To embark on the Balanced Scorecard path an organization first must know and understand the following: But very quickly it was realized that the perspective headings chosen only worked for specific organisations small to medium-sized firms in North America - the target market of the Harvard Business Reviewand during the mid to late s papers began to be published arguing that other sets of headings would make more sense for specific organization types,  and that some organisations would benefit from using more or less than four headings.
Today, the lower-most perspective has been renamed to Organisational Capacity. One of the big challenges faced in the design of Balanced Scorecard-based performance management systems is deciding what activities and outcomes to monitor.
Aahh… life was simple back then. They were not always successful, for instance driving down costs could sometimes be at the expense of quality, staff lost expertise or even losing some of your customer base. We went to work, did our job well or otherwise and went home - day in and day out.
We did not have to worry about targets, annual assessments, metric-driven incentives, etc. Links between the strategy map and strategy development[ edit ] The strategy map is a device that promotes three stages of conversation during the strategy development, implementation and learning process First to capture a strategy from a management team.
By providing a simple visual representation of the strategic objectives to be focused on, along with additional visual cues in the form of the perspectives and causal arrows, the strategy map has been found useful in enabling discussion within a management team about what objectives to choose, and subsequently to support discussion of the actual performance achieved.
In other words, Learning and Growth drive Internal Process change which impacts Customer Satisfaction which in turn improves Profitability. Norton  proposed a simple design method for choosing the content of the Balanced Scorecard based on answers to four generic questions about the strategy to be pursued by the organization.
Design of a Balanced Scorecard became a process of selecting a small number of objectives in each perspective, and then choosing measures and targets to inform on progress against this objective.
Like eager younger siblings we trailed behind them on the sometimes thorny path to enlightenment. Bosses everywhere cast envious eyes towards our transatlantic cousins whose ambition was to increase production and efficiency year-by-year.
To promote discussion amongst that team on the strategy, so they all leave the room telling the same story of their strategy. A Balanced Scorecard approach is to take a holistic view of an organization and co-ordinate MDIs so that efficiencies are experienced by all departments and in a joined-up fashion.
Kaplan and David P. Then there came light. Early Metric-Driven Incentives - MDIs - were generally focused on the financial aspects of an organization by either claiming to increase profit margins or reduce costs. In the early part of the century, it was recognized that the perspective Learning and Growth was lacking significant investment areas, that of infrastructure and IT.
Over the years many have suggested that it can be used as, in part, a strategy development tool. A definition often quoted is:balanced scorecard kaplan and norton's organizational pious hopes of a company's vision/mission statement into the practicalities of managing the business better at every level.
and Timely) - you cannot improve on what you can't measure!
Metrics must also be aligned with the company's strategic plan. A Balanced Scorecard approach. maps, pioneered by Balanced Scorecard founders Robert Kaplan and David Norton, allow organisations to describe and communicate Our Game Plan Strategy Map Translate the Strategy Balanced Scorecard Measure and Focus Targets and Initiatives executing the right business processes to achieve.
Robert S. Kaplan and David P. Norton, The Execution Premium: Linking Strategy to Operations for Competitive Advantage, Harvard Business School Press, Plan Operations Process Improvement.
1 Nolan, Norton & Company. Kaplan & Norton’s fort Interview by Alistair Craven Robert S. Kaplan is Baker Foundation Professor at the Harvard Business School. Strategy Map Templates Strategy Map – Classic Kaplan/Norton INTRAFOCUS Productivity Strategy Growth StrategyFinancial Long-TermPerspective Shareholder Value Improve Cost Increase Asset Expand Revenue Enhance Structure Utilisation Opportunities Customer ValueCustomer Customer Value PropositionPerspective Price.
A Strategy Map is a diagram that describes how a company or organisation can create value by linking strategic objectives in a cause and effect relationship. align business activities to a vision and strategy of an organisation.
Productivity Strategy. Operations Management Processes. Supply.