Definition
A balanced scorecard is a strategic planning and management tool. Its purpose is to calculate organizational performance beyond the traditional financial measures. It is outcome-focused and provides a balanced view of an enterpriseA system of one or more organizations and the solutions they use to pursue a shared set of common goals. by implementing the strategic planA detailed scheme for doing or achieving something usually comprising a set of events, dependencies, expected sequence, schedule, results or outcomes, materials and resources needed, and how stakeholders need to be involved. as an active framework of objectives and performance measures.
The underlying premise of the balanced scorecard is that the drivers of value creation are understood, measured, and optimized in order to create sustainable performance.
The balanced scorecard includes tangible objectives, specific measures, and targeted outcomes derived from an organization’s vision and strategyA description of the chosen approach to apply the capabilities of an enterprise in order to reach a desired set of goals or objectives..
Balanced business scorecards can be used at multiple levels within an organizationAn autonomous group of people under the management of a single individual or board, that works towards common goals and objectives. such as enterprise-wide level (macro level), departmental or function level, and even at the level of a projectA temporary endeavour undertaken to create a unique product, service, or result. or initiativeA specific project, program, or action taken to solve some business problem(s) or achieve some specific change objective(s).. They also can be used for short, medium, and long-term goals.
Balanced Scorecards should not be used as the single tool for strategic planning. It is one tool to be used in a suite of strategic planning tools.
Why use a Balanced Scorecard?
This matrixA textual form of modelling used to represent information that can be categorized, cross-referenced, and represented in a table format. is also particularly helpful for complex initiatives that require knowing who must be able to decide what to do during each step.
Facilitates holistic and balanced planning and thinking.
Harmonizes short, medium, and long-term goals into programs with incremental success measures.
Helps strategic, tactical, and operational teams aligning in their work.
Encourages forward thinking and competitiveness.
Balanced scorecard Elements
How to build a Balanced Scorecard
How to use a Balanced Scorecard
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On top of the brief description of the method, access to:
- an explanation of when and how to use it,
- a practical example,
- tips and recommendations for use,
- downloadable checklists and templates,
- references for further reading,
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