Balance Score Card
Balance Score Card (BSC) is a device used in strategic planning and management system. BSC is used extensively by businesses and industries to monitor organizational performance as against organization’s strategic goals. The first balanced scorecard was created by Art Schneiderman in 1987 which was popularised by Drs. Robert Kaplan (Harvard Business School) and David Norton. BSC is used as a performance measurement framework which adds strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. Balance Score Card 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 Balance Score Card transforms strategic planning from an academic exercise into the nerve centre of an enterprise.
The organizational Balance Score Card encompasses the organizational mission, vision, core values, critical success factors, objectives, performance measures, targets and improvement actions. This corporate scorecard is communicated and translated into all business unit balanced scorecards, team balanced scorecards and the performance plans of individual employees and their personal balanced scorecards. In connection with this policy deployment, each employee is stimulated to contribute to the shared organizational strategy.
Balance Score Card views organizations with four perspective:
The Learning & Growth Perspective
The Business Process Perspective
The Customer Perspective
The Financial Perspective
Deploying Balance Score Card
Kaplan and Norton provide an outline of how to deploy the Balance Score Card. Basically, a core team is formed to develop the detailed plan and deploy it. To reduce cost and risk, it is usually wise to initially deploy pilot projects in a limited part of the organization. However, all deployment efforts should be initiated at the headquarters level. Strategic goals have to come from the top. Also, some strategic initiatives to reach these goals should be identified there. Some metrics should be standardized at the top level in order that measurements from different departments will be comparable for benchmarking. At the departmental or pilot project level, specific goals, initiatives, desired outcomes, metrics, targets, and annual milestones can be defined.
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