Introduction to Balance Scorecarding…

November 25th, 2008

Today I am going to Introduce Balance Scorecarding, which is one of many theories to effective strategic planning and management. 

The Balance Scorecard was introduced by Dr. Robert Kaplan and David Norton in the early 1990’s as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more ‘balanced’ view of organizational performance.

The Balance Scorecard goes beyond the standard fianancial measures to include the following additional perspectives: the customer perspectives, the internal process perspective, and the learning and growth perspective. 

- Financial perspective- includes measures such as operating income, return on capital employed, and economic value.

- Customer perspective- includes measures such as customer satisfaction, customer retention, and market share in target segments.

- Business process perspective- includes measures such as cost and quality. Used for business processes such as production and order fulfillment.  

- Learning and Growth perspective- includes measures such as employee satisfaction, employee retention or skill sets. 

These perspectives are just a suggested start, feel free to be able to choose what perspectives cater to the objective and goal. This is just the introduction of Balance Scorecarding. Next post will be about developing objectives, targets, and measures. 

Thank you for your time. 

Joe Sobieck