“There are three key areas of focus when developing objectives and measures for the Learning and Growth perspective and they are: human capital, information capital, and organizational capital.”

• Human capital: Pope John Paul II wrote in 1991: “Whereas at one time the decisive factor of production was the land, and later capital…today the decisive factor is increasingly man himself, that is, his knowledge.”  [1] John Paul’s words ring true regardless of whether we’re discussing governments, nonprofit agencies, or businesses large and small; in today’s economy intangible assets, chiefly knowledge, are the drivers of success. Ensuring your team has the skills and knowledge they need to excel is the domain of human capital. Given the competitive environment in which you operate it is vital that all employees possess skills that are matched to your unique strategy and allow you to outperform your competitors.

• Information capital: It’s difficult to imagine an industry that hasn’t been dramatically impacted by technology over the last number of years. So called “disruptive” technologies have revolutionized the way we make, market, purchase, and use everything from household products to entertainment devices. In our modern economy information capital serves as the raw material driving the transformation of data into information and propelling the growth of individual companies and entire industries alike.

The information capital component of Learning and Growth measures your ability to provide the tools (most often technology) your team needs to execute the strategy you’ve put in place. As mentioned above, the business environment today demands that companies turn information into knowledge that can be leveraged for success and that’s exactly what we attempt to do when monitoring information capital.

• Organizational capital: At what may have been the darkest hour for Great Britain during World War II, just prior to the Dunkirk deliverance, Prime Minister Winston Churchill stood before his parliament and issued these words: “To sum up, our conclusion is that prima facie Germany has most of the cards; but the real test is whether the morale of our fighting personnel and civil population will counterbalance the numerical and material advantage which Germany enjoys. We believe it will.” [11] With those words he ignited the passion and belief of an entire nation facing practically unbeatable odds, lifting the spirit and resolve of every person, in every corner of the nation. Such is the power of the human spirit. Regardless of the forum or field of endeavor, at the end of the day true success resides in the power manifested by hearts and minds. Organizational capital represents the “hearts and minds” of your people and tracks your ability to evolve and grow as an organization, ensuring success today and sustaining that prosperity for the long-term.

From EPMReview.com

“These four clusters you ensure your Internal Processes are both efficient and effective, resulting in satisfied and loyal customers and creating value for your shareholders.”

1. Operations Management: The most basic of the four clusters, Operations Management processes relate to the basic, day to day routine activities necessary to first produce and ultimately deliver a product or service to the market. For example, underwriting is a core process employed at most banks.
2. Customer Management: As the name implies, this cluster focuses on processes relating to the management of a company’s customers, and includes the acquisition of your target customer group, proactively communicating the company’s value proposition in hopes of turning window shoppers into actual paying customers, and carefully determining user needs, targeting solutions accordingly.
3. Innovation: No company in today’s business environment can afford to stand still, content with the status quo, should they hope to thrive in a world fueled by innovation and new technology. Accordingly, this cluster focuses on the development of new products and services designed to meet the emerging needs of your customer base.
4. Regulatory and social: This final cluster has a dual focus, the first being represented by processes necessary to remain within regulatory guidelines established by third parties, such as Sarbanes-Oxley reporting to ensure the integrity of reported financial numbers. This cluster also provides a company with the opportunity of being a good corporate citizen; advocating on behalf of customers, supporting worthy causes, and providing a voice in the community.

From EPMReview.com

I am continuing my lesson to learn the balanced scorecard.  Next up is the customer perspective.

• “Who are our customers?”
• “What do those customers expect or demand from us?”
• “What is our value proposition in serving our customers?”
  • value proposition – how you propose to provide value to your customers.

From EPMreview.com

I have completed my first paper of my senior seminar.  These are the basic keypoints of the financial perspective:

- Mission and vision is crucial for planning the financial perspective.

- Create value for shareholders

- Drive revenue growth

- Maximize productivity

EPMreview.com