Balanced Scorecard: An Introduction
2 July 2021
Over recent years the Balanced Scorecard (BSC) has evolved into one of the most popular strategic management tools. The BSC was developed by Robert Kaplan and David Norton in the early 1990s and initially positioned as a strategic performance measurement innovation to counteract the prevalent financial bias in existing performance measurement systems.
The initial idea of the Balanced Scorecard
The initial idea of the Balanced Scorecard was that financial measures are lag indicators, which when used in isolation, could lead to short-term thinking. To promote the long-term value creation it was suggested that the financial perspective of performance should be complemented with measures in three supplementary perspectives, namely customer perspective, internal business perspective, and innovation and learning perspective.
Repositioning the Balanced Scorecard
In 1996, the Balanced Scorecard was repositioned as a strategic management system and it was suggested that firms move away from presenting Balanced Scorecards in a four-box model. Instead it was suggested that firms create a strategy map as the visual representation of a company’s critical objectives and the cause-and-effect relationships among them.
Balanced Scorecard Today
Today, strategy maps are seen as vital components of a Balanced Scorecard as they allow firms to understand how their intangibles are converted into tangible outcomes.
Related Articles
How To Rethink Your Job As AI Agents Reshape Work
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
What I Learned At Cisco’s AI Summit, And Why It Changed How I Think About The Next 12 Months
By now, “smart” versions exist of just about every home appliance, gadget and gizmos we can think of. However, manufacturers continue[...]
Sign up to Stay in Touch!
Bernard Marr is a world-renowned futurist, influencer and thought leader in the fields of business and technology, with a passion for using technology for the good of humanity.
He is a best-selling author of over 20 books, writes a regular column for Forbes and advises and coaches many of the world’s best-known organisations.
He has a combined following of 4 million people across his social media channels and newsletters and was ranked by LinkedIn as one of the top 5 business influencers in the world.
Bernard’s latest book is ‘Generative AI in Practice’.
Social Media