ANSWER

A balanced scorecard is a framework that organizations can use to align business activities to the organization’s strategy and vision. Although often viewed as a strategic tool, the balanced scorecard works equally well at the operational level.

Originated by Dr. Robert Kaplan and David Norton, it combines both financial and non-financial performance measures to give a ‘balanced’ view of the organization. Performance measures are established and monitored within each of the following four perspectives:

• Financial
• Customer
• Internal business processes
• Learning and growth

As described by Kaplan and Norton, the balanced scorecard enabled companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. The scorecard wasn’t a replacement for financial measures; it was their complement. (Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review, July 2007).

Basic concepts of the balanced scorecard approach are explained in this short video Strategic Planning with the Balanced Scorecard.

--
Sandy Lambert
Business Architect
LinkedIn Profile