Balanced Scorecard: How To Create A Public Sector BSC
2 July 2021
Public Sector and Not-for-Profit Balanced Scorecard
While the Balanced Scorecard has been designed for commercial companies, the framework has found wide-spread use in the public and not-for-profit sector. The Advanced Performance Institutes has worked with many government and not-for-profit organisations to implement performance management frameworks.
The challenge is how to apply the commercial company focused template of the Balanced Scorecard in public sector and not-for-profit organisations. Here are the key changes to the Balanced Scorecard template in order to make it relevant to those organisations:
- Move the Financial Perspective of the Balanced Scorecard to the bottom of the template. The overall objective of most public sector, government and not-for-profit organisations is not to maximise profits and shareholder return. Instead, money and infrastructure are important resources that have to be managed as effectively and efficiently as possible to deliver the strategic objectives.
- The overall objective in of public sector, government and not-for-profit Balanced Scorecards is to deliver services to their key stakeholders, which can be the public, central government bodies or certain communities. This perspective usually sits at the top of the template to highlight the key stakeholder deliverables and outcomes.
- The two remaining Balanced Scorecard perspectives will stay as they are. Any public sector, government and not-for-profit organisations needs to build the necessary human, information and organisational capital to deliver its key processes in the middle of the map.
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