Balanced scorecard... what's that? Published Jan. 20, 2009 By 2nd Lt. Erik D. Luttkus 71st Flying Training Wing AFSO21 office VANCE AIR FORCE BASE, Okla. -- Throughout history, management has commonly used financial and productivity reports to run operations and align itself with strategic goals. These financial and productivity reports tend to lie well within the strategic level of management. As such, they do not provide management with a good understanding of how small-scale operations affect larger strategic goals. How can management obtain a good picture of tactical level operations? The answer can be found using a tool called the balanced scorecard. Here at Vance AFB, the balanced scorecard creates an environment in which wing staff can help its people complete their mission. It helps alleviate problems and distributes resources more effectively to or from misaligned areas. By using a system that can pinpoint areas needing help, wing staff can help Team Vance create a better Air Force. A common misconception of a balanced scorecard system is that of negative intent. The balanced scorecard is not intended to be used to blame misaligned operations. Instead, it is intended to highlight areas of misalignment in order to provide the necessary help to bring that tactical operation back into the green. By definition a balanced scorecard is a tool used to examine how different relationships formed from operational interaction effect the strategic goals of an organization. It is a measurement system in which management can drill down from the large picture to the small in order to understand why certain relationships exist. Once management has a picture as to why certain relationships exist, they can then effectively align small-scale operations with larger strategic goals. Management can now make intelligent decisions based on standardized metrics and enable small-scale operations to be more effective through eliminating wasteful practices and unnecessary work. One might ask how this affects an individual on the small-scale side of an operation. It affects a person in two ways. First, the balanced scorecard enables individuals to locate problem areas in which they might have never recognized misalignment with strategic goals. Finding these problems and locating central issues will help individuals eliminate these problems. Second, now that problem areas are known, resources can be directed to alleviate the problems and realign the operation. Remember, resources can not be directed towards an unknown problem. For example, pretend that on the balanced scorecard, aircraft maintenance is indicating difficulty or is said to have a red status. Management could either blindly try to solve the problem or even possibly not do anything since they don't know where the problem lies. The term aircraft maintenance does not provide enough information in order to effectively solve the issue. However after checking the balanced scorecard further, all indications under aircraft maintenance show green except for a single red under required manning hours. At this point, management can intelligently make a decision and provide funding to hire more maintainers and therefore realigning aircraft maintenance to green. Without a balanced scorecard, management would only know strategically that they are in the red. However, using a balanced scorecard, management would know that both strategically they are in the red and tactically why the strategic goal is red. Management can now push more resources in the direction of the misaligned operation in order to make it green.