Balanced scorecard implementation and learning growth effects at Futura Industries

Futura Industries

The balanced scorecard approach is a framework for building a better organization. It relies on the organization placing emphasis on four different perspectives, with the theory being that if the organization excels at these four perspectives it will achieve success. The dimensions are customer, financial, internal business processes and learning & growth. At Futura, Susan Johnson chose to focus most of the company's effort on the learning and growth perspective.

Johnson explained that the reason she favored this perspective above the others is that by emphasizing learning and growth, the company's employees would gain the skills and knowledge that they need to achieve better results in the other perspectives. Thus, by becoming a learning organization, Futura would see improved performance everywhere. If Futura had chosen any other perspective on which to focus, excellence in that perspective would not necessary translate into excellence anywhere else. Only the learning and growth perspective allowed the company to have a multiplier effect on its benefits.

If Futura had emphasized financial results, it may not be able to sustain this because the company might not be a good one in which to work. If Futura focused on processes, this might improve the finances but may not help the customers and might make it difficult to attract good staff. A focus on the customers is often a good approach, but ultimately Futura's approach does a good job of striking a balance between the different perspectives by emphasizing the one that can impact all the others.

With this focus, Futura measures human-centric objectives. It measures the education level of the workforce and it measure the knowledge base and experience level of the workforce. Other human measures are also used by Futura, so that the company ranks highly in human outcomes and is a desirable place to work as a result of these policies. This approach allows them to measure the learning and growth within the organization -- and then the learning and growth is expected to translate to measures in the other three perspectives as well.

The measures capture the full dimensions of the learning and growth perspective, because they not only measure progress in that perspective but in the other ones as well. For example, the company cites as evidence of its success a 50% increase in revenue without adding personnel. Literally, earning more with the same number of employees is an improvement in productivity. Productivity improvements come about in a couple of ways. Either employees work harder -- and 50% is a lot harder -- or they work smarter. With greater learning and knowledge base in the organization, smarter work is possible. The company's people are able to innovate, to generate new ideas and to find better ways of performing the same old tasks. As a result, the company is able to show its productivity improvements as evidence of its excellence in the learning and growth perspective.

That the company has become a preferred employer is also a telling sign of success at this perspective. The value of this is that the company has a better employer brand and therefore builds a better pool of potential candidates -- being a great place to work improves the recruitment process. This allows the company to select better candidates. With better people involved, the company not only has a better chance to excel, but this situation creates a positive feedback loop where the presence of good employees only serves to make the company even more attractive.

I think that Futura's approach is logically sound. The company understands that learning and growth is the one part of the balanced scorecard that is inextricably linked to the others. While excelling at any of the others is valuable on its own, there is little spinoff effect. Johnson is right, however -- learning and growth foster success at the other three perspectives.