BALANCED

SCORECARD
T H O M A S R O Y T.

BALANCED SCORECARD BASICS

A strategic planning and management system used to align the business
activities to the vision and strategy of the organization
It was originated by Drs. Robert Kaplan and David Norton as a performance
measurement framework that added non financial performance measures to
traditional financial metrics to give managers and executives a more balanced
view of organization performance.
A clear prescription as to what companies should measure in order to balance
the financial perspective.
The Balanced Scorecard is a management system that enables organizations to
clarify their vision and strategy and translate them into action.

Financial
Performance

Custome
r
Satisfacti
on

Vision
and
Strate
gy
Knowled
ge and
Innovatio
n

Strategic objectives
Strategy Map
Performance
measures and
targets

Process
efficienc
y

PERSPECTIVES
The balanced scorecard suggests that we view the organization from four
perspectives and to develop metrics, collect data and analyse it relative to
each of these perspectives:
The Learning and Growth Perspective includes employee training,
corporate cultural attitudes, continuous learning mode, mentors and tutors,
ease of communication among workers, technological tools high
performance work systems
The Business Process Perspective refers to internal business processes,
how well their business is running, whether products and services conform
to business requirements
The Customer Perspective refers to customer focus and customer
satisfaction

S TR ATE G Y MAP P IN G
M i s s i o n : To d e l i v e r q u a l i t y r e l a y s t o c u s t o m e r s
V i s i o n : To a c h i e v e 5 0 0 c r o r e t u r n o v e r b y 2 0 2 0
S t r a t e g i c t h e m e : O p e r a t i o n a l E x c e l l e n c e B u i l d

t h e

b u s i n e s s

P r o d u c t

D e v e l o p m e n t

Strategy Map / Objectives

Measures

Targets

Initiatives

Financial

Turnover
Profit

Turnover 120
crores by 2017

Public
announceme
nt for every
additional
income

Customer
satisfaction
index
New
customers
added per
year

Score of 9 out
of 10
One new
customer per
year

Customer
visits
Timely
submission
of 8D reports

Operational
efficiency
New product
development

Labour cost
No. of
defects

Increase sales
Customer
Improve
customer
satisfaction

Internal
Business
Process
Reduce
Organizational
expenses
Capacity

Increase no. of
customers

Improve
operational
efficiency

Improve product
development

Reduce
defects

Reduce
machine
downtim
e

Product
develo
pment
team

Increase by
5%
One new
product in
every 6
months
Reduce by
20%
Reduce by

Maximise
production
Strengthen

MEASUREMENT IMPROVES
PERFORMANCE
Are you a measurement managed organization?
Do you have agreed upon measures?
Do you have a financial and non-financial balance?
Do you link strategy and operations?
Do you update scorecards regularly?
Do you have effective communications?

BUILDING AND IMPLEMENTING A

BALANCE SCORECARD
Nine steps to Success:
1. Assessment
2. Strategy
3. Objectives
4. Strategy Map
5. Measure and targets
6. Strategic initiatives
7. Automation
8. Cascading
9. Evaluation

PRIORITY AND FOCUS IMPROVES

EFFICIENCY AND EFFECTIVENESS
Priority and Focus improves efficiency and effectiveness
Inclusion and Ownership are key benefits of a team based approach
Change management and communication planning are integral to success
Are you a high performance organization?
Are you using a disciplined framework for strategic management