The Importance of Controlling Performance during Financial Crisis

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.