The "Balanced Scorecard" is a strategic management approach developed in the early 1990s by Dr Robert Kaplan of Harvard Business School, and Dr David Norton.
Drs Kaplan and Norton describe the approach - "The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
The balanced scorecard identifies four perspectives from which to view an organisation. These are:
- The Learning and Growth Perspective
- The Business Process Perspective
- The Customer Perspective
- The Financial Perspective
© Paul Arveson, 1998
Further information on the Balanced Scorecard can be found at The Balanced Scorecard Institute and at the Palladium Group (or join balanced scorecard online).
Liverpool John Moores University, in collaboration with Oracle, is developing an "Executive Dashboard", a strategic management tool based on the Balanced Scorecard approach. John Townsend, of the University reported in a paper to EUNIS 2005 that "The Balanced Scorecard approach and the associated Oracle technology provide a very powerful tool for managing change - and force you to ask hard questions with inevitable consequences: "Where are we going?...How will we know when we get there?... How will we get there?... Are we there yet? ... How can we tell where we are now?... The data must be accurate and meaningful... Who gets the data?... Change management... means changes in the way we work... but this doesn't happen of its own accord and there is a major communication and marketing effort to go with any such initiative... This change is not a foregone conclusion... What about people?"
