When robert kaplan and david norton first introduced the. If youre interested in the academic side of the balanced scorecard, dont miss this resource. Download for offline reading, highlight, bookmark or take notes while you read the balanced scorecard. Translating strategy into action ebook written by robert s.
The book explains that we are now in the information age and the old accounting from the industrial age doesnt properly reflect or measure a company. Overcome poor communications and bureaucracy for new actions. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve internal and external communications, and. David norton and i introduced the balanced scorecard in a 1992 harvard.
Read articles about balanced scorecard hbs working knowledge. In addition, it can help provide information on the chosen strategy more. The key problem that kaplan and norton identified in the business of the day was that many companies tended to manage their businesses based solely on financial measures. Balanced scorecard is a strategy performance management tool a semistandard structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions the phrase balanced scorecard primarily refers to a performance management report used by a management team, and typically. The balanced scorecard was developed by two men, robert kaplan, an accounting professor at harvard university, and david norton, a consul tant also from the boston area. Kaplan accounting, harvard and norton, president of renaissance solutions inc.
The four perspectives of the scorecard financial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those outcomes. Balanced scorecard as a framework links this strategy performance gap. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve. The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 using the balanced scorecard as a strategic management system. The balanced scorecard translates a companys vision and str. Develop your vision, mission, and guiding principles. In addition, he shows how to become a strategyfocused organization by imbedding the balanced scorecard into critical organizational processes. They realize that no single measure can protives understand that their organizations measure vide a clear performance target or focus attention on. In the first part, kaplan and norton provide the theoretical foundations for the balanced scorecard. Norton, authors of the balanced scorecard, a revolutionary performance measurement system that allows organizations to quantify intangible assets such as people, information, and customer relationships. The balanced scorecard requires specific measures of what customers getin terms of time, quality, performance and service, and cost. More than just a measurement system, the balanced scorecard is a management system that can channel the energies, abilities, and specific knowledge held by people throughout the organization toward achieving longterm strategic goals.
How balanced scorecard companies thrive in the new business environment rs kaplan, dp norton harvard business school press, 2000. Aug 27, 2017 the balanced scorecard summary robert s. The balanced scorecard was originally developed by dr. The balanced scorecard measures that drive performance. In 1990 kaplan and norton led a research study of a dozen companies exploring new methods of performance mea surement. The balanced scorecard is a framework to implement and manage strategy by linking a vision and mission to strategic priorities, objectives, measures, and initiatives.
Conceptual foundations of the balanced scorecard 3. Their framework measures organizational performance using both lagging indicators of financial performance and customer outcomes, and leading indicators of internal processes, skills, and culture. Nortons book the balanced scorecard shows that the balanced scorecard is a new business management system which links the achievement of longterm strategic goals with day to day. But often the efforts of individual units are not coordinated, resulting in conflicts, lost opportunities, and diminished performance robert s. The bsc method of kaplan and norton is a strategic approach and performance management system that enables organizations to translate a companys vision and strategy into implementation, working from 4 perspectives. Using the balanced scorecard as a strategic management. David norton as a framework for measuring organizational performance using a more balanced set of performance measures. Its this focus on both highlevel strategy and lowlevel measures that sets the balanced scorecard apart from other performance management methodologies. Kaplans most popular book is the balanced scorecard. Kaplan and nortons the strategyfocused organization. It integrates financial measures with other objectives and key performance indicators related to customers, internal business processes, and capacity. Traditionally companies used only shortterm financial performance as the measure of success. Building your balanced scorecard strategy requires that you take these fundamental steps so that it will be strong and deliver the benefits you want and need for your business to thrive and grow. Strategic objectives are considered the dna of the bsc system rolm recognises that in any strategic planning process, the way to bring a strategy alive is to create meaningful strategic objectives.
The four perspectives of the scorecardfinancial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those outcomes. This collection highlights the most important ideas and concepts from robert s. Kaplan, a harvard business school professor of accounting, and norton, president of renaissance solutions, make a key contribution by describing and illustrating the balanced scorecard, a multidimensional approach to measuring corporate performance that incorporates both financial and nonfinancial factors. If you have not yet read strategy maps, the balanced scorecard and the strategyfocused organization, you should begin with those books before reading this one. The four perspectives of the scorecardfinancial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those outcomes, and between hard. The four perspectives of the scorecardfinancial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those outcomes, and. Use features like bookmarks, note taking and highlighting while reading balanced scorecard success.
In his opening speech at the global conference on reinventing government, vice president al gore stated that if we want our government to be accountable for every taxpayers dime, then we need a workforce that will be held accountable for real results. Using the balanced scorecard as a strategic management system by robert s. Using the balanced scorecard as a strategic management system. Since then, they have written numerous books together focusing on aspects of. Norton and kaplans other book, strategy map deals with the development of an executable strategy while this book provides the framework for monitoring and controlling of the performance of strategy. As the title of kaplan and nortons second book highlights, even by 2000 the focus of attention among thoughtleaders was moving from the design of balanced scorecards themselves, towards the use of balanced scorecard as a focal point within a more comprehensive strategic management system. Norton argue that the responsibility for this critical alignment lies with corporate headquarters. The balanced scorecard was developed in the early 1990s by two guys at the harvard business school. The four perspectives of the scorecard financial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those outcomes, and between hard. The balanced scorecard is a strategic management performance methodology used to ensure that there is a balance between four major activities within a business or organisation.
Includes index measurement and management in the information age why does business need a balanced scorecard. Most organizations consist of multiple business and support units, each populated by highly trained, experienced executives. The balanced scorecard revolutionized conventional thinking about performance metrics. Balanced scorecard step by step guides readers through the processes required for a successful balanced scorecard project. The balanced scorecard translates a companys vision and strategy into a coherent set of performance measures.
The balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past. In his book, the institute way, howard rolm describes the balanced scorecard system and sums up strategic objectives by saying. Norton is a calltoaction book consisting of several quantitative performance measures. The name balanced scorecard comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more balanced view of performance. Kaplan and norton demonstrate how senior executives in industries such as banking, oil, insurance. Also included are strategy maps, which enables companies to describe the links between.
Balanced scorecard basics balanced scorecard institute. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. Norton, david p here is the book by the recognized architects of the balanced scorecard. Measuring business strategy financial perspective customer perspective internalbusinessprocess perspective learning and growth perspective linking balanced scorecard measures to your strategy structure and strategy pt.
The book provides an excellent complement to the two kaplan. What follows, provides guidance and advice on the development and implementation of a balanced scorecard for those organisations considering the introduction of a. Translating strategy into action is considered to be a major contribution to the development of performance management, as their work has changed the way performance is measured. The perspectives look at the financial situation, customer interaction, internal business processes and the organisational capacity required to. The balanced scorecardmeasures that drive performance.
The balanced scorecardmeasures that drive performance robert s. Kaplan and norton demonstrate how senior executives in industries such as banking, oil, insurance, and retailing are using the balanced scorecard both to. The balanced scorecard here is the book by the recognized architects of the balanced scorecard that shows how managers can use this revolutionary tool to mobilize their people to fulfill the companys mission. Norton, authors of the balanced scorecard, a revolutionary performance measurement system that allows organizations to quantify intangible assets such as people, information, and.
In this book, the authors apply their revolutionary balanced scorecard management. In the almost 20 years that have passed since its publishing, the balanced scorecard system has. When robert kaplan and david norton first introduced the concept. Subsequent writing on balanced scorecard by kaplan. How balanced scorecard companies thrive in the new business environment, published in 2001, introduced the strategy map to show the. It is very good, with the one weakness that it makes performance measurement look deceptively simple. Nortons book the balanced scorecard shows that the balanced scorecard is a new business management system which links the achievement of longterm strategic goals with day to day operational. Much more than a measurement exercise, the balanced scorecard is a management system that.
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