Applying the Balanced Scorecard to a Small Business
Response to the following problem:
You are an optometrist with your own practice. For the past 20 years, you have focused almost exclusively on profitability of your practice as your sole performance measure. In fact, you have been quite profitable. However, during the past two years, a number of new, low-cost, commercial optometric offices including Lenscrafters, Wal-Mart, Shopko, and even Kmart have opened in your practice area. As a result, your profitability has decreased to the point where you are barely breaking even. Because of your concern for your practice, you have asked a business consultant what you should do.
She has told you that your single-minded focus on profitability is no different than that of your new commercial competitors and has convinced you that these competitors will be more successful than you in making profits because they have lower cost structures than you do. She has suggested that you read her recently published book on the Balanced Scorecard measurement system and respond to the following questions:
Required:
1. Are your current success measures mostly financial, internal processes, learning and growth, or customer focused?
2. Has your focus been on cost, quality, or time measures, or on an appropriate balance of the three?
3. Thinking about your performance perspective (financial, customer, internal processes, and learning and growth), how could you distinguish yourself from the commercial optometrists and create value for your customers?
4. Are there ways you should change your focus regarding cost, quality, and time measures?