The Balanced Scorecard is a management system that allows managers to focus on important success factors of their particular business. It combines financial, customer, internal process and learning and growth perspectives.
The origins of the Balanced Scorecard can be traced back to 1992 when Robert S. Kaplan and David Norton introduced a method for measuring a company’s performance.
Above: Balanced Scorecard
To create a Balanced Scorecard follow these three steps;
1. Translate your vision into operational goals
2. Communicate your vision and link it to performance
3. Review, feedback and adjust the strategy
A typical Balanced Scorecard will measure:
Example: Number of debtors, cash flow or return on investment
Example: Time taken to process a phone call, results of customer surveys, number of complaints
Business process perspective
Example: Key business processes
Learning & Growth perspective
Example: Hours spent on staff training etc.