Editor's Note: Take a look at our featured best practice, Balanced Scorecard (34-slide PowerPoint presentation). What is the Balanced Scorecard (BSC)?
The Balanced Scorecard is a strategy performance management tool--a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their [read more]
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Balanced Scorecards tell you the knowledge, skills and systems that your employees will need (learning and growth) to innovate and build the right strategic capabilities and efficiencies (internal processes) that deliver specific value to the market (customer) which will eventually lead to higher shareholder value (financial). –– Robert Kaplan & David Norton
In 1990, Art Schneiderman participated in a research study by Robert S. Kaplan and David P. Norton, and during this study described his work on Balanced Scorecards. Subsequently, Kaplan and Norton included anonymous details of this use of Balanced Scorecard in their 1992 article “The Balanced Scorecard – Measures that Drive Performance,” Harvard Business Review, February 1992.
While traditional goal setting often focuses on financial, and thus lagging, measures, the Balanced Scorecard approach broadens the scope of indicators to include leading performance indicators from the following four key areas or perspectives.
Financial
How do you want to look to your shareholders?
Indicators focus on whether your strategic and operational plan contributes to your top-line, bottom-line and/or market share.
Customer
How do you want to look to your Customers?
Indicators focus on the specific measures that matter the most to your Customers.
Internal Business Processes
At which internal processes and capabilities do you want to excel?
Indicators focus on internal operations that enable Customer satisfaction, growth and profitability.
Learning and Growth
What skills and competencies do you need to implement your strategic and operational plan?
Indicators focus on your organization’s ability to innovate, improve and execute.
Emphasizing these four key areas, the Balanced Scorecard approach not only monitors present performance (lagging indicators), but also leading indicators about how well the organization is positioned to perform and compete well in the future.
The Balanced Scorecard is a strategic planning and performance management system that is used extensively in business, government, and nonprofit organizations to align business activities to the vision and strategy of the organization.
Some of the benefits of utilizing Balanced Scorecards as part of the strategy development and deployment process are:
Help the management team focus on the execution of their business strategy.
Focus and align an organization towards common goals and objectives.
Enable an organization to understand the relationship between measures and performance.
Improve communication of organizational priorities across an organization.
Help employees to understand and focus on organizational priorities and realize relevant results.
Reduce the number of metrics to the few vital key performance indicators.
Strengthen and formalizing the project selection process to focus on key capabilities and enablers.
Operational Excellence Consulting uses a three phase approach to facilitate the effective development and deployment of Balanced Scorecards and to ensure that the resulting scorecards adequately reflect an organization’s strategic initiatives, objectives and goals.
Elevate your team's performance and strategy execution to new heights with the Performance Scorecard Framework, crafted by former strategy consultants from elite firms such as BCG and EY. This unique tool combines the strengths of the Balanced Scorecard with an exclusive proprietary [read more]
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Performance Management (also known as Strategic Performance Management, Performance Measurement, Business Performance Management, Enterprise Performance Management, or Corporate Performance Management) is a strategic management approach for monitoring how a business is performing. It describes the methodologies, metrics, processes, systems, and software that are used for monitoring and managing the business performance of an organization.
As Peter Drucker famously said, "If you can't measure it, you can't improve it."
Having a structured and robust Strategic Performance Management system (e.g. the Balanced Scorecard) is critical to the sustainable success of any organization; and affects all areas of our organization.
The Balanced Scorecard is a strategic performance management system that is used extensively in business, government, and nonprofit organizations to align business activities to the vision and strategy of the organization.
The Balanced Scorecard (BSC) Deployment Process Module includes: [read more]
A Strategy Map is a diagram that conveys the primary strategic goals being pursued by an organization. It is a strategic part of the Balanced Scorecard (BSC) framework to describe strategies for value creation. More specifically, a Strategy Map describes how our organization creates value by [read more]
This presentation is an introduction of the balanced scorecard concepts and its application in corporate performance measurement. It has been used by a major consulting firm in conducting education sessions for its clients in a balanced scorecard project.
The contents include: BSC concept, BSC [read more]
The objectives of this document are:
- Provide an understanding of Balanced Score Cards (BSC):
- Definition - What they are?
- Context - When the are used?
- Benefits - Why they are used?
- Development and implementation - How they are used?
- Provide ways of overcoming [read more]
Balanced Scorecards tell you the knowledge, skills and systems that your employees will need (learning and growth) to innovate and build the right strategic capabilities and efficiencies (internal processes) that deliver specific value to the market (customer) which will eventually lead to higher shareholder value (financial). –
