Starting with employee growth and satisfaction, you build out KPIs in each area that support your mission statement and ultimately drive the strategies you’ll employ. By setting achievable targets and initiatives for each KPI, you create a roadmap to success. The chart on the previous page provides a simple format for creating a balanced scorecard. One factor to consider when building your scorecard is how many KPIs to include. More is not always better. Some suggest that the "magic number" is seven, plus or minus two (so between five and nine). However, when or- RETAILING continued
areas. Mission statements themselves are sometimes overlooked or not given enough attention. A mission statement should be a clear, concise description of why your business exists. Many resources can help you create one that resonates with your customers and inspires your employees. It shouldn’t be overly long or complicated, and it shouldn’t include el- ements that you’re not truly committed to pursuing. Once your mission statement is well-defined, you can begin de- veloping KPIs that support the specific goals and values behind your business.
ganizing KPIs across the four key categories - Financial, Cus- tomer, Internal Processes, and Employee Growth and Satis- faction - a total of 10 to 20
As you develop your KPIs, it’s important to follow the SMART framework: Specific, Measurable, Achievable, Rel- evant, and Time-bound. For
KPIs is generally considered optimal. Keep in mind: just because you *can* measure something doesn’t mean it’s *relevant*. A KPI is only valuable if it supports your mis- sion statement and aligns with one of these four strategic
some indicators, you may have historical data that helps you establish the right targets. Setting the bar at the right level is critical. By leveraging your existing information and systems, you can set targets that will truly move the needle - and put points on your scoreboard. The final piece of the balanced scorecard is identifying the initiatives you’ll pursue for each KPI. Developing these initiatives should be a collaborative effort with your team. Seeking input and ideas on how to best meet your objec- tives not only gives you insight from the front lines - it also fosters buy-in from your team when it’s time to execute. Before brainstorming, be sure to educate everyone in- volved on how the balanced scorecard is being used to drive results. Dive shops, like all businesses, need strong top-line and bottom-line results. And like all businesses, success requires hard work. But hard work alone isn’t enough. You need a plan and a strategy for moving forward. Hope is not a strat- egy. A balanced scorecard can provide the foundation for a clear, effective plan to build a thriving, successful busi- ness. In part two of this series, we’ll walk through an example of a balanced scorecard for a fictional local dive shop. Stay tuned.
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References: The Balanced Scorecard - Translating Strategy into Action, Robert S. Kaplan, David P. Norton - Harvard Business Review Press - 1996.
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