The balanced scorecard and how can it help you meet your objectives

The balanced scorecard is a tool that was first created in 1987 at Analog Devices, by Arthur Schneiderman (source).  The balanced scorecard is a set of four measures that are directly linked to a organization’s strategy.  The four measures are “financial performance”, “customer knowledge”, “internal business processes”, and “learning and growth”.  The “financial performance” measure is supposed to answer the question, “To succeed financially, how should we appear to our shareholders?” The “customer knowledge” measure is supposed to answer the question, “To achieve our vision, how should we appear to our customers?”  The “internal business processes” measure should answer the question, “To satisfy our shareholders and customers, at which business processes must we excel?”  Finally, the “learning and growth” measure should answer the question, “To achieve our vision, how will we sustain our ability to change and improve?”  For each of the four measures, you are to define long-term and short-term objectives, measures, targets, and initiatives.

Personally, I like the concept.  It acts as a framework for the commonsense idea of converting an organization’s vision and strategy into measurable metrics.  There is a large number of organization that have gone as far as linking employee pay and advancement.

Leave a Reply

Your email address will not be published.