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Chapter 4 • Business Reporting, Visual Analytics, and Business Performance Management 205

Strategy Map: Balanced Scorecard: Strategic Initiatives:
Linked Objectives Measures and Targets Action Plans

Financial Increase Net Net income Increase
Income growth 25%

Increase
Change licensing
Maintenance
Customer Customer retention rate Increase and maintenance contracts
15%
Retention
Improve Call Issue
Standardized
Process Center turnaround Improve call center processes
30%
Performance time
Learning Reduce Voluntary Reduce Salary and
and Employee turnover 25% bonus upgrade
Growth Turnover rate

figuRe 4.12 Strategy Map and Balanced Scorecard. Source: Business Intelligence, 2e.

the two. On the one hand, executives, managers, and staff use scorecards to monitor
strategic alignment and success with strategic objectives and targets. As noted, the best-
known example is the BSC. On the other hand, dashboards are used at the operational and
tactical levels. Managers, supervisors, and operators use operational dashboards to monitor
detailed operational performance on a weekly, daily, or even hourly basis. For example,
operational dashboards might be used to monitor production quality. In the same vein,
managers and staff use tactical dashboards to monitor tactical initiatives. For example,
tactical dashboards might be used to monitor a marketing campaign or sales performance.
sectiOn 4.9 revieW QuestiOns

1. What is a balanced scorecard (BSC)? Where did it come from?
2. What are the four perspectives that BSC suggests us to use to view organizational
performance?
3. Why do we need to define separate objectives, measures, targets, and initiatives for
each of these four BSC perspectives?
4. What is the meaning of and motivation for balance in BSC?
5. What are the differences and commonalities between dashboards and scorecards?

4.10 six sigMA As A peRfoRMAnCe MeAsuReMent systeM

Since its inception in the mid-1980s, Six Sigma has enjoyed widespread adoption by
companies throughout the world. For the most part, it has not been used as a performance
measurement and management methodology. Instead, most companies use it as a process
improvement methodology that enables them to scrutinize their processes, pinpoint
problems, and apply remedies. In recent years, some companies, such as Motorola, have
recognized the value of using Six Sigma for strategic purposes. In these instances, Six
Sigma provides the means to measure and monitor key processes related to a company’s
profitability and to accelerate improvement in overall business performance. Because of
its focus on business processes, Six Sigma also provides a straightforward way to address
performance problems after they are identified or detected.

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