Business Process Quality & Balanced Scorecard

In order to create a successful enterprise, business needs to be pay attention to, and work to develop all key business units
Business Process Quality & Balanced Scorecard
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Senior HR and management consultant
5 min read
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There are a number of big corporations, especially in the private sector, that pay attention almost entirely to financial results, while on the other hand many small and medium enterprises (SMEs) do not pay much care to their overall financial strategies and structures. The primary goal for all sorts of business enterprises should be to strike some kind of balance between paying attention to financial results and outcomes, along with other sides of the business such as operations including sales, marketing, supply chain, human resource, production.

Every industry segment and its associated business enterprises has a series of fundamental business processes that define the business model a company imbibes and implements. That is the core reason why a  company’s business model forms the basis of the company’s long term competitive advantage. The goal of the company’s business process’ quality manuals is to assist the employees at levels with key aspects of business operations that include finance, sales & marketing, supply chain, regulatory compliance, improving performance (through well-defined procedures and processes) and implementing best management practices into all operational areas including HR.

Quality in a product/service is the result of having easily reproducible and replicable processes and global standards such as ISO 9000/QMS distinguish quality as regularity.  However, quality in a business process is not always an objective measure. Simply put, if a company can simply repeat the same product or service related result, constantly over time, then they have what is called ‘business quality’.  

The strategic victory for a business is constant, resulting from  well-defined processes and procedures that can be quantified, assessed, and attuned over time, which is the key essence of process management.  With meticulous processes, procedures, policies and forms, a business has a base to build a quality program; conversely, one of the goals of producing a policy and procedure manual is to document the core business processes that have the optimal business model.  This optimal model will be easy to understand, repeat, and replicate by other employees, in other offices over time, which will produce consistent results, profits, and morale. Consistency reduces risk and uncertainty producing a more stable company.

Before you start forming and assembling material in preparation for writing the business process quality manual, you should assess the following points:

  • Select the employees who will have the power and accountability for preparing the main sections of the quality manual and who will have the decisive authority over the entire business process manual.

  • Define the preferred content of the manual, containing what should and should not go into the manual.

  • Sketch the main sources of information for the manual.

  • Decide the appropriate communication style for your policy and procedure statements to make sure that all company employees write them for clearness and comprehensive understanding.

  • Regulate the final format and organization of the manual.

The Balanced Scorecard

The business process quality manual describes, in procedural form, the best management practice activities required to manage the basics of organisational processes to attain regulatory compliance and improve overall organisational performance; however, it does not explain how to keep a balanced approach.

Each division of the business must function efficiently in its own right for a business to be prosperous in the real sense.  It’s a known fact that very few businesses survive despite poor performance of some division(s), and that performance is being made up by another division.  Thus, when one business unit is not productive, other division/business units must be even more productive to recompense for it.

While this situation definitely exists in many businesses, it is far from epitome.  When all divisions are not operational properly, it leaves the business exposed to economic crisis, competitors and socio-political issues.  So, the question to be asked here is when sales fall or production drops, can your business survive if it does not have a solid strategy and process-based operational structure and practices?

Kaplan and Norton in their famous work, The Balanced Scorecard, have highlighted four business areas that require emphasis in a balanced way.  Here, it must be clarified that the basic notion of ‘balance’ should not be taken too literally in every possible sense – there has to be an absolute seamless balance in all areas of business.  Although few sections of the business might require priority, but the fact is that in order to create a successful enterprise, business needs to be pay attention to, and work to develop in, at all key business units.

The four fragments presented for a balanced scorecard include:

  • Customer

  • Learning & Growth

  • Internal Processes

  • Financial

This should be viewed as a nominal list; your business might categorise other areas that require attention in a balanced way based on the industry and legal compliance requirements.  Success in financial areas alone cannot convert into complete success if the business does not have great products or services that are delivered in a timely and cost effective manner that satisfies customers.  While financial operations are significant, they should never be the elusive focus of management, no matter how large or small the business is.

The finance is itemised as one of the key mainstays needed for business success in the Balanced Scorecard and it shows its prominence in the overarching view of what in required for businesses to be successful.  Remarkably, still, research shows a large number of SMEs do not proactively manage operational processes and neither have they developed a good financial and managerial strategy. Therefore, if you are one of such business owners, developing a business process quality manual and keeping a balanced scorecard will help you take positive steps towards growth and success.  But, always remember, the success of the business is dependent on all areas of business if they are truly aligned with corporate mission, vision and values and the leadership knows how to drive the corporate strategy – ‘balanced’.

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