As a former General Manager at the Peterborough Community Futures Development Corporation and a volunteer Director with the Kawartha Lakes Community Futures Development Corporation, I’ve seen firsthand the impact of Community Futures organizations. With 267 such organizations across Canada, they play a crucial role in supporting businesses, nonprofits, and municipal governments through loans, grants, mentoring, training, strategic planning, community consultations, and networking.
In this blog post, I want to share how Executive Directors and General Managers working in Community Futures Development Corporations (CFDCs) or similar organizations can effectively use Balanced Scorecards (BSCs) to meet their objectives. A BSC can be a valuable tool for community economic development, helping organizations align their efforts, measure progress, and ensure that initiatives are focused on achieving desired outcomes through a multi-faceted approach to performance measurement.
What is a Balanced Scorecard?
Strategic Management Tool:
The BSC is a strategic management and performance measurement system that helps organizations translate their vision and strategy into actionable steps.
Beyond Financial Metrics:
Unlike traditional performance measurement, which often relies solely on financial metrics, the BSC considers four key perspectives: financial, customer, internal processes, and learning and growth.
Focus on Results:
The BSC helps organizations focus on key performance indicators (KPIs) and track progress towards achieving strategic goals.
Alignment and Communication:
The BSC promotes alignment within an organization by ensuring that everyone understands how their work contributes to the overall strategy.
How to Apply a BSC in Community Economic Development
- Define Community Goals:
Start by clearly defining the community’s economic development goals and objectives. These could include job creation, business growth, income levels, poverty reduction, and community resilience. - Identify Key Perspectives:
- Financial: Track the financial performance of businesses and community initiatives.
- Customer (Stakeholders): Measure the satisfaction and needs of residents, businesses, and other stakeholders.
- Internal Processes: Assess the efficiency and effectiveness of programs and initiatives.
- Learning and Growth: Monitor the development of skills, knowledge, and innovation within the community.
- Develop Key Performance Indicators (KPIs):
For each perspective, identify specific, measurable, achievable, relevant, and time-bound (SMART) KPIs. Examples of KPIs might include:- Number of jobs created (I created two fields in our database: “# of jobs when they first applied” for $ and “# of current jobs” – this showed the growth from when they began working with the CFDC)
- Number of businesses established
- Average revenue growth
- Number of attendees participating in programs
- Customer satisfaction with services
- Track and Monitor Progress:
Regularly collect and analyze data on the KPIs. Use the BSC to track progress towards achieving the community’s economic development goals. - Adapt and Improve:
The BSC is not a static tool; it should be regularly reviewed and updated to reflect changing circumstances and priorities. Use the data collected through the BSC to identify areas for improvement and make necessary adjustments to the strategy and initiatives.
Benefits of Using a BSC in Community Economic Development
- Improved Alignment: Ensures that all stakeholders are working towards the same goals.
- Enhanced Accountability: Provides a framework for measuring and tracking progress.
- Data-Driven Decision Making: Allows for evidence-based decision-making.
- Increased Transparency: Promotes transparency and accountability to the community.
- Improved Resource Allocation: Helps organizations allocate resources effectively.
- Strategic Focus: Helps organizations stay focused on their long-term goals.