Balanced Scorecard

The Balanced Scorecard is a strategic planning and management system used in business and industry, government, and non-profit organizations to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

At a very high level, the Balanced Scorecard is used in the context of business, strategy, performance management.

Balanced Scorecard quadrant descriptions, including examples
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What is the Balanced Scorecard?

A visual explanation is shown in the image above. The Balanced Scorecard can be described as a matrix with the following quadrants:

  1. Financial: Focuses on financial objectives and performance measures, e.g., 'Increase quarterly revenue by 10%'.
  2. Customer: Emphasizes customer satisfaction and market share goals, e.g., 'Improve customer satisfaction score by 15%'.
  3. Internal Business Processes: Outlines key internal processes necessary to deliver customer objectives, e.g., 'Reduce production cycle time by 20%'.
  4. Learning and Growth: Focuses on intangible assets like human capital and innovation, e.g., 'Increase employee training hours by 30%'.

What is the purpose of the Balanced Scorecard?

The Balanced Scorecard (BSC) is a performance management tool that provides a view of an organization from four perspectives: Financial, Customer, Internal Business Processes, and Learning and Growth. Developed by Robert Kaplan and David Norton, the BSC helps organizations translate their vision and strategy into a coherent set of performance measures.

The BSC is divided into four quadrants:

  • Financial: This perspective focuses on financial objectives and performance measures, such as revenue growth, profitability, and cost management. It answers the question, 'How do we look to shareholders?'
  • Customer: This perspective emphasizes customer satisfaction and market share goals. It answers the question, 'How do customers see us?'
  • Internal Business Processes: This perspective focuses on internal operational goals and outlines the key processes necessary to deliver the customer objectives. It answers the question, 'What must we excel at?'
  • Learning and Growth: This perspective focuses on the intangible assets of an organization, primarily human capital, information capital, and organizational capital. It answers the question, 'How can we continue to improve and create value?'

By balancing these four perspectives, organizations can monitor both current performance (financial and customer) and the drivers of future performance (internal processes and learning and growth), ensuring a more comprehensive view of their strategic objectives and performance.

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What templates are related to Balanced Scorecard?

The following templates can also be categorized as business, strategy, performance management and are therefore related to Balanced Scorecard: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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