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closeScorecards in the 21st Century: How to Integrate Non-Financial Indicators
Reputation & Reputational Risks
Scorecards in the 21st Century: How to Integrate Non-Financial Indicators
Integration of non-financial indicators in scorecards and trying to understand the impact that this step may have on the business model in terms of strategic decision-making is the topic that was discussed today during the workshop titled Integration of Non-Financial Indicators in the Balanced Scorecard.
According to the members of Corporate Excellence, financial indicators point to the results achieved in the past, while non-financial indicators (such as the reputation, the brand, customer satisfaction and commitment to the employees) may be indicative of the amount of wealth that will be generated in future.
This was the starting point of the meeting, which attempted to combine theory and practice by developing non-financial indicators that could complement the financial ones and be included in the balanced scorecards of companies.
Led by Enrique Carreras, Professor of the CEU – San Pablo University, participants reviewed the “reputation” construct and methods that are acceptable from the academic perspective for reputation management. These academically approved methods include RepTrak Pulse, praised for its simplicity and the capacity to involve different stakeholders in the measurement of reputation.
In her turn, Macarena Estevez, the Director of the marketing consulting firm Conento, presented an in-depth overview of the characteristics, peculiarities and indicators of balanced scorecards. Balanced scorecards facilitate the decision-making process and control in companies. Conento’s Director emphasised the complexity of this business tool and noted that success depends on involving all divisions of the organisation in development and application of the balanced scorecard.
The BBVA Case
The practical perspective this time was contributed by BBVA. Maria Such, responsible for BBVA’s reputation and brand positioning, presented a project that was initiated by her company to integrate non-financial indicators (reputation, brand and experience, in this case). For two years the financial institution tried to demonstrate the impact of intangibles on its business model. Such concluded that there is a direct relationship between growth of non-financial indicators and business growth. According to Maria Such, this tool allows the reputation and brand department to identify the main drivers of value growth that affect the strategic decision-making process. Thus, BBVA is setting an example that may be followed by other members of Corporate Excellence that are just starting to work in this direction.
