Using the balance scorecard plays a major role in managing your business.  You're a business owner, so you know that making money is important. But it's not the only thing that matters.

You need to have a balanced perspective when looking at your business. That means looking at the numbers and dollar signs, but also customer and employee satisfaction, innovation , and more.

When everything is in balance, it's easy to stay on track and make good decisions for your business.

Check out my podcast episodes to learn more about how I can help you take a balanced view of your business!

Conclusion

Using the balance scorecard is so important to have a balanced perspective when looking at your business. You can’t just look at the numbers and dollar signs- you also need to factor in other elements like customer satisfaction, employee morale, innovation potential, and more.

Without this balance, it’s easy to get off track and make poor decisions that could hurt your business in the long run.

I want to help you maintain a well-rounded view of your business so you. And if you have any thoughts or comments on today’s episode (or previous ones), please head over to Apple podcasts and leave us a review! We love hearing from our listeners, and we’ll be sure to stay in touch through our social media channels as well. Thanks for joining us today – until next time!

I love getting feedback from listeners – hearing from you helps me make my content even better. Thanks for tuning in!

Subscribe now so you don’t miss an episode.  For more business and finance, news, advice and tips, don’t forget to subscribe and watch our weekly videos on I Hate Numbers.

Furthermore, my mission is to inform, inspire and educate you to get closer to your numbers.  You can make more profits, save tax and time, improve your well-being and your money mindset.  My book, I Hate Numbers will change your relationship with numbers, in a good way.  Click to find our more.

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Like it or not, all of us in our lives make judgments about other people. We fall opinions and we react according to those judgments. Those judgments are made when we're at school until the moment that we pass away. That it's no different in your business. We need to make judgments about how we're doing. We need to make observations. We need to react to how things are progressing. I'm going to be covering this in I Hate Numbers today. We're going to look about taking your business performance seriously and what you need to do to actually move your business style forward.

You're listening to the I Hate Numbers podcast with Mahmood Reza. The I Hate Numbers Podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Hi, folks. Welcome to I Hate Numbers. My name is Mahmood. I am a proud accountant. Yes, it does exist. I'm a mentor and educator and also proud author of the book I Hate Numbers, the book that will transform an alter your relationship with numbers for the better. So taking your business performance seriously in terms of running a business, we can run our business in a number of different ways here. We're not just talking about the large corporates, the large multinationals, whether you're an acorn size business, however you set your stall out, however you define where you want your business to go, is really important. And I can't emphasise that enough, that you've actually got to take performance,

not only the measuring of performance, how well you're doing and how you've managed to react to that performance really, really seriously if you were to transform from a hobby into a business that you're aspiring to, that's going to be sustainable, that help you deliver your why, gives you the impact that you want in your business. So what does that involve? Now, let's take the idea of performance. Some people may hear that word, that term performance, and they think it means something that only elite athletes will do. It may be something that large corporates will do, but it's not. In the intro, I was referring to the idea that all of us, however much we think we don't, we all make judgments about other people, judgments are made about us.

Those judgments and those reactions to that, to literally be the fleeting moment. So the moment we're at school where our parents might make judgments, how we were cute babies, our ability to mature and grow, how well we're speaking, how well we're interacting with other children, and depending on what that is, they will make decisions accordingly. If you're going to be a naughty child, if that's going to manifest itself, then you know one images that you're going to have that situation where parents going to step in and modify your behaviour.

When you're at school, your teachers will make judgments about how you're performing, how you're developing and subject to that performance, they will make decisions and behave and interact with you accordingly. That doesn't leave us. We make judgments on how people look. Subtly in our brains, we go through that very quick assimilation, that reference purpose based on the out surface as much as we try not to, the aesthetics, how somebody comes across us and that reaction we have, we form an opinion whether we think we actually like that person, we think we're going to not necessarily get on that person, we might meet somebody very fleetingly.

And based on the interaction that patterns first time around, we will form a judgement. Now if we translate that into the world of business, performance for me is about making judgments about how well you're doing. Many businesses that I come across, when you ask them, how is your business performing? Well, first of all, that's a very open and that's a very sort of bland question, isn't it? And a classic response will be, it depends what you're referring to, depending on the contextual nature of which you're looking at that in. So let me talk about a framework, first of all, about performance, why it's so important, what performance actually means and what you can do to actually up your gain in measuring your own business performance, why you should be doing this. Well,

this is not just an academic exercise just to go through the motions. All business owners have got lots of demands on their time. All business owners have got lots of things to deal with. So this is not about overloading you with unnecessary things, but it's putting information out there, tools and techniques that's going to help you progress towards where you want your business to actually go. Now, critically, the first thing for me, for any business, is for you to define, for you to decide, for you to have an idea and to articulate what is your end goal looks like, where do you want your business to go, what's the future for your business?

What's your I'm calling it your Northern Star. Now, typically, if we draw a parallel here, let's imagine that scenario where we may be somebody who aspires to a particular lifestyle. We may decide that for a number of reasons that we want to improve our wellbeing, we want to improve our health. And our Northern Star may be to have not only just improve our physical wellbeing, but also improve the battle that goes on between our ears. And what we might decide to do there is that actually one key objective may be to improve our blood pressure.

Our blood pressure may be up, normally high. So our goal, our objective, that Northern Star is to get our blood pulse to a certain level. And here it's not just to say aspirationally we just want to improve it by in general terms, that's not really measurable. So whatever your goal, whatever your objective is, whatever that Northern Star, you've got to be capable of recognising it. What does it look like? So could you actually recognise that? Again, by observation, by number or whatever. So effectively, in terms of BP blood pressure, we can actually quantify that and put a number to that.

Now, for me, it's always about fixing your end goal - your Northern Star. That's the one that we've put in our personal life. If we look to their business life, it may be a financial goal is to perhaps reach a certain level of profitability. It may be for some businesses, 50,000 and that represents quite a significant milestone them. For others, that might be quite small change, it might be quite small amounts of money. But whatever it is, fix it for yourself. Make sure it's capable of being measured, make sure it's capable of being quantified, make sure it's capable of being articulated, because if you can't describe it, if you can't articulate it, if you can't recognise it, you'll never know if you've actually achieved it.

Now, having fixed your Northern Star, having fixed your goal, your objective, which you can make smart, you've then got to figure out that route map. How do you go from where you are now to get to that point in the future that you've actually said that you'd like to get to. Reflect your personal and your business wish list in there. And the next thing you do, you got to figure out some form of road map. Now, if we go back to the analogy that I was just drawing about lifestyle, about blood pressure, well, one route map might be that you've got to think in terms of the diet that you might have to introduce. You may want to reduce your sort intake,

you may want to increase your physical activity. And in that route map here, it's about how you are doing it and you've got to set yourself milestones along that way. If you are, for example, somebody who's got a desk based profession, a desk based service, if you've got somebody who's quite active, then the physical requirements that you put in yourself may alter. So what is that route map? What is that journey plan going to look like? And again, it's a real tough thing to take on board sometimes because what it requires us to do is to have time away from being involved in running our business, to actually have time to create that headspace where we could actually think about the map,

the way that we could have progressed from where we are now to that endpoint. And one thing we need to avoid really critically is not to get overwhelmed by the process. So look at things in stages, look at things in breaking that down in phases. Now, if we drew that and cross into our business about getting that 50,000 pound target or £500,000, whatever that figure actually is, we're going to figure out how do we do that? Do we sell more products that we have already? Do we introduce new products? Do we have efficiency savings that we can make?

And what we need to do in that route map, in that plan is to break it down into what I call milestones. So in making judgments, we've got to have an endpoint, we've got to have the plan, the route map as to how we get there. Because ultimately our performance, how we judge ourselves, how we're progressing, is going to be against those reference points. And if we don't have reference points, we can't really decide, we can't really conclude how we're actually progressing.

And performance for me is about judging progression, judging how you're doing against your benchmarks and then actually reacting accordingly to what that is telling you. So we have our end goal, we have our route map, and I would certainly recommend that we break that root map down into manageable stages. Lots of people get overwhelmed by thinking, there's my end point there, this is where I am at the moment, and that's a massive, massive gap that I've got to achieve. You think about all those climbers who go up to Everest, reaching the summit is their end goal.

They start at bese camp. Well, the journey for them is going to be broken down into smaller, incremental steps. It might be the first kilometre climb, the next two kilometres, and there it goes on. Each of those benchmarks, each of those milestones here for them is what they're measuring themselves against. And it's likewise the same in your business. You need to break down your route map, your progression into what I call measurable achievable milestones. Typically, what that might look like is you break that down into what that looks on, perhaps what you've got, the big picture, the big plan, what that twelve month roadmap looks like, break it down into measurable monthly cycles.

So by the time it gets to the end of month one, what's realistic for me to have achieved by that point. Now, notice here, by the way, folks, we're talking about what we anticipate here because performance should always be judged against expectations. What we think is going to be achieved based on the resources, our mindset, our capacity. You can't judge performance against nothing in the air. You've got to have a reference point. And that reference point for me is what did you set out to do? How are you actually progressing against that milestone?

And then measure that, analyse it, react and move on accordingly. Critically, the next thing that we need to throw into them, having got an end goal, having got a route map, having got a route map that's broken down into stages, into what's achieved on each month that goes by. Now, in business, we have lots of different measures. You can have financial measures in terms of levels of profitability that you're making overall. You should be able to gauge levels of profitability you're making by each of your product groups, the services you provide. And when you actually monitor that, you need a way to actually capture what's happening in reality.

And in all performance systems. You've got two frameworks. You've got where you want to get to, where you anticipate getting to, and then you measure reality against that. And let me tell you one thing, folks, where you think you'll end up, what you're setting your path out to be based on your skill sets, resources you have at your disposal, you will not actually achieve. The reality is, when you are not going to achieve your targets you've set yourself. And when I say you won't achieve them, there will be fluctuations on that journey path.

Life will intervene, things will be in your way - obstacles, challenges, circumstances outside of your control. There may be distractions. You may get shiny bauble syndrome. Lots of things are going on in your business here, but effectively, you've got a lane that you're following, you've got targets that you set yourself, you're measuring that progress against that path you set yourself. And then you literally need to make sure, typically at the end of each month, you're reviewing what you're actually doing against where you set yourself, and then make a judgement call accordingly.

If you're going off course, then you've got time to actually understand why and put yourself back on course. If you actually manage to achieve those milestones, fantastic. There may be an issue later on to discuss with those milestones are too soft. But for now, let's assume those milestones are realistic in the context you set yourself. Fantastic. Give yourself a tick box. In more practical terms, if we think about that dietary thing, if we think about that route map, climbing Everest, whatever you're looking at here as you progress against those set targets, if you are achieving your targets that you set yourself, then, as I said, that's fantastic. If you haven't, which is more often the case,

if you've either exceeded or you've actually gone below par, you've got to understand why is it that you're not actually quite getting there. Now, this sounds great as a theory, doesn't it, folks? But there's some practical stuff. Many businesses, I find, where they try and judge how they're performing, there are two main things that sometimes go a bit wobbly, sometimes go wrong. Number one, there are far too many measures, so there's numbers coming out of your ears. You've got lots of statistics and some of them are not very meaningful at all. They don't really give you insight, they don't really help you in what you're doing.

So critically at the very outset, you need to measure what's important to you and what's important to your clients and what's important to your customers. I use this idea of what's called critical success factors. And the whole idea is that for you to get your Northern Star, what is it that you've got to be really good at? What have you got the excel at? What have you got to get right in order to meet that target? What is it your customers value from you? Do they value quality? Do they value speed of delivery? Do they value response? Do they value particular outcomes?

Whatever is important to them is what you've got to be measuring. Whatever they value is what you've got to be delivering. When you come to things internally in order for you to deliver successfully to that end client, what are you going to do internally? So is it an on boarding process that's really important that you've got to get right? You need to measure the policy of that on boarding process. If you take a company like DHL, DHL was a courier company for example, what will be valued by their clients, what will be valued by their customers is what I call completeness of delivery.

And what that means in reality is does your parcel, does your package get to the client on time, unbroken, complete and as the customer's delivered and perhaps add a value for money proposition. But what that means is for someone like DHL they're going to be measuring the time it takes from the order to the delivery to them customer. They're going to be measuring things like returns, breakages. Customer complaints are useful by the way, but for me personally speaking, customer complaints don't really give you much insight because a we are still in this culture that not too many people complain directly to the company.

They complain alternatively by going to vocalise their associate displeasure, review sites or whatever. So we can still monitor those here. But that sort of feedback, that sort of metric, a measure is really going to be quite important. So measure fewer things that measure what's important and you need to encompass a wide range of these. In the future I Hate Numbers broadcast and podcasts and videos, I'm going to be introducing different ways, different systems that you can have to actually measure that. But don't just measure financial outcome, measure things like the customers, the customer interactions or what customers find important. Measure things that go on with you and your team,

how you deliver the processes that you have. Measure things like innovation, measure things like learning. But you've got to look at the whole shooting match, a wide range of things you've got to get right in order to deliver that end goal and ultimately is to make money. And when I say to make money by the way, we're talking about profitability, money in the bank and this applies across the board. Whether you're a social enterprise, whether you are a private business, whether you are a not for profit or a private commercial company, if you do not generate sufficient value, if you do not generate sufficient profitability, your business is going to face problems sustaining itself and being there in future years to deliver that end why.

So profitability for me is the key for any type of business. Large, small, social enterprise, private, arts charity, you name it. If you don't generate surpluses, if you don't generate profits, you're going to find it very difficult to sustain yourself in the future. So let's summarise where we are so far. End goal. Make sure you've got some idea what your personal business end goal looks like. Make sure you've got a route map, because you're going to be measuring your progress against the route map that you set yourself. Measurements, they could be observations, they can be raw numbers, they can be surveys, they can be feedback, whatever they are. But make sure you focus on the things that are important to you, your customers, your team, to reach and get that end objective being achieved.

Next, what you need is you need to make sure you've got good, competent, in house systems. You need to actually gather the data. And many organisations, many businesses, there are systems for collecting data and I speak from personal experience as well as experience that I share with clients, is data system, gathering information is quite poor. Nowadays, if you look in terms of financial systems, things like digital systems, digital accounting systems, digital management systems, there's no excuse not to invest in that.

If you're serious about taking your business to a certain level, then the cost of investment in those tools is relatively low cost. You need to gather data from your social media feed, from your website, and a good digital management system can drag things in from a number of ecosystems there as well. Just be careful not to get overwhelmed, obviously, but if we've got an idea what we think is important, we can measure that and we can compare to our expectations. And if you don't compare to something, then you're really just going to be trying to make it up as you go along. It's all going to be opinion, there's no hard data.

A very popular example, if I stray outside of my own area of expertise in the world of numbers, in the world of finance and the world of accounting, etc, in the world of business, let's look at things like marketing. Now, if we look at something like marketing, something we can all relate to, many businesses, entrepreneurs, many freelancers, many organisations will involve themselves in some degree of social media. And one idea is to look at the number of likes perhaps you get on a post, the number of engagements you get on a post. That's really great, but ultimately, those engagements, those people that you hang out with, those people you'll communicate with, have got to be within your target demographic, your target customer group.

Getting lots of likes on a post is really great for the adrenaline, gets those cortisones going, get those endorphins going, and we feel really good about it. But ultimately, if you get lots of likes and lots of gauges on a post, but none of them are your target audience. That's a really, really poor outcome, I would say. And probably a waste of one's time as well. What we're looking for is not just the light, not just the engagement, but what's the follow through? Is there any relationship we can identify? What's called a clickthrough rate? Is there actually a follow up to a call of action that we've got like downloading something,

visiting the website and that's the metric that we need to do. The customer engagements against clickthrough engagement is something that's more important than just how many people have actually liked our particular posts. So focus on measuring things that are critical, things that actually help you progress towards your Northern Star. That's ultimately what we need to do. The last thing I would suggest is that we need to make sure that we do this on a regular basis, get into a discipline. Now, if this is something relatively new to you, something that you do just cursor in here, my personal view would be it's about making small changes in behaviour. It's about making small little steps to establish patterns, to establish behaviour patterns and then you can always build on them.

So if this is something you don't often do, my view point would be if you’d sit down, you figured out your north and start and then you can't do this overnight, by the way folks. Clients that we work with is effectively it's a process of generating that wish list, generating a business story, deal with the figures that come with that. But what you've got there is once a week, once a month, if you take two headlines like profitability and cash flow, take a look at what your bank statements are showing.

Look at the money that's coming to the bank. Look at your statements, look at them digitally, look at them hard copy, whatever ticks the boxes for you and think, okay, I'm now just getting connected to reviewing my bank statements. If you've got a customer account, you've got credit accounts. Review how quickly your customers are actually paying. Do you know how often they pay you? Do you know which customers are outstanding? And again, it's not massive major things here, but it gets you into the habit of reading reports.

If you're looking at things like onboarding, if you're looking at things like marketing, look at the stats. There are loads of stats collated. Some are quite general, some of them quite crap in terms of social media feeds, have a look at the metrics that sit behind what you're doing. Very few of us will not look at things like Google Analytics, Google my business. We're not looking at things like the stats that get generated by Facebook and LinkedIn and Twitter and the like.

Now they are getting less, by the way, so we have less insight for most ads, but it's still better to nevertheless. And if you're not looking at your metrics, if you're not looking at those numbers here. Just go into the pattern of doing that. You may not necessarily understand what they all say, but at least you can get to the habit of say, once a week, grab a coffee, spend half an hour, review what those reports are saying. Once you get into the habit of doing that, you're getting comfortable with reading those figures, getting comfortable with having a look at those reports, then you could always up your game.

Then you could say, I don't actually quite know what this means, let me find out. But you need to establish patterns of behaviour and you need to do that. It is not a ‘Oh, it would be nice’ if you don't figure out what's going on in your business. If you can't say how you're progressing against your route map, all that's going to happen is, folks, you're going to have more time, more anxiety, more distress as to whether you're actually progressing in the right way. Underpinning all of this is a Northern Star. But you need a plan. And I don't mean a straitjacket. You need a route map.

You need to put your milestones, you need to put your key measures there. You need to look at them, you need to review, monitor and react. Folks, I hope you found this useful. If you have, I'd love to hear your feedback and comments. If you disagree, if you think it's all rubbish, then I'd love to hear why you thought so. If you've got thoughts for something that you'd like explained or expanded on, then by all means please let me know.

I'm going to give a little plug for my book, I Hate Numbers. I think, personally speaking, it's a great book. I've got some good feedback, good comments on there. So if you want to change your relationship with numbers, if you want to change them for the good, by the way, not for bad, then I would recommend check it out on the website I Hate Numbers forward slash I Hate Numbers book. If you want to try something chapter, I try it before you buy if you wish. If you think, you know what, I'm going to go straight for it. Have a look at Amazon, I Hate Numbers. If you want to buy a printed copy, that's quite possible as well if you're an anti Amazon person. So folks, until next week, have a look at what's going on in your business. Get used to making sure you judge your performance and progress from that. And until next week, folks, have a good week.

We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.