Created by Robert S. Kaplan and David P. Norton after an year-long research project with 12 companies, the Balanced Scorecard is a set of measures used by top managers to provide a quick and complete view of the business (Kaplan & Norton, 1992). It contains the financial results of the actions already taken as well as operational measures on customer satisfaction, internal processes, and the organization’s innovation and improvement activities. In short, the Balanced Scorecard answers these 4 questions (Kaplan & Norton, 1992):
1. How do customers see us? (Customer Perspective)
2. What must we excel at? (Internal Perspective)
3. Can we continue to improve and create value? (Innovation and Learning Perspective)
4. How do we look to shareholders? …show more content…
Employee satisfaction, retention, training and skills are very important measures as employees are the direct link to customers and products. Lack of any of these measures would prevent complete success within the company. Measures for systems include the ability to launch new products, create more value for customers, and penetrate new markets. As previously mentioned, in a growing market, a company cannot rely on solely one product to succeed; they must be continuously improving and creating new products to stay ahead of the competition. Measures for organizational procedures include the alignment of employee incentives with overall organizational success factors and rates of improvement in critical customer-based and internal processes (Olsen, …show more content…
The Balanced Scorecard allows staff members and external shareholders to understand the strategy and engage in the delivery and review of the strategy (Marr, n.d.).
Better Alignment of Projects and Initiatives
An organization with a Balanced Scorecard will be able to map their projects and initiatives to the various strategic objectives. This will ensure that these projects and initiatives are firmly motivated on delivering the most strategic objectives (Marr, n.d.).
Better Management Information
Incorporating a Balanced Scorecard within an organization allows organizations to design Key Performance Indicators (KPI) for their many strategic objectives, letting them measure what really matters (Marr, n.d.).
Better Organizational Alignment
To have a well-executed plan, organizations must ensure all business units and support functions are working towards the same objectives. Implementing a Balanced Scorecard will assist in achieving this as well as be able to link strategy to operations (Marr, n.d.)
Concerns/Issues from a Business and Project Management
1. How do customers see us? (Customer Perspective)
2. What must we excel at? (Internal Perspective)
3. Can we continue to improve and create value? (Innovation and Learning Perspective)
4. How do we look to shareholders? …show more content…
Employee satisfaction, retention, training and skills are very important measures as employees are the direct link to customers and products. Lack of any of these measures would prevent complete success within the company. Measures for systems include the ability to launch new products, create more value for customers, and penetrate new markets. As previously mentioned, in a growing market, a company cannot rely on solely one product to succeed; they must be continuously improving and creating new products to stay ahead of the competition. Measures for organizational procedures include the alignment of employee incentives with overall organizational success factors and rates of improvement in critical customer-based and internal processes (Olsen, …show more content…
The Balanced Scorecard allows staff members and external shareholders to understand the strategy and engage in the delivery and review of the strategy (Marr, n.d.).
Better Alignment of Projects and Initiatives
An organization with a Balanced Scorecard will be able to map their projects and initiatives to the various strategic objectives. This will ensure that these projects and initiatives are firmly motivated on delivering the most strategic objectives (Marr, n.d.).
Better Management Information
Incorporating a Balanced Scorecard within an organization allows organizations to design Key Performance Indicators (KPI) for their many strategic objectives, letting them measure what really matters (Marr, n.d.).
Better Organizational Alignment
To have a well-executed plan, organizations must ensure all business units and support functions are working towards the same objectives. Implementing a Balanced Scorecard will assist in achieving this as well as be able to link strategy to operations (Marr, n.d.)
Concerns/Issues from a Business and Project Management