Balanced Scorecard
Customizing a Balanced Scorecard Model for Non-profits
The balanced scorecard is a useful tool for designing strategies that are able to encompass different perspectives in an organization that are related to different types of important objectives. Robert Kaplan and David Norton were the primary advocates that made the Balanced Scorecard approach popular as they found shortcomings with the traditional management systems ability to see the entire organization from a comprehensive perspective.
This approach was designed to be a tool that can help management translate vision and strategy into objectives and measures across four balanced perspectives: the financial perspective, customer perspective, internal process perspective, and the learning and growth perspective. Each perspective is important by itself, however when the four approaches are "balanced" then a type of synergy can emerge that can propel an organization to success. Because of the popularity of this approach in the private sector, the model has also been adapted to be used in the private sector. This analysis will utilize the balanced scorecard method and apply it to the ReHabilitation Center whose vision is to be ?a leader in providing and assessing desired services to people with disabilities.
Balanced Scorecard Discussion
Although the non-profit organization does not have customers in the traditional sense, it does serve some population in a similar way. For example, a nurse in a non-profit clinic will most likely provide care along the same lines as for-profit health institution. There may be subtle differences in the way these organizations operate, but at their core they are service providers that try to maximize the services that they give to their patients. The ReHabilitation Center has narrowed down on two categories of metrics that they feel are most relevant to the population that they serve.
The first is based largely on customer satisfaction which is also a consumer perspective that is also important in the private sector. However, for the ReHabilitation...
The ReHabilitation Center focuses on filling the gaps in the services that individuals with disabilities cannot find elsewhere in the community. This strategy can really add significant value to a disabled individual. The second category of customer satisfaction metrics focuses on the quality of life of the population that the center serves. There are a multitude of different strategies that the organization can pursue towards this end and these opportunities will undoubtedly need to be prioritized based on the value that they will bring to the local disable population.
To support the other objectives that the organization is trying to achieve as well as to support the mission and vision of the organization, the organization has no choice but to raise funds. The more financial resources it can acquire the better the position it will put itself in to meet virtually any other object that the organization is trying to achieve. Generating revenues represents the primary difference between for-profit and not-for-profit organizations. In a for-profit the organization typically raises their revenue straight from their target market or the people they serve.
However, in a non-profit organization the revenues are generated by altruistic contributions from third-parties or in some cases with the assistance of public funding. Thus a non-profit really only has two options to improve their financial position. They can either acquire more revenues from donations or whatever other means or available, or they can learn to use the assets they already have in a more efficient manner. The ReHabilitation Center is currently trying to balance the breakeven point in which they use virtually all the resources they have to support their mission and they have included many strategies in the balanced scorecard to help better manage their finances.
Another perspective included in the balanced scorecard approach is the operational function of the organization. The organizations operations are what take an abstract mission…
