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The Balanced Scorecard | DecideAct

Balanced Scorecard

Balanced Scorecard (BSC) is a methodology for measuring strategic management performance. Robert Kaplan and David Norton introduced the concept in their 1992 Harvard Business Review article, “The Balanced Scorecard: Measures that Drive Performance.” Kaplan and Norton later wrote a bestselling book, The Balanced Scorecard: Translating Strategy into Action, in 1996.

Financial performance indicators are an accurate enough measurement historically speaking, but can’t take into account leading performance indicators that predict future results. The Balanced Scorecard methodology offers a multifaceted view of business success—countering the shortcomings of lagging financial indicators to gauge performance.

The BSC includes four perspectives to strategy success:

  1. Financial Perspective
  2. Customer Perspective
  3. Business Process Perspective
  4. Learning and Growth Perspective

Elements within each perspective include:

  • Strategic Objectives: qualitative description of the Desired State
  • Measures: Key Performance Indicators that measure progress
  • Targets: desired financial outcomes
  • Initiatives: activities implemented to achieve targets

The following illustrates a Balanced Scorecard approach to strategy:

Balanced Scorecard

The BSC offers a balance between short-term and long-term objectives; desired outcomes and their performance drivers; and objective/subjective ways of measuring progress.

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Bjarni S. Jonsson

Bjarni S. Jonsson, Co-Founder and CSO of DecideAct, is a strategy specialist and social entrepreneur focusing on large-scale human system change and evolution. Bjarni is a founding partner at DecideAct, a Strategy Execution Software company specializing in implementing large scale organizational and cultural change. Bjarni has a Cand Oecon degree from the University of Iceland, an MBA from University of Michigan Ross School of Business, and finished his doctoral thesis in June 2013 at the Adizes Graduate School in California. His doctoral research was on the significance of citizen communicative engagement in social issues and how that relates to conscious evolution of human social systems.