. The technological initiatives refer to procedures related to improving data security and handling. It comprises of backup programs, encryption, virus and spy ware detection and automated alert technology systems. Lastly, the data and system management initiatives include data integration, secondary storage, average time period for up gradation of systems and percentage of systems with verification password.

This is very helpful measuring the outcome of these factors in a particular time and plan and control methods for an organization’s future activities focusing on how these factors affect the entity. Balanced Scorecards help to prepare a full-fledge defensive strategy that combats businesses to wander away from their set objectives and fall into an emergency situation. It also helps to define the intangible factors, indicators or metrics which are based on simulators in a quantified form that is easy to comprehend and compare for the sake of extracting results.

The critical situations within an organization can be the result of numerous reasons. Data within an organization can be lost due to deliberate deletion of programs or files categorized as ‘intentional data loss’ or misplacement namely the ‘unintentional data loss’ or due to some disaster ranging from flood, fire to earthquake etc. or, due to corruption of files or software etc. which is classified as ‘data loss due to failure’ or finally the theft or crime data loss.

The reason to prevent data loss is the usefulness of the data to the organization and the misuse of that data by the competitors in the industry. Also it includes the costs involved in recreating the data and managing without it. Balanced Scorecards provide the appropriate solutions that can be utilized by organizations for minimizing data losses.

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A crisis situation can occur in any organization and at any point of time, given the dynamic situations under which businesses operate today. Such inevitable occurrences make for a compelling enough reason to come up with a logical solution for tackling these unfortunate events.

By selecting a group of suitable crisis metrics to evaluate the situations, it is possible to leave competitors behind and create own niche. This collection of indicators will help in setting the stage for heading on a ‘continuous improvement’ route. This will pay in long run for sure as ‘spotting of problems’ gets easier manifold; thereby making it equally easy to implement solutions.

These parameters will then be put together on a balanced scorecard for further consultations.

Owing to the benefits brought by this strategy, it has been put to use by uncountable organizations for improving their operations. Also, transparency in the place gets a push with the entering of this instrument in the scenario.

Summing it all, counting of steps is both needed and is possible with this BSC approach, thus giving sufficient causes to adopt it.

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Balanced Scorecard is a tool for autonomy of the management. It helps them prepare an explicit defense strategy for the forecasted time of crisis. This helps in controlling the influential factors in time and lessens the damage they cause both in magnitude and capacity. Due to this organizations need to depend on technology to avail well-designed tools like Balanced Scorecards detecting and identifying the events, plan of action and method of implementation for various tasks and activities objectively while channelizing all efforts in-line with the corporation targets.

A crisis management scorecard offers the KPI – Key Performance Indicators which perform the task of benchmarking and gauging. They incorporate factors as wide as; revenues, profits, discounts, fee charged from the viewpoint of customers, finances, internal operations and growth. Not only this, it comes with a built-in option of creating customized indicators with the help of which corporate entities can quantify their outcome in a particular time. They can also map-out the control actions for upcoming circumstances. Each of these KPIs is assigned with ranges and scored against the actual performances and actions.

The result of the outcome is then categorized accordingly and stored in the central database from where it can be viewed for the purpose of analyses and study using the strategy maps which allow the management to identify the relation between each of the indicators and see how they affect the organization collectively and individually. An indicator appears next to the issues that need concern and attention automatically if the stop light tool is selected to be used. It is a warning indicator built on the signal pattern and incorporates three shades of light namely, red, yellow and green.

The use of time points is also very useful in assigning relative scores to indicators which are time dependent, the scores for the indicators can be set to remain valid for certain period of time. After which they can be changed by the management for other purposes. Using a diamond type chart, current and target values of a metric or an indicator can be highlighted for various purposes. Usually a diamond chart is represented as a triangle, the bold line of which defines the current value, the inside triangle – minimal value and the outside triangle – the maximal value respectively. In order to access the diamond chart a category is selected with more than three indicators and click the option of diamond chart mode.

Emergency situations within a workplace range from human breakdown to rumors, procedural complications and misdeeds. The key to success is defining and identifying the adverse factors from all levels of business aspect that can pose adverse threats for organizations. Managing to build detailed methodologies will help organizations to combat their crisis both in the present and future.

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Balanced Scorecard is an effective management tool that empowers the managers at the time of crisis to render better control over the influencing factors and circumstances. Since each crisis poses different threats to distinct organization therefore there is a need to keep a track of the influences which can be done so with the help of scorecards. Thus, organizations can use scorecards for detecting and studying the proceedings, methodologies, tasks and assigned activities in an unbiased manner while heading towards the set targets.

One of the most affecting tools that balance scorecard offers is the KPI – Key Performance Indicators which perform the task of benchmarking and gauging. Corporate entities can easily measure their outcome in a particular time and plan and control methods for their future activities. This is a defensive strategy that allows business entities to wander away from their set objectives and fall into an emergency situation.

The KPI under balanced scorecard can be categorized broadly in four groups. They are namely; financial, customer, education and growth and internal processes.

The financial indicators represent the performance of the entity in monetary value and worth. It entails factors like; revenue, profit, cost and expenses etc. which can also be used as limits. From customers’ point of view it encompasses clientele, issues resolved, awards and credibility.

Skill pool is another very important factor that should be properly watched over by the management determining if the employees possess the appropriate abilities to handle a situation. If not, they can be given training within the time in hand both in term of technicality and psychology and provided with proper counseling.

Crises or critical situations within a workplace can be numerous resulting in heavy loss and expenses to the firm along with affecting the lives of many associated with the entity. Emergency situations range from human breakdown, rumors, violence to technical complications and organizational misdeeds. How strongly have they affected the attitudes within an organization depends on how intense and wide-spread the situation is.

Balanced scorecards provide sufficient knowledge and technical answers to shape the otherwise distorted state of the allocation of resources for needy organizations. It offers multi-dimensional aspects to be studied by the organization to understand their relation with the firm itself. It is an effective support system that lessens the time of responsiveness of the firms providing valuable, accurate and objective information to the various levels of management across the hierarchy of the organization.

The result extracted through this software is based on numerical values. Since the entire data is quantified drawing conclusion and differentiating the stronger operational levels from weaker becomes relevantly easy. Results can also be communicated with appealing stop lights as visual effects during presentations and meeting. Another tool of strategy map can also be used to represent data for comparison.

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Crisis within the workplace of an organization can prove as fatal as a terrifying natural disaster depending on their extent and intensity. The financial costs to cover potent crises are relatively high. Mostly, the incurred losses are simply not monetary based but affect the lives of scores of employees working in the organization. It can also trigger attitude shifts that are not considered healthy for any entity.

What firms have to seek is the answer to how can the chances of a crisis be reduced. If, in any can it cannot be curbed how can it be forecasted so as to be prepared when it actually strikes so that organizations can control their workplace environment to the best. The intriguing questions of how an entity can positively contribute to its disasters also need to be resolved.

Proactive crisis management includes forecasting potential emergencies and planning methodologies to deal with them. With time and resources as Balanced Scorecard available firms can equip themselves well. It helps organizations to detect the nature of the crisis and minimize damage to maximize the control and recovery activities. Effective crisis management is the security communicated to the various stake holders assuring them of recovery.

The task of effective crisis management can be successfully accomplished once the organizations have channelized both their resources and technologies to tackle the problem. Using the apt supporting systems organizations can integrate their already running information system to get better ouput. The tools designed in balanced score cards are very simple and logic-based using quantity to analyze the data that is recorded into the systems with the help of indicators or metrics. These metrics are pre-defined through ranges or limits between 0-10, with 10 being the closest to the organizational goals or expected level of performance. Upon completion of actual tasks they are scored against these ranges to find out their competitiveness. This identifies the areas that are strong from those which need to be focused on within the organization.

Balanced Scorecard also offers building strategic maps. These strategic maps are the visualizations of the extracted results from the indicators and allow users to understand the inter-relation and effects on each other. They can be used by the measurement to fully understand the categories of different indicators used and gauge their influence with the organizational tasks at various levels.

It also offers stop lights as one of the appealing features of the software. It is a three colored spectrum that allows lights of red, yellow and green color to signify and focus on areas that need attention. They are the indicators of warning and can be very handy during the presentation of data. However, they can be edited and turned off according to the situations.

Technologies like balanced scorecards allow corporations to utilize beneficially from the time available and helps them build their resources, operations and targets along with the personal productivities of the employees.

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There are several handy ways to grow your revenues during this shaky economic time but the crucial one on which a majority of businesses miss out is in the field advertising. Most of the businesses tend to trim down their advertising budgets at the very onset of economic recession. This could lead to inviting more troubles, as by doing so vendors are indeed narrowing their chances to reach their potential customers.

Instead of cutting off advertising, it’s better for businesses to prioritize their expenses and curtail budgets allocated to other redundant and non-profitable activities. You simply contact to your advertising vendors and notify them about the cuts you are making in advertising budgets. This would help your vendors to see what they can do with the revised budget offered to them. While most of the businesses simply cut off on advertising during recession, advertising vendors would presumably offer you a cost effective deal in advertising. Besides, it comes as an opportunity to reach to your customers without facing any competition or paying premium mount for that.One should ideally device key performance indicators for advertising tailored for a recessionary market and should also take devise a risk management scorecard. Last but not the least, recessions can actually prove to be a great time to bolster up market share and give a firm hold to your company .

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Minimizing the impact of crises is all about being able to forecast their occurrence as soon as possible. In other words, by employing a strategy to make sure that the happening can be known beforehand, one can implement methodologies to suppress its after-effects. One of the solutions that has often come up as an answer is a crisis scorecard.

This group of meaningful metrics not only acts as ‘set of benchmarks’ against which performance can be evaluated but also it serves as a means to ‘promote transparency’ in the systems. Thus, with these bi-directional benefits, it is possible to keep an eye on all aspects involved in the issues.

On the whole, the advantages showered by this instrument are enough to compel in taking troubles for its implementation. By moving on these lines, one can easily get to the root cause of problems in no time and introduce measures for its correction.

Thus, a scorecard is worth the difficulties undertaken in its formulation. With such an answer to the ’monitoring problems’, one can definitely be a little relaxed, at least when it comes to ’counting steps and movements’

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Controlling performance during financial crisis is still significant if you want to keep your company operating and functional. Employing the downturn BSC can help you do this.

Recession is no longer looming over our shoulders for it is right here, right now. And from the looks of the recession periods that have happened in the past, today’s recession is far from its ending at this point in time. Economists and analysts have been hopeful in presenting their optimistic theories on how they are sure that today’s recession would end much like the past ones did. However, we cannot really be too sure, in spite of the trends and flows that have been studied and observed. After all, the economy is bound to change so who is to say that change would not happen in the prevailing trends about economic recession and financial crisis? Still, the best that we all can do in the corporate setting is to find ways and means of controlling performance during financial crisis. After all, we still need to prioritize earning as much profit as we can during this economic downturn, no matter how small this may be.

Sadly, there are not too many companies all over the world that can confidently say for themselves that they are still earning decent profit in spite of this financial crisis. As you are most likely aware of this already, there are even lots of companies that have closed down already, succumbing to the downpull of recession. But if you would take time to do some research on what these surviving companies have in common, it would be the fact that they implemented one important tool in their system and they have used this tool very wisely. This tool is none other than the downturn BSC or the downturn balanced scorecard.

The primary objective that the downturn BSC aims to achieve is all in its financial perspective. The development and the sustenance of the enterprise’s shareholders’ values should be upheld rigorously at all costs. You already have several choices of methods that can drive shareholder value, and there are even two or more of them that can foster revenue growth as well as productivity improvement. A third official method should also be incorporated in the downturn BSC, in the form of risk management. This way, risk management metrics could also be used to deal with entailed risks – which have surely gone up in number now with recession being full blown and all.

There is no reason to worry about implementing risk metrics because there are already a lot of them that have been incorporated before – this includes ‘value at risk’. But the fact that companies do not really prioritize risk management that much puts these companies at complete fault. Better than that, you should go beyond implementing risk management and go for the whole shebang – in the sense that companies should determine for themselves what they can and should do to deal with whatever risk is determined. The nature of the risk should be studied as well as what should be done to deal with it accordingly. Remedies should also be determined.

By incorporating risk management in the downturn BSC, you can better your chances at controlling performance during financial crisis. The key here is to look for all sorts of options and windows that you have at your expense then capitalize on them to control the performance of your company in spite of the financial crisis everyone else is experiencing.

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