The Small Business- Big Thinking- Blog by Brij_Consulting: Business Transition with Scorecard Techniques

Business Transition with Scorecard Techniques

No matter what type of business or industry, Scorecard Techniques achieve interesting results in transitioning the average pricing base and unit delivery system. Based on our previous blog entries, we have worked through the business transitioning from the D1 price to the D2 Price Scheme and determined how to scale the operations to achieve a higher unit volume and upgrade the product to a higher pricing level. There are two things that this method accomplishes best:

Mapping the transitional scale to visualize and achieve the desired result
Utilization of funds created from earnback on planned reserves to achieve rapid payback on borrowing

Below is both the interior graphics and the exterior graphic view of the transition to scale of planned conversions. It is difficult to see from the exterior view what transitions are occurring in the interior cube, where the business proportions and sizing are taking place.

These graphics help to demonstrate the change from the various areas that contribute to conversion.

As demonstrated below, the Cost Benefit Analysis is very helpful as an ongoing tool. Reconciled to the financial portfolio the metrics and the changes that are monitored help to organize the transition into a visual understanding of the cost and financial conversion associated with the areas of the business.

This enables several types of graphics and make a powerful demonstration of how Scorecard Planning assists to grow a small business into a stronger and better operation. We had found in earlier blogs that the company needed to raise the profile of the business in order to make the transition. In order to remain competitive the planning was to transition over a two year period. We wrote about that transition and show the interim reporting that preceded the final result as shown below. The final figure is based on earnback from the reserves and closing the books on the project. We retained enough funds in the reserve pool to pay benefits in the form of a management fee that is not shown in our transition project (usually assumed by the corporate or home office.)

The importance of maintaining a solid portfolio of metrics is to make use of interim funding methods that utilize short term borrowing allowing pass thru transitional stages to occur rapidly. The financial metrics are key to making good use of funds as shown below:

Lastly we show the financial portfolio versus the scorecard and how the two are reconciled for each phase of the project or business initiative. These processes used for years in business capture and monitor the metrics as a project and allow managers to monitor and achieve a different operational scale by assigning roles and KPI’s throughout the Scorecard process.

While it is true that planning is one thing and achieving the plan is another, the method provides the tools to find the mechanisms to achieve the view of operational transition on a daily, weekly, monthly and annual basis. These types of analytics aren’t just showing a dashboard of results, but are finding the internal conversion and deploying the strategy to keep turning the business operations to a successful stage of transition.