User Experience Balanced Scorecard

By Sean Van Tyne

Published: June 21, 2010

“Customers have experiences with an organization’s products and services regardless of whether the organization is consciously managing them.”

Customers have experiences with an organization’s products and services regardless of whether the organization is consciously managing them. A good user experience delights customers—increasing adoption, retention, loyalty, and, most important, revenue. And a poor user experience discourages customers from using a product or service and drives them to the competition—eventually, making a product offering unviable.

Smart organizations recognize that providing a good user experience for a product is an essential competitive advantage. They know it is the product’s user experience that forms their customers’ impression of the product—by both attracting and delighting customers and differentiating their product from its competitors. Just look at the user experiences consumer companies like Apple provide. Even government organizations know this is important. Check out Usability.Gov.

Because user experience has become so important to organizations’ success in the marketplace and, thus, their revenue, it is now part of their overall business strategy. Organizations should plan how to manage and measure user experience. Therefore, most organizations have some system for managing their strategy and measuring their progress toward achieving their goals. One popular system for managing and measuring strategy is Balanced Scorecard.

Balanced Scorecard

“Using a scorecard helps organizations balance their strategic objectives across four perspectives….”

Balanced Scorecard is a system that aligns specific business activities to an organization’s vision and strategy. [1] Using a scorecard helps organizations balance their strategic objectives across four perspectives:

  • Financial—The Financial Perspective examines the contribution of an organization’s strategy to the bottom line. It represents the strategic objectives of an organization in terms of increasing revenue and reducing cost.
  • Customer—The Customer Perspective focuses on customers’ satisfaction, which contributes to the organization’s revenue. It represents the value an organization delivers to customers, the value proposition, and the resulting customer satisfaction.
  • Internal Business Processes—The Internal Process Perspective is concerned with requirements for products and services that deliver the customer value proposition. It focuses on activities and key processes that are necessary for an organization to excel at providing the value customers expect.
  • Learning and Growth—The Learning and Growth Perspective focuses on the internal skills and capabilities an organization requires to support value-creating internal processes. This perspective includes employee training, the development of corporate cultural attitudes relating to both individual and corporate self-improvement, and the technological tools that support these activities.

By understanding the basics of Balanced Scorecard, you can marry your user experience activities to your organization’s overall strategy. One popular user experience design process that can help you do that is activity-centered design.

Activity-Centered Design

“It is essential to put your design solutions into the context of the market problems they solve, the business objectives they support, and the customer and user needs they meet.”

Solutions work best when we develop them with a deep understanding of the activities we must perform to meet all of these needs. This approach is called activity-centered design (ACD). [2] ACD puts the activities in which organizations engage at the center of the experience design process. It is essential to put your design solutions into the context of the market problems they solve, the business objectives they support, and the customer and user needs they meet.

In ACD, an activity is a coordinated, integrated set of tasks. Activities comprise tasks, which themselves comprise actions, and actions are made up of operations, as shown in Figure 1.

Figure 1—Activity-centered design bridges people and technology

Activity-centered design

The User Experience Balanced Scorecard

“With the Balanced Scorecard system, an organization can align and manage its key corporate objectives.”

With the Balanced Scorecard system, an organization can align and manage its key corporate objectives. The User Experience Balanced Scorecard maps the user experience process and skills to customer satisfaction and financial growth. At a high level, a User Experience Balanced Scorecard might look something like that shown in Figure 2.

Figure 2—A high-level User Experience Balanced Scorecard

PERSPECTIVE USER EXPERIENCE STRATEGY

FINANCIAL

Increase revenue. | Reduce costs.

CUSTOMER

Increase conversions, retention, and wallet share. | Reduce cycle time, training, and support.

PROCESS

Create an attractive, friendly, and easy customer experience through research, iterative design, validation, and usability testing.

EMPLOYEE

User Researcher | Information Architect | Visual Designer | Interaction Designer | Usability Engineer

Notice that the customer objectives of increasing conversions, retention, and wallet share map to increasing revenue and reduced cycle time; reducing training and support costs maps to the financial objectives of reducing costs. Depending on an organization’s overall strategy, you could break down the User Experience Balanced Scorecard like that shown in Figure 3.

Figure 3—Objectives in a User Experience Balanced Scorecard

PERSPECTIVE USER EXPERIENCE STRATEGY

FINANCIAL

Enable revenue growth.

Improve customer wallet share.

Increase productivity.

CUSTOMER

Establish product leadership and innovate through research and analysis of target-market segmentation to determine current needs and anticipate future needs.

Improve customer intimacy through iterative design reviews with target customers.

Improve quality of user experience.

PROCESS

Research and analysis

Interactive prototyping

Usability evaluation

EMPLOYEE

Research Analyst

Information Architect, Visual Designer, and Interaction Designer

Usability Engineer

Objectives, Measures, Targets, and Initiatives

“Each perspective of the Balanced Scorecard includes objectives, measures of those objectives, target values for those measures, and initiatives.”

Each perspective of the Balanced Scorecard includes objectives, measures of those objectives, target values for those measures, and initiatives, as follows:

  • objectives—the major objectives a company must achieve—for example, profitable growth
  • measures—the observable parameters a company uses to measure its progress toward reaching its objectives. For example, a company might measure its progress toward the objective of profitable growth by growth in net margin.
  • targets—the specific target values for the measures—for example, +2% growth in net margin
  • initiatives—action programs a company initiates to meet its objectives

For a User Experience Balanced Scorecard, the objectives, measures, targets, and initiatives might look like those shown in Figure 4.

Figure 4—Objectives, measures, targets, and initiatives in a User Experience Balanced Scorecard

PERSPECTIVE OBJECTIVE MEASURE TARGET INITIATIVE

FINANCIAL

Profitable growth

Net margin

+2%

Action plan for profitable growth

CUSTOMER

Customer satisfaction

Customer satisfaction score

+5%

Customer satisfaction survey

PROCESS

Designing easy-to-use solutions

Usability

70% pass rate

Usability studies

EMPLOYEE

Analyzing usability

Usability studies

For each major release

Usability plan

For each perspective there might be many objectives. Objectives for user experience could include user research, design reviews, and usability evaluation among other user experience activities.

Conclusion

“As user experience becomes more established as part of an organization’s overall strategy, a comprehensive Balanced Scorecard must include user experience.”

As user experience becomes more established as part of an organization’s overall strategy, a comprehensive Balanced Scorecard must include user experience. It would be beneficial for UX leaders within organizations to understand the Balanced Scorecard system and how to map their UX groups’ objectives to their organizations’ business strategies.

Notes

1. Balanced Scorecard was developed in the early 1990s by Dr. Robert Kaplan of Harvard Business School and Dr. David Norton.

2. Norman, Donald. “Human-Centered Design Considered Harmful.” Interactions, July + August, 2005.

References

Van Tyne, Sean. “Corporate UX Maturity: A Model for Organizations.” UX Magazine, Volume 9, Issue 1, 1st Quarter 2010.

—— “Defining and Designing Technology for People.” Pragmatic Marketing, May 2010.

1 Comment

I believe that, besides the measurement (KPI, target) part and action part (initiative, action plan), it is important to see how these measures appear in the Balanced Scorecard.

They are not introduced just because similar measures are used in other companies. They are the result of translating a company’s vision to lower levels as this article describes.

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