Balanced Scorecard Functional Standards

The Balanced Scorecard was developed to measure both current operating performance and the drivers of future performance. Many managers believe they are using a Balanced Scorecard when they supplement traditional financial measures with generic, non-financial measures about customers, processes, and employees. But the best Balanced Scorecard Functional Standards Release 1.0a 3 Balanced Scorecards are more than ad hoc collections of financial and non-financial measures. The objectives and measures on a Balanced Scorecard should be derived from the business unit's strategy. A scorecard should contain outcome measures and the performance drivers of those outcomes, linked together in cause-and-effect relationships. Balanced Scorecard: Translating Strategy into Action, by Robert S. Kaplan and David P. Norton (Harvard Business School Press, 1996). Abstract: The Balanced Scorecard translates a company's vision and strategy into a coherent set of performance measures. The four perspectives of the scorecard—financial measures, customer knowledge, internal business processes, and learning and growth--offer a balance between short-term and long-term objectives, between outcomes desired and performance drivers of those outcomes, and between hard objective measures and softer, more subjective measures. In the first part, Kaplan and Norton provide the theoretical foundations for the Balanced Scorecard; in the second part, they describe the steps organizations must take to build their own Scorecards; and, finally, they discuss how the Balanced Scorecard can be used as a driver of change. "Using the Balanced Scorecard as a Strategic Management System" in Harvard Business Review, by Robert S. Kaplan and David P. Norton, January 1996. The Balanced Scorecard translates a company's vision and strategy into a coherent set of performance measures. The four perspectives of the scorecard—financial measures, customer knowledge, internal business processes, and learning and growth--offer a balance between short-term and long-term objectives, between outcomes desired and performance drivers of those outcomes, and between hard objective measures and softer, more subjective measures. In the first part, Kaplan and Norton provide the theoretical foundations for the Balanced Scorecard; in the second part, they describe the steps organizations must take to build their own Scorecards; and, finally, they discuss how the Balanced Scorecard can be used as a driver of change. "Using the Balanced Scorecard as a Strategic Management System" in Harvard Business Review, by Robert S. Kaplan and David P. Norton, January 1996. Abstract: As companies transform themselves to compete in the world of information, their ability to exploit intangible assets is becoming more decisive than their ability to manage physical assets. Several years ago, Robert S. Kaplan and David P. Norton introduced the balanced scorecard, which enabled companies to track financial results while monitoring progress in building the capabilities they would need for growth. Recently, some companies have gone further and discovered the scorecard's value as the cornerstone of a new strategic management system. Traditional management systems rely on financial measures, which bear little relation to progress in achieving longterm strategic objectives. The scorecard introduces four new processes that help companies connect long-term objectives with short-term actions. "Putting the Balanced Scorecard to Work" in Harvard Business Review by Robert S. Kaplan and David P. Norton, September 1993. As companies transform themselves to compete in the world of information, their ability to exploit intangible assets is becoming more decisive than their ability to manage physical assets. Several years ago, Robert S. Kaplan and David P. Norton introduced the balanced scorecard, which enabled companies to track financial results while monitoring progress in building the capabilities they would need for growth. Recently, some companies have gone further and discovered the scorecard's value as the cornerstone of a new strategic management system. Traditional management systems rely on financial measures, which bear little relation to progress in achieving longterm strategic objectives. The scorecard introduces four new processes that help companies connect long-term objectives with short-term actions. "Putting the Balanced Scorecard to Work" in Harvard Business Review by Robert S. Kaplan and David P. Norton, September 1993. Abstract: In an earlier, groundbreaking article, "Balanced Scorecard – Measures That Drive Performance", the authors proposed a new measurement system that provided managers with a comprehensive framework to translate a company's strategic objectives into a coherent set of performance measures. Now the authors show how several companies are putting the balanced scorecard to work. Effective measurement, the authors point out, must be an integral part of the management process. Much more than a measurement exercise, the balanced scorecard is a management system that can motivate breakthrough improvements in such critical areas as product, process, customer, and market development. Several examples—Rockwater, Apple Computer, and Advanced Micro Devices—illustrate how the scorecard combines measurement and management in different companies. From the experiences of these companies and others, the authors have found that the balanced scorecard is most successful when it is used to drive the process of change. "The Balanced Scorecard: Measures That Drive Performance" in Harvard Business Review by Robert S. Kaplan and David P. Norton, January 1992. Abstract: During a year-long research project, the authors developed a "balanced scorecard" performance measurement system that allows executives to view a company from several perspectives simultaneously. The scorecard includes financial measures that reveal the results of actions already taken, as well as three sets of operational measures that show customer satisfaction, internal processes, and the organization's ability to learn and improve. Creating a balanced scorecard requires translating a company's strategy and mission statement into specific goals and measures. Managers then track those measures as they work toward their goals. In an earlier, groundbreaking article, "Balanced Scorecard – Measures That Drive Performance", the authors proposed a new measurement system that provided managers with a comprehensive framework to translate a company's strategic objectives into a coherent set of performance measures. Now the authors show how several companies are putting the balanced scorecard to work. Effective measurement, the authors point out, must be an integral part of the management process. Much more than a measurement exercise, the balanced scorecard is a management system that can motivate breakthrough improvements in such critical areas as product, process, customer, and market development. Several examples—Rockwater, Apple Computer, and Advanced Micro Devices—illustrate how the scorecard combines measurement and management in different companies. From the experiences of these companies and others, the authors have found that the balanced scorecard is most successful when it is used to drive the process of change. "The Balanced Scorecard: Measures That Drive Performance" in Harvard Business Review by Robert S. Kaplan and David P. Norton, January 1992. Abstract: During a year-long research project, the authors developed a "balanced scorecard" performance measurement system that allows executives to view a company from several perspectives simultaneously. The scorecard includes financial measures that reveal the results of actions already taken, as well as three sets of operational measures that show customer satisfaction, internal processes, and the organization's ability to learn and improve. Creating a balanced scorecard requires translating a company's strategy and mission statement into specific goals and measures. Managers then track those measures as they work toward their goals. Balanced Scorecard Functional Standards Release 1.0a