Training goals and company strategy

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Training goals and company strategy:

Balanced scorecard has become popular in mid 1990s.  Back then it became clear that nonmaterial assets of companies can even be even more valuable than material ones.  Business is not just production facilities, real estate, investments, transport etc.  So many companies tend to forget about company personnel.  Ordinary employees make profits for the company.  Very often top managers do not understand that as they are engaged in strategic games.  When top managers came to understand this fact balanced scorecard gained tremendous popularity because this strategic management tool offered to evaluate also nonfinancial key performance indicators to measure company progress on the way to implementation of strategic goals.

Advantages of Balanced Scorecard

Just imagine such a situation.  An employee has been working for the company for 10 years on the same position, having the same knowledge and skills.  Rival company always organizes training sessions for its personnel.  As a result competitors start to perform better.  Consequently, they manage to optimize their internal business processes, cut expenses, offer products and services at competitive prices, attract new customers and retain existing ones and gain new market shares.

Training is imperative in any business.  Every commercial organization must expand and develop otherwise it will be wiped out by competitors.  Development and improvements should start with personnel skills and knowledge.  But training sessions should not become formality for the company.  This is where balanced scorecard can help.

4 BSC perspectives explained

Through development of key performance indicators in the four balanced scorecard categories it will be possible both to measure training efficiency and align training goals with the company strategy.  Strategy maps will show clear cause and effect ties.  For example, improvement of personnel knowledge will result in ability to use this knowledge in relations with customers which in its turn improves customer satisfaction, while customer satisfaction leads to sales growth which means growth of revenue.  This hypothetical example shows how training can improve company performance.

As said above, training goals should comply with requirements of the company strategy, its mission and core values.  For example, a training session that improves employee computer skills may be absolutely unnecessary for salesmen, while the same training session would be quite beneficial for analysts and all those employees who process information.

Development of correct strategy maps will make it possible to see cause and effect ties and directions for development.  If necessary, goals and measures as well a strategy in general can be slightly amended to meet new requirements of external markets.