The Balanced Scorecard Presented by Ben Kraus and Cornell Woodson Bridging the gap between short-term budgeting and long-term strategy Robert Kaplan and David Norton’s
The Balanced Scorecard’s Emergence <ul><li>Robert Kaplan and David Norton first publicized the balanced scorecard in a series of journal articles and published this concept in their book, The Balanced Scorecard . </li></ul><ul><li>Since then it has evolved to become more workable in practice, focusing more on design processes. </li></ul>
What is the Balanced Scorecard (BSC)? <ul><li>The scorecard emerged in response to organizations’ gap between short-term financial activities and long-term strategy. </li></ul><ul><li>It is not a replacement for budgeting but merely a complement in the sense allows businesses to set performance benchmarks in non-financial areas. </li></ul>
What is the Balanced Scorecard? (cont’d) <ul><li>Performance standards are specifically applied to four perspectives: customer relations, finance, internal processes and learning and growth. </li></ul><ul><li>To ensure that both short-term and long-term goals are correlated, the scorecard relies on four processes: translating the vision, communicating and linking, business planning and feedback and learning. </li></ul>
How is the Balanced Scorecard Used? <ul><li>Translating the vision: helping all employees understand how their day-to-day work contributes to long-term goals. </li></ul><ul><li>Communicating and linking: disseminating long-term goals both up and down an organizational hierarchy, ensuring that both departmental and individuals objectives are in alignment. </li></ul>
How is the Balanced Scorecard Used? (cont’d) <ul><li>Business planning: taking long-term strategy and using it as the basis for how resources and capital are allocated. </li></ul><ul><li>Feedback and learning: the scorecard enables strategic and real-time learning because it measures daily performance and spending in the context of overarching goals, allowing organizations to make necessary changes. </li></ul>
Who Else Uses the BSC? Mark Coldren, Associate Vice President of Human Resources at Ithaca College Measure his departments effectiveness at reaching organizational goals and value to the organization. Add a few more staff members to the human resources department. Measure the effectiveness of a sales training program with a new product launch, which is what we might also use this for. Mr. Coldren suggest strongly that we enter into a conversation with the leadership of the organization about what they would like to see if the organization were to reach its optimal performance.