Scorecard: What is a Balanced Scorecard?

The Balanced Scorecard (BSC) was developed by Robert Kaplan, professor at Harvard University and David Norton, a business consultant, also from the Boston area.

The Balanced Scorecard complements the financial measures of past performance with measures of the drivers of future performance. The objectives and indicators of the scorecard are derived from the vision and strategy of an organization and consider the performance of the organization from four perspectives: financial, customer, internal process and training and growth. These four perspectives provide the structure for the balanced scorecard.

The Balanced Scorecard can be used to:

- Clarify the strategy and obtain consensus on it.

- Communicate the strategy throughout the organization.

- Align personal and departmental objectives with the strategy.

- Link strategic objectives with long-term objectives and annual budgets.

- Identify and align strategic initiatives.

- Perform periodic and systematic strategic reviews.

- Obtain feedback to learn about  the strategy and improve it.

The Balanced Scorecard fills the void that exists in most management systems: the lack of systematic processes to implement and obtain feedback on the strategy.

Management processes around the scorecard allows the organization to focus on the implementation of long-term strategy. Used in this way, the Balanced Scorecard becomes the pillars to manage the organizations of the information age.

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