The balanced scorecard has revolutionized the way that strategic measurement progress has been measured and analyzed[i]. Pioneered by Robert Kaplan and David Norton (the founders of the balanced scorecard movement), the balanced scorecard is a leading-edge approach to framing and executing strategy. It puts a spotlight on the few things that truly matter when it comes to executing strategy.
Here is a look at a generic balanced scorecard sample (each organization will have its own customized version):
While the balanced scorecard may look busy and complicated, with excellent guidance it is not! For optimal results, a balanced scorecard should always be customized to the adopting organization. To be considered best practice, building a balanced scorecard is usually comprised of six or seven steps (depending on the sector). The benefits are numerous, and include (but are certainly not limited to):
- Superior communication of strategy;
- Better execution of strategy;
- An excellent springboard to superior performance management;
- An excellent “manage by exception” results assessment; all which lead to,
- Enhanced management credibility.
If you are interested in finding out more about building a balanced scorecard, start right here.
This content has been primarily adapted from Scholey, C. A Practical Guide to the Balanced Scorecard (CCH Canadian, 2002).