Project priority models select which actions (projects) best support organizational
strategy. The balanced scorecard model compliments the project priority
selection process. It is more “macro” in perspective than project priority
selection models.’ This model measures the results of major activities taken
to support the overall vision, mission, and goals of the organization. The
scorecard model limits measures of performance to goals in four main areas:
customer, internal, innovation and learning, and financial measures. For
example, a performance measure for a customer might be industry ranking
for sales, quality, or on-time projects. Internal measures that influence
employees’ actions could be time to market or reduction of design time to
final product. Innovation and learning measures frequently deal with process
and product innovation and improvement. For example, the percent of sales
or profit from new products is often used as a performance goal and measure.
Project improvement savings from partnering agreements are another example
of an innovation and learning measure. Finally, financial measures such
as ROl, cash flow, and projects on budget reflect improvement and actions
that contribute value to the bottom line.
These four perspectives and performance measures keep vision and strategy
at the forefront of employees’ actions. The basic assumption underlying
the balanced score card model is that people will take the necessary actions
to improve the performance of the organization on the given measures and
goals. The balanced scorecard model and project priority selection models
should never be in conflict with each other. If a conflict exists, both
models should be reviewed and conflicts eliminated. When both models are
used in project-driven organizations, focus on vision, strategy, and implementation
are reinforced. Both models encourage employees to determine the actions
needed to improve performance.
