Safe water enterprises need to have strategies on how their business shall evolve. To manage the implementation of a strategy tools are needed. The balanced scorecard is one of the most popular and widely used tools that helps manage a strategy implementation: Innovative ideas can be translated into a strategy which in combination with continuous evaluation of the strategy implementation will help leading to expected outcomes.
This factsheet provides an overview of how to develop, translate and implement a strategy for a safe water business in practice with the help of the Balanced Scorecard.
Management and strategy implementation are topics that go hand in hand. Concretely means strategy implementation translating a chosen strategy into organisational action in order to achieve the set strategic goals and objectives. It reflects the manner in which an organisation should develop, adapt and utilise organisational structure, control systems, and managerial culture to follow strategies that lead to competitive advantage and a better performance of the safe water business. Organisational structure allocates special value developing tasks and roles to the employees and states how these tasks and roles shall be interrelated to accordingly maximise efficiency, quality, and customer satisfaction (OLSON, 2018; FAVARO, 2015).
Having a validated product, a market analysis executed and a strategy ready to enter the target market is not yet a guarantee for success. While implementing your strategy there are hurdles to overcome in order to achieve the performance your company is aiming for. Hence it is very crucial to measure the impact and potential failures during the implementation process. By reacting flexibly on bottlenecks, the expected success can be achieved if successfully steered. That’s where the factsheet at hand steps in.
Business management and strategy implementation is essential for safe water enterprises that are starting out and reflecting on the implementation of their strategy. Considering the subsequent advices of this factsheet will allow to plan and facilitate the execution of a safe water business strategy.
There are concrete tools to help defining and implementing a strategy. Among them is the popular Balanced Scorecard concept of KAPLAN AND NORTON, introduced in 1992, shown in the figure below.
The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The applied balanced scorecard aims at transforming an organisation’s strategic plan into practical "marching orders". It provides a framework that not only includes performance measurements, but helps a management to implement the strategy on a daily basis. This factsheet enables decision makers to consistently execute a company’s strategy, not only in the short-term, but especially also incorporating a sustainable long-term perspective (KAPLAN & NORTON, 2007).
The balanced scorecard measures four perspectives of your companies “health”:
Financial perspective: Traditional financial reporting of a company, examples are:
- Are you doing well on the financial side? (see financial planning)
Customer perspective: Focus on customer and their level of satisfaction, examples contain:
- Do your customers like your product and services?
- What could be improved?
- Are there specific groups with homogenous considerations?
- How can potential customers be convinced? What are triggering factors? Is it trusted people, advertisement or practical presentations etc.? (see factsheet on sales process)
Internal, business process perspective: Focus on the core business operations and the value chain, examples are:
- Are you able to efficiently deliver what your customers are asking for? (Find more information about monitoring and evaluation).
- Is your quality control sufficient? (See factsheet on quality control)
- Are your marketing activities coherently adapted to the local needs?
Learning and growth perspective: Aspects of learning and improving success, examples are:
- Do you steadily improve the value creation for your customers?
- Are you learning from mistakes made?
To make the balanced scorecard useful in practice goals and metrics have to be defined to measure these specific goals for each of the 4 perspectives. Important is that the information flow works. Downward information is needed in order to clarify and discuss the strategic goals throughout the hierarchy of the company. On the other hand is the upstream information essential asserting how and to what extend the set goals have been achieved to take measures for eventual successful strategy implementation. For more practical information see important web links and further readings below.
Applying the balanced scorecard will help your safe water enterprise to implement a thorough strategy to reach more and more customers with safe water.
The Inclusive Distribution Challenge – How do we scale distribution and sales networks that create opportunities in low-income markets?
This article discusses sustainability in the context of strategic management of small and medium size enterprises (SMEs). Sustainability is not only good for the planet, but also financially rewarding. But frameworks describing how organizations can successfully manage the change towards sustainability are needed. Building upon the existing models, this paper proposes a pathway for empirical research leading to the alignment and adjustment of these models to the needs of SMEs.
SLOAN, K. ; KLINGENBERG, B. ; RIDER, C (2013): Towards Sustainability: Examining the Drivers and Change Process within SMEs. In: Journal of Management and Sustainability: Volume 3 , 19-30. URL [Accessed: 18.04.2018] PDF
Tom Wright describes in his article what the 6 important steps are to implement a successfully defined strategy and what aspects are key in managing a small- or medium-size business.WRIGHT, T. (2016): The Definitive 6-Step Guide to Strategy Implementation. URL [Accessed: 18.04.2018]