Balanced Scorecard

What is a Balanced Scorecard

Balanced Scorecard is a strategic management tool. Organizations use this scorecard as a tool to connect their goals and strategies with how they measure their performance. Dr. Robert Kaplan, a professor at Harvard Business School, and Dr. David Norton, a well-known business strategist and consultant, in the 1990s, created the balanced scorecard. The scorecard system is highly beneficial as it enhances organizations’ decision-making and continuously guides them toward improvement over time.

The Balanced Scorecard Framework

Balanced Scorecard

The framework encompasses four key perspectives that provide a holistic view of an organization:

  • Financial Performance: This perspective focuses on traditional measures of an organization’s profitability and financial status. In this, we have metrics such as net income, return on investment, market share, and cash flow.
  • Customer: This perspective emphasizes the importance of understanding and meeting customer needs. In this category, we have metrics such as customer retention, customer satisfaction, number of complaint logs, and customer loyalty.
  • Internal Business Process: This perspective evaluates the effectiveness and efficiency of an organization’s internal processes. Metrics within this perspective are project management, throughput, and Six Sigma.
  • Learning and Growth: This perspective acknowledges the significance of continuous learning and development within an organization. Metrics associated with this perspective include staff morale, training levels, investment in training, and knowledge sharing.

Example of a Balanced Scorecard

Balanced Scorecard

The above balanced scorecard balances the company’s objectives across different dimensions: financial, customer, internal processes, and learning and growth. It ensures that the company focuses on financial success while also prioritizing customer satisfaction, optimizing internal processes, and fostering employee development.

To implement this, we define KPIs (Key Performance Indicators) for each objective. Regular monitoring and review of the KPIs would allow the company to identify areas of improvement and make data-driven decisions to drive overall performance and success in the service industry.


In summary, a balanced scorecard is a valuable tool for strategic management, allowing organizations to measure, monitor, and improve performance across multiple dimensions. By utilizing a balanced set of metrics and perspectives, organizations can enhance decision-making processes, drive continuous improvement, and achieve long-term success.

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