business acrobatics
in love with diesel locomotives, but Baldwin item is frequently out of stock, customer
was in love with steam. How many times satisfaction suffers. If staffing levels are too
has business owners reveled over what they low, customer service is likely to suffer as well.
‘think’ their customers want because it is Conversely, if items are overstocked financial
something the business owner likes? This is performance might suffer. Also, overstaffing
where research and development prove their can deeply cut into profits. This is where smart
worth. Second, Baldwin failed to create a operations managers become a necessity.
quality product once they placed emphasis in When operations managers understand how to
the diesel market. It is important to understand balance the internal components of a business,
with the Baldwin story that they weren’t customer satisfaction can remain high while
simply slow to enter the diesel market; in fact, unnecessary costs can be reduced.
they were one of the first entrants. Baldwin,
however, didn’t make the full transition until -Putting the Balanced
much too late. They partially committed Scorecard to Use
without understanding their customers and the Putting the Balanced Scorecard to use
needs of the industry. In short, they failed to doesn’t have to be a challenge. In sum, it is a
compete with other locomotive manufactures. combination of understanding the components
in the scorecard, and creating goals and
The Innovation and Learning Perspective asks measures for each perspective. Conducting
if we can continue to improve and create customer research might help you understand
value. The answer is yes! We can continue to the Customer Perspective. Generating daily
improve and create value if (and it is a big if) labor reports might help you better understand
we understand the needs of the marketplace, the Financial Perspective. Understanding
remain competitive, and continually strive to the competition and performing quality
make our products better. R&D might help you grasp the Innovation &
Learning Perspective. Finally, analyzing your
-Internal Business day-to-day operations might help you excel at
Perspective the Internal Perspective. The way in which
The Internal Business Perspective measures you use the Balanced Scorecard is your choice
what the company must excel at from an as a business manager. It is flexible enough
internal viewpoint, such as day to day to allow personal tailoring for your business,
operations, human resource management, but is general enough to help you succeed.
inventory management, training, etc. According For more information on the Balanced
to Kaplan and Norton, “the internal measures Scorecard, visit the Wikipedia article at http://
should stem from the business processes en.wikipedia.org/wiki/Balanced_scorecard, or
that have the greatest impact on customer read the February 1992 issue of the Harvard
satisfaction.” For example, if a high-demand Business Review.
Derrick Dutson is a freelance writer and has 12 years experience in the travel and tourism industry. He is an
MBA student at Regis University and has a BA in Communications with emphases in Advertising and Public
Relations, and a BA in Spanish, both from Southern Utah University. He currently manages the children’s ski and
snowboard school at Brian Head Resort and performs general business consulting services for small business in
Southern Utah. You can contact Derrick by email at derrickdutson99@yahoo.com.
34 scrapbook business
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