A new approach to strategic management was developed in the early 1990′s by Drs. Robert Kaplan (Harvard Business School) and David Norton (Balanced Scorecard Collaborative). They named this system the ‘balanced scorecard’. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to ‘balance’ the financial perspective.
The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Balanced Scorecard (BSC) – A tool that translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system.