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
The Eight Biggest HR Trends In 2024
For those working in employee and people management, the focus in 2024 will be on managing[...]
Coca-Cola’s Latest Generative AI Initiative Is All About Festive Customer Engagement
Generative AI is transforming the way that brands engage with consumers.[...]
The Rise Of Generative AI In Design: Innovations And Challenges
Artificial Intelligence has been used in design and manufacturing for some time[...]
AI-Enhanced Employee Onboarding: A New Era In HR Practices
Onboarding new employees has always been a pivotal part of HR's responsibilities.[...]
The Biggest Banking And Financial Services Trends For 2024
2024 promises to be a landmark year in banking and finance, marked by significant[...]
The Evolution Of Data-Driven And AI-Enabled HR
The pulse of any organization lies not just in its products or services but in its people.[...]
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