Definition:
A Balanced Scorecard (BSC) is a tool for strategic management meant to match initiatives to long-term objectives of a company. It offers a disciplined method for evaluating performance from four main angles: financial, customer, internal procedures, and learning and development.
Key Aspects:
- Financial Perspective: Tracks profitability, cost management, and return on investment.
- Customer Perspective: Measures customer satisfaction and retention.
- Internal Processes: Evaluates operational efficiency and process improvements.
- Learning & Growth: Assesses employee training, knowledge, and innovation.
Example:
Using a Balanced Scorecard, a corporation introducing a new software product can monitor employee skill development, customer comments, revenue growth, and development efficiency.
Challenges & Solutions:
- Data Overload: Focusing on key performance indicators (KPIs) prevents analysis paralysis.
- Misalignment with Strategy: Regular reviews ensure BSC aligns with evolving business goals.
- Resistance to Change: Effective communication fosters adoption across teams.
Conclusion:
The Balanced Scorecard guarantees that projects support more general organisational goals and offers a complete approach to performance management.
