Balanced

Scorecard
Balanced Scorecard: what is it ? .. (1)
 At the highest level, the Balanced Scorecard (BSC) is a
framework that helps organizations to translate strategy
into operational objectives that drive both behavior and
performance.
 Drs. Robert Kaplan (Harvard Business School) has
subsequently published another book on the subject, called
The Balanced Scorecard: You Can't Drive a Car Solely
Relying on a Rearview Mirror.
 Note that the Balanced Scorecard is a management
system — not a measurement system. Measurement is a
key aspect of the Balanced Scorecard, but it is much more
than just measurement; it is a means to setting and
achieving the strategic goals and objectives for your
organization.
Balanced Scorecard: what is it ? .. (2)
Question:
Answer:
How can complex organizations
achieve results like this in such Alignment!
short periods of time?

The Balanced Scorecard process allows an organization to align and focus all its
resources on its strategy

BUSINESS UNITS STRATEGY EXECUTIVE TEAM

HUMAN RESOURCES INFORMATION

TECHNOLOGY

BUDGETS AND CAPITAL

INVESTMENTS
 Balanced Scorecard: the ingredients of
highly successful
1. Leadership From the Top
 Create the Climate for
Change
 Create a Common Focus for
Change Activities
 Rationalize and Align the
Organization
4. Make Strategy a Continuous
Process
 Strategic Feedback That
Formulate Encourages Learning
 Executive Teams Manage
Strategic Themes
 Testing Hypotheses,
Adapting, and Learning

Communicate STRATEGY Navigate

2. Make Strategy Everyone’s Job 3. Unlock and Focus Hidden

 Comprehensive Assets
Communication to Create
Execute  Reengineer Work Processes
Awareness
 Create Knowledge Sharing
 Align Goals and Incentives
Networks
 Integrate Budgeting with
Strategic Planning
 Align Resources and
Initiatives
Balanced Scorecard: what is the focus ?
They typically focus your company strategy around the following
areas:
 Financial Perspective – How do you look against the financial
objectives of the company’s owners
 Customer Perspective – How do you look to your current and
prospective customers?
 Internal Business Perspective – What must you excel run
an effective business?
 Learning Perspective – What must you organization learn to
improve your business?

You not only have to measure these critical four focus, but also
set strategies, goals, objectives, and tactics to make them
happen. And while you're at it, you have to make sure that your
strategies and tactics are congruent. They have to work together
and create a single thread, tying together in ways that make
sense. This isn't an optional exercise; it's essential. The future of
your business depends on it.
Balanced Scorecard: the positioning of a
perspective framework
Balanced Scorecard: the positioning of a
perspective framework .. (illustration)
Balanced Scorecard as a Centerpiece of
Strategy
Strategic Maps and Balanced Scorecards:
issues & metrics
Strategic maps help communicate your corporate strategy. And, balanced
scorecards are a way to measure your strategic progress.
Strategic Maps and Balanced Scorecards:
illustration – corp.
Sample: Value Budget
Sample: Value Creating Processes
Sample: Value Time Line
Case Study – corp.
Case Study – personal
Some of the Indicators of Good Balanced
Scorecard
1. Executive Involvement
Strategic decision makers must validate and own
the strategy and related measures

2. Cause-and-Effect Relationships
Every objective selected should be part of a chain of
A good Balanced cause and effect linkages that represent the
Scorecard will strategy
“tell the story” of
3. Balance between outcome and leading
your strategy in measures There should be a balance of outcome
actionable terms. measures and leading measures to facilitate
anticipatory management
4. Financial Linkage
Every objective can ultimately be related to financial
results

5. Linkage of Initiatives and Measures: Each

initiative should be based on a gap between
baseline and target.
Management Cockpit
 A Dashboard—Management Information System for
effective making decision
 Information will be updated regularly and presented in
the clarity, summary, and predetermined and
sequenced basis
Management Cockpit