The Balanced Scorecard (BSC) is a report card for your business. Â It is a strategic management tool that allows you to view the organization from different perspectives. The Balanced Scorecard allows a leaderÂ to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. The tool was created by Robert Kaplan and David Norton in the 1990’s.
Earn Your Grades With a Balanced Scorecard
This tool is truly a management system! It brings together all measures around both internal processes and external outcomes. A BSC supports continuous improvement at the level of strategic performance. The following attributes are the four elements of a BSC:
- Financial – Performance as seen by shareholders.
- Growth & Development – How well do you foster ongoing change and continuous improvement?
- Business Process – Key processes you use to meet or exceed customer and financial requirements.
- Customer Service – What the customers are perceiving or experiencing.
The BSC prompts a leader to develop meaningful metric, targets, then collect and analyze the relevant data. This allows a leader to effectively review strategic implementation based on measurement, not perception.
Moving Forward With Confidence
For many business leaders, measuring the success of strategic objectives typically falls back on financial performance. It is all about the bottom line! The advantage of a BSC broadens strategic measures and gives a much broader and more accurate picture of the performance of the organization. Financials are part of the BSC, but measures what’s happened in the past. In today’s environment, organizations must create value and invest in the future of all portions of the business. Organizations mustÂ invest in customers, suppliers, employees, processes, technology, sustainability, community, education, and innovation.Â That is the forward thinking required to be successful and compete in today’s environment. Thus the distinct advantage of utilizing the Balanced Scorecard (BSC).