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Implementing the balanced scorecard.

Article Excerpt
[check] Traditionally, managers have used a series of indicators to measure how well their organisations are performing. These measures relate essentially to financial issues such as business ratios, productivity, unit costs, growth and profitability. While useful in themselves, they provide only a narrowly focused snapshot of how an organisation performed in the past and give little indication of likely future performance.

During the early 1980s, the rapidly changing business environment prompted managers to take a broader view of performance, and a range of other factors started to be taken into account, exemplified by the McKinsey 7-S model and popularised by In Search of Excellence by Peters and Waterman. These provide a broader assessment of corporate health in both the immediate and longer term. This checklist focuses on the Balanced Scorecard, which was developed by Robert Kaplan and David Norton in the early 1990s with the aim of providing a balanced view of an organisation's performance.

Definition

The Balanced Scorecard is defined as a strategic management and measurement system that links strategic objectives to comprehensive indicators. The key to the success of the system is that it must be a unified, integrated set of indicators that measure key activities and processes at the core of an organisation's operating environment.

It takes into account not only the traditional 'hard' financial measures but three additional...

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