What is it?
The Balanced Scorecard (BSC) is a strategic management tool used by organisations to track and manage performance across multiple dimensions. Introduced by Robert Kaplan and David Norton in the early 1990s, it provides a framework for organisations to translate their vision and strategy into measurable objectives. The BSC helps balance financial metrics with non-financial performance indicators to offer a more comprehensive view of organisational performance. It typically focuses on four key perspectives:some text
- Financial Performance: Metrics like revenue growth, profit margins, and return on investment.
- Customer Perspective: Measures of customer satisfaction, retention, and acquisition.
- Internal Business Processes: Efficiency and effectiveness of internal operations.
- Learning and Growth: Employee development, innovation, and continuous improvement.
Why is it important?
- Holistic View of Performance: The Balanced Scorecard provides a broad view of organisational performance by combining both financial and non-financial metrics, helping leaders make better strategic decisions.
- Strategic Alignment: It helps align daily operations with long-term strategic objectives, ensuring that everyone in the organisation is working toward the same goals.
- Improved Decision-Making: By focusing on key metrics across different areas, the BSC enables data-driven decision-making and helps identify areas of improvement.
- Enhanced Communication: The Balanced Scorecard helps communicate organisational goals and objectives clearly across all levels of the company, ensuring that employees understand how their actions contribute to the overall strategy.
- Performance Monitoring: It provides a structured approach to track progress toward strategic goals and identify gaps, allowing for timely adjustments and continuous improvement.
