Putting the Balanced Scorecard to Work with Apple

 What Is The Balanced Scorecard?

The balanced scorecard is a strategy performance management tool and a structured report that companies used to keep track of the execution of activities. It is a scorecard for business performance and a strategic planning and management system used to align the daily operation ensure all members and partners are doing with strategy, state what goals they are trying to accomplish, and measure the progress. The scorecard presents managers with four different perspectives from which to choose measures. It includes four dimensions, Financial, Customers and Stakeholders, Internal Process and Leadership, and Growth. It also complements traditional financial indicators with measures of performance for innovation and improvement activities. Notice that the balanced scorecard is not a template that can be applied to all businesses. Different markets, product strategies, and environments may require different scorecards. 

Moreover, unlike conventional metrics, the information from the four perspectives provides a balance between external measures(operating and income) and internal measures(new product development). Most of the traditional concepts are only focus on finances and customers. Executives may introduce new operating processes intended to achieve breakthrough performance, then continue to use the same short-term financial indicators they have used for decades, measures like return-on-investment, sales growth, and operating income. However, they fail not only to introduce new measures to monitor new goals and processes but also to question whether or not their old measures are relevant to the new initiatives. 

However, it is not as simple as customers spend their money for your products and you build your financial accounts to keep provide more products. Assume that companies or organizations are like trees, finance is water, customers are the soil or the planet, internal processes and leadership are the tree's trunk, leaves, and roots, growth is the sun. Each part contributes to the overall growth of a company. Customers provide their money(water, finance) to the roots, companies consume the water and solar to grow and build deeper roots. 

Why We Should Consider To Use It? What Are The Benefits?

i. It is a comprehensive view of a business, not just a financial view.

ii. It helps companies to focus on their long-term goals rather than short-term ones.

iii. Keep goals, objectives, and strategies on track rather than anticlimactic.

Putting the Balanced Scorecard to Work with Apple

Apple Inc. is a multinational technology company that specializes in consumer electronics, software, and online services. As such a tech giant, Apple developed a balanced scorecard to focus senior management on a strategy that would expand discussions to cover the margin, return on equity, and even market share. According to a Harvard Business Review article, Apple uses five performance indicators, customer satisfaction, core competencies, employee commitment, market share, and shareholder value to measure its performance and productivity.

i. The Customers & Foster The Core Competency

Historically, Apple has often been named as a technology, innovation, and product-focused company by designing better gadgets. However, Apple has introduced measures that trying to shift the emphasis toward customers. One of the metrics is ACSI’s time-tested, scientific model provides key insights across the entire customer experience. The American Customer Satisfaction Index (ACSI) is the only national cross-industry measure of customer satisfaction in the United States. The Index measures the satisfaction of U.S. household consumers with the quality of products and services offered by both foreign and domestic firms with significant shares in U.S. markets. Equipping employees with innovative solutions is essential to developing their competencies. However, measuring the impact these solutions have is a complex task. 

ii. Employee Commitment

Apple conducts a comprehensive employee survey in each of its organizations every two years. The surveys of randomly selected employees are performed more frequently. The survey questions are concerned with how well employees understand the company’s strategy as well as whether or not they are asked to deliver results that are consistent with that strategy. 

iii. Market share

By now, Apple not only increases its profits but also influences the software developers they collaborate with. To attract and retain software developers to Apple platforms is crucial for Apple. According to Statista.com, Apple claimed 15% of the smartphone market by sales to end-users in the first quarter of 2021, remaining relatively stable compared with the previous quarter.

iv. Shareholder Value

Apple has been continually increasing shareholder value. It has done this by declaring dividends to investors and through a series of share buybacks, both in the open market and as accelerated share repurchases. 

Summary

These five indicators help in managing long-term performance and aids each of its units to progressively advance its activities and performance. The balanced scorecard helps Apple to keep tracking their performance to set objectives and goals. In addition, Apple has found that its balanced scorecard has helped develop a language of measurable outputs for how to launch and leverage programs.

Reference

About the american customer satisfaction index. American Customer Satisfaction Index. (n.d.). Retrieved October 15, 2021, from https://www.theacsi.org/about-acsi. 

Published by S. O'Dea, & 10, S. (2021, September 10). Apple smartphone market share by sales 2021. Statista. Retrieved October 15, 2021, from https://www.statista.com/statistics/1168529/global-apple-market-share-2020/. 

Robert S. Kaplan and David P. Norton. (2015, July 16). Putting the balanced scorecard to work. Harvard Business Review. Retrieved October 15, 2021, from https://hbr.org/1993/09/putting-the-balanced-scorecard-to-work.