The balanced scorecard (BSC) is a strategic planning and management system. Organizations use BSCs to: Show
The name “balanced scorecard” comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more “balanced” view of performance. The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy. A key benefit of using a disciplined framework is that it gives organizations a way to “connect the dots” between the various components of strategic planning and management, meaning that there will be a visible connection between the projects and programs that people are working on, the measurements being used to track success (KPIs), the strategic objectives the organization is trying to accomplish, and the mission, vision, and strategy of the organization.
 STRATEGY OBJECTIVES AND TARGETS INITIATIVES provide context visualize strategyStrategic Objectives are Continuous Improvement Activities that we have to implement for success Targets are the desired level of performance for each measure. STRATEGY OBJECTIVES AND TARGETS INITIATIVES visualize strategyStrategic Objectives are Continuous Improvement Activities that we have to implement for success Targets are the desired level of performance for each measure. Who Uses the Balanced Scorecard (BSC)?BSCs are used extensively in business and industry, government, and nonprofit organizations worldwide. More than half of major companies in the US, Europe, and Asia are using the BSC, with use growing in those areas as well as in the Middle East and Africa. A recent global study by Bain & Co listed balanced scorecard fifth on its top ten most widely used management tools around the world. BSC has also been selected by the editors of Harvard Business Review as one of the most influential business ideas of the past 75 years. Learn More What Are Balanced Scorecard Perspectives?
The BSC suggests that we examine an organization from four different perspectives to help develop objectives, measures (KPIs), targets, and initiatives relative to those views.
Learn more What Are Strategic Objectives?Strategic Objectives are the actions we must implement into our daily activities in order to see improvement in our strategies. They break down abstract concepts like mission and vision into actionable steps. Learn About Objectives and Key Results
Learn more What Is a Strategy Map?One of the most powerful elements in the BSC methodology is the use of strategy mapping to visualize and communicate how value is created by the organization. A strategy map is a simple graphic that shows a logical, cause-and-effect connection between strategic objectives (shown as ovals on the map). What Are Performance Measures (KPIs)?For each objective on the strategy map, at least one measure or Key Performance Indicator (KPI) will be identified and tracked over time. KPIs indicate progress toward a desirable outcome. Strategic KPIs monitor the implementation and effectiveness of an organization’s strategies, determine the gap between actual and targeted performance and determine organization effectiveness and operational efficiency. Learn More
Learn more What Are Strategic Initiatives?Strategic Initiatives are projects (new or existing) that are designed to help the organization achieve Strategic Objectives and have significant organization-wide impact. They are managed formally like any other project, meaning they are explicitly defined in terms of owner, schedule, resources needed, action steps, progress, and expected results. Some Strategic Initiatives are short-term (taking only a few days to implement) while others can take years to fully implement. Strategic Project Management is the process of managing projects to achieve strategic success. What is Cascading?Cascading a balanced scorecard means to translate the corporate-wide scorecard (referred to as Tier 1) down to first business units, support units or departments (Tier 2) and then teams or individuals (Tier 3). Cascading strategy focuses the entire organization on strategy and creating line-of-sight between the work people do and high level desired results. As the management system is cascaded down through the organization, objectives become more operational and tactical, as do the performance measures. Accountability follows the objectives and measures, as ownership is defined at each level. This alignment step is critical to becoming a strategy-focused organization. BSC Automation and Performance AnalysisOnce a scorecard has been developed and implemented, performance management software can be used to get the right performance information to the right people. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information. The Balanced Scorecard Institute formally recommends the QuickScore Performance Information SystemTM developed by Spider Strategies and co-marketed by the Institute. Learn More
Balanced Scorecard HistoryThe Balanced Scorecard was originally developed by Dr. Robert Kaplan of Harvard University and Dr. David Norton as a framework for measuring organizational performance using a more balanced set of performance measures. Traditionally companies used only short-term financial performance as the measure of success. The “balanced scorecard” added additional non-financial strategic measures to the mix in order to better focus on long-term success. The system has evolved over the years and is now considered a fully integrated strategic management system. This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton and built on work by Art Schneiderman at Analog Devices. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to ‘balance’ the financial perspective. Kaplan and Norton describe the innovation of the balanced scorecard as follows: “The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.”
Strategic PlanningLearn More Ready for IN PERSON Training?The Balanced Scorecard Institute is back in person! Visit the Washington DC region in October and get Balanced Scorecard Professional Certification while you visit! Learn more BSC-KPI-OKR: The Alphabet of Strategy ManagementView the replay Balanced Scorecard Professional CertificationLearn More Learn More Free Articles& White PapersClick Here Nominate your organization for the Institute's Award for ExcellenceLearn More Explore OurExplore Now DISCOUNTSGet Your Team BSC Certified and Save $1,500 or More! See our Multi-Person Discounts for More. Learn More The Institute WayOrder Now “This is one of the best professional courses I’ve taken in my career. I will be able to apply the learnings immediately when I return to the office.” Brian BurtonGroup Project Manager, T-Mobile US, Inc. “Although we only implemented the balanced scorecard approach a couple of years ago, we have already seen improvements in our operations. The Nine Steps to Success™ approach helps us focus on our ambitious goal to drastically increase the number of transplants we facilitate by 2015.” Michael BooChief Strategy Officer, National Marrow Donor Program “This course converted me from a skeptic into a believer” Thedora BorissovManager, Performance and Measurement, BC Oil and Gas Commission How to Learn MoreTo create a balanced scorecard, BSI recommends learning the Nine Steps to Success™. To learn more about this methodology, see our Professional Certification Programs, which are offered in association with the George Washington University Center for Excellence in Public Leadership, or contact us below with questions or inquiries about consulting services. What are key performance indicators in balanced scorecard?A complete KPI scorecard should have performance measurements that include not only financial targets, but also customers and stakeholders, internal processes and employee learning and growth to develop a comprehensive dashboard to drive business objectives and goals.
Which of the following are groups of performance measures used in the balanced scorecard approach?Choose the four groups of performance measures typically used in the balanced scorecard approach. Financial, customer, internal business processes, and learning and growth.
What performance dimensions are typically included in a balance scorecard?A balanced scorecard typically includes four perspectives of an organization: financial, customer, internal business process, and learning and growth.
Which of the following is not part of balanced scorecard?The correct answer is b) External control perspective. The four perspective of a balanced scorecard are: Financial Perspective—adding value for shareholders. Customer Perspective—providing customer satisfaction.
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