If the quoted authors are right, the balanced scorecard even resembles a typical management fashion. Kaplan coauthored the strategyfocused organization and strategy maps book with his wellrenowned fellow executive david p. Balanced scorecard university of california, san diego. Balanced scorecard basics communicat business systems. It is best considered a valuebased strategic planning and management tool that can assist extension professionals and their clients best consider what. Kpis and balanced scorecard reporting for management mr. Kaplan and norton emphasize that learning is more than training. By focusing not only on financial outcomes but also on the human issues, the balanced scorecard helps to provide a more comprehensive view of a. What follows, provides guidance and advice on the development and implementation of a balanced scorecard for those organisations considering the introduction of a. Kaplan and nortons future vision of the balanced scorecard. When robert kaplan and david norton first introduced the concept. Linking the balanced scorecard to strategy strimgroup. Developed by robert kaplan and david norton, the balanced scorecard method translates an organisations strategy into performance objectives, measures.
Norton introduced the balanced scorecard, a set of measures that allow for a holistic, integrated view of business performance. The purpose of the research is to find an empirical evidence concerning the implementation of learning and growth perspective of balanced scorecard bsc in assalaam islamic modern boarding school. Commentary transforming the balanced scorecard from performance measurement to strategic management. Kaplan and norton begin by saying that what you measure is. Developed by robert kaplan and david norton in the early 1990s, the balanced scorecard is more than a measurement systemin fact, its a management system. The balanced scorecardmeasures that drive performance.
The theory behind the balanced scorecard customer perspective is that you have to make your customers happy to sell them products and servicesand in order to make your customers happy, you have to understand them. The sec that the company was not satisfying some of its cus ond part of the balanced scorecard gives managers tomers and overachieving at others. Nortons concept of the balanced score card revolutionized conventional thinking about performance metrics. Introduction to the balanced scorecard and performance. The balanced scorecard professional certification program live online who should attend this program is recommended for those interested in building, implementing, and maintaining strategic performance. At the head of the strategy map is the overriding objective of the organisation which describes how it creates value. Kaplan is a professor born in 1940, new york united states he is renowned for his development of leadership at harvard business school as a professor, and as an executive of the balanced scorecard group. Pdf since the last decades, the performance management has become a legislative requirement for the private and public sectors.
Think of a balanced scorecard as the instrument panel in the cockpit of an airplane. The approach combines traditional financial measures with nonfinancial ones that drive business outcomes, so that organizations focus on the future and act in their longterm best interest. Balanced scorecard is a strategy performance management tool a semistandard structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. Using the balanced scorecard as a strategic management system by robert s. Translating strategy into action, kaplan and norton describe the balanced scorecard as a necessary move away from over reliance on financial measures. The balanced scorecard is a workshop technique for establishing the most useful high level measures by which to monitor your companys units progress and performance against its strategic goals.
Uc san diego was the first university in the nation to adopt the balanced scorecard in 1993 and the first university in the world to be inducted into the balanced scorecard hall of fame. Norton, which is also the cofounder, and president of the balanced scorecard groupon. The creators of the strategy map and balanced scorecard concept, professors robert s. They realize that no single measure can protives understand that their organizations measure vide a. Learning and growth perspective balanced scorecard institute.
The balanced scorecard bsc is an approach to performance measurement introduced by dr. The most wellknown of these approaches is the balanced scorecard proposed by kaplan and norton. Balanced scorecard an overview sciencedirect topics. Origins of the balanced scorecard the following extract. Balanced scorecard free download as powerpoint presentation. Conceptual foundations of the balanced scorecard robert s. The balanced scorecard bsc is a strategy performance management tool a semistandard structured report, supported by design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. Balanced scorecard, performance management tools, management control systems 1. The balanced scorecard measures that drive performance robert s. Using this insight, this model has been refined into the concept of the balanced scorecard, described by robert kaplan and david norton.
The balanced scorecardmeasures that drive performance robert s. Its updated for 2020, and tells you all the basics in plain english. The balanced scorecard is a strategic planning and performance management framework used by business, government, and nonprofits to align daytoday activities with enterprise vision, mission. Balanced scorecard metrics when companies used just the financial metrics to measure their performance they were doing what the race car driver was doingto the exclusion of other important measures of success.
To help you achieve this, weve outlined three things you need to do when you put together your balanced scorecard customer. Putting the balanced scorecard to work by robert s. The scorecard was originally created to supplement traditional. Using a balanced scorecard to measure your key performance. Norton is founder and president of the balanced scorecard collabo. The balanced scorecard summary how can we describe the balanced scorecard. Marco giorgino, in performance measurement and management for engineers, 2015. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. The balanced scorecard revolutionized conventional thinking about performance metrics. Its a great team building activity, process management tool and, when you do it properly, you end up with an action plan thats fully. Commentary transforming the balanced scorecard from.
Kaplan and norton describe the innovation of the balanced scorecard as follows. I believe this was the first article on the balanced scorecard. Introduction to the balanced scorecard and performance measurement systems 5 as a result of continued research and innovations over the last 15 years, the bsc has gone through an evolutionary process of improvement, from performance measurement 19901996 to performance management 19962000, to becoming a globally. This is our short and simple guide to the balanced scorecard. When designed properly it can provide an excellent management tool to help keep businesses and organisations on track. The boot camp covers the below content over 4 days.
Among the various methodologies proposed to build an indicator scorecard, the most widely used is the bsc kaplan and norton, 1992. By going beyond traditional measures of financial performance, the concept has given a generation of managers a better understanding of how their companies are really doing. David norton and i introduced the balanced scorecard in a 1992 harvard business. The balanced scorecard bsc process can align operational activities with an organisations vision, improve internal and external communications, and monitor organisation performance against strategic goals. The balanced scorecard approach emphasises the need to provide management with a set of information which covers all relevant areas of performance in an objective and unbiased fashion. But financial measures tell the story of past events, an.
The balanced scorecard measures that drive performance. Conceptual foundations of the balanced scorecard 3. By translating their strategy into the logical architecture of a strategy map and balanced scorecard, organizations create a common understandable point of reference for all their units and employees. The purpose of the article is to describe the balanced scorecard concept that the authors developed based on a research project involving 12 companies. Balanced scorecard the term was originally introduced by robert s. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy.
Balanced scorecard basics balanced scorecard institute. The balanced scorecard was developed by kaplan and norton 1992 as a performance measurement framework that added strategic nonfinancial performance measures to the traditional financial metrics to give managers and executives a more clear and holistic view of organizational performance. They created 4 viewpoints or perspectives for the organization. The balanced scorecard, a concept for measuring whether the activities of a company are meeting its objectives in terms of vision and strategy, was developed and first used at analog devices in 1987. The balanced scorecard was originally developed by dr. The phrase balanced scorecard primarily refers to a performance management. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in longterm capabilities and customer relationships were not critical for success. Translating strategy into action, published in 1996. Balanced scorecard 4 perspectives of the balanced scorecard.
An example of a balanced scorecard in the area of information management could look, for instance, like that shown in table 6. Using the balanced scorecard as a strategic management system. It is interesting to note that scorecard is actually a bit of a misnomer. Kaplan and dr norton have personally designed the palladium training curriculum and the professional kaplan norton balanced scorecard certification programme. Strategy mapping was developed by kaplan and norton as an extension to the balanced scorecard and to make implementations of the scorecard more successful. Kaplan, marvin bower professor of leadership development at harvard business school and the cocreator of the balanced scorecard, to. The objective was to overcome the inadequacies of the traditional financialbased performance measurement tools. It is a hangover from the early kaplan and norton days when the balanced scorecard was first introduced. The balanced scorecard retains traditional financial measures. When kaplan and norton first introduced the concept, in 1992, companies were busy transforming themselves to. David norton as a framework for measuring organizational performance using a more balanced set of performance measures. The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 using the balanced scorecard as a strategic management system. They realize that no single measure can protives understand that their organizations measure vide a clear performance target or focus attention on.
Developed by norton and kaplan at harvard business school, the model ensures that management considers many facets of operations while focusing on its vision. I have excerpted below their five futures expansions. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve. The improvement in internal processes through the kpi balanced scorecard, then help to drive increases in operating efficiency which result in higher customer satisfaction and increased financial performance. Strategic performance measurement using balanced scorecard.
The revolutionary work of kaplan and norton delivered to managements particular attention that overall performance required to be assessed in more strategic way. Balanced scorecard in 19923 and 19934 and their book in 19961. Norton, recently wrote an article, the future of the balanced scorecard. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. Norton ketika anda mencari referensi buku balanced scorecard, anda mungkin akan menemukan karya dari robert s. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. The article was based on a multicompany research project to study performance measurement in companies whose intangible assets played a central role in value creation nolan norton institute, 1991. This perspective includes employee training and corporate cultural attitudes related to both individual and corporate selfimprovement. Norton in the early 1990s refers to qualitative metrics to measure the efficiency of the information supply chain. In addition, it can help provide information on the chosen strategy more.
The scorecard contains four key groupings of performance measures. Balanced scorecard extension practice extension practice. Balanced scorecard financial measurement of organizational. Balanced scorecard stepbystep volta river authority.
The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 putting the balanced scorecard to work a list of related materials, with annotations to guide further. Using the balanced scorecard as a strategic management. Traditionally companies used only shortterm financial performance as the measure of success. The balanced scorecard, on the other hand, is well suited to the kind of organization many companies are trying to become. The scorecard puts strategy and vision, not control, at the center. Develop the strategy affirm mission, values and vision perform strategic analysis. Kaplan is a professor at harvard university and david p. My experiences as a balanced scorecard practitioner with a large canadian company taught me that tremendous results are possible with the tool, but to attain. Norton s concept of the balanced scorecard revolutionized conventional thinking about performance metrics. The balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past. A critique of the balanced scorecard as a performance. Introduction kaplan and norton developed the concept of the balanced scorecard bsc in 1992. Subsequently it has become very popular with forprofit origins of the balanced scorecard the following extract from kaplan and norton s seminal book on the subject1 explain the authors involvement in the early development of the balanced scorecard.