The Balanced Scorecard is a strategic planning and management system used to align business activities to the organization's vision and strategy, improve internal and external communications, and monitor performance against strategic goals. It balances financial and non-financial metrics in four key areas: financial, customer, internal business processes, and learning and growth. Implementing a Balanced Scorecard requires executive sponsorship, involvement of leaders and employees in development, choosing a champion, and viewing it as a continual process rather than a short-term project.

1. Balanced score card

2. Definition
The Balanced Scorecard is a management tool that
provides stakeholders with a comprehensive measure of
how the organization is progressing towards the
achievement of its strategic goals.

3. The Balanced Scorecard
What is it?
 Balances financial and non-financial measures
 Balances short and long-term measures
 Balances performance drivers with outcome measures
 Should contain just enough data to give a complete picture of
organizational performance
 Leads to strategic focus and organizational alignment.

4. • Four key Business Perspectives
• Internal & Business process of Organization
• Short Run & Long Run

5. Why do it?
• To achieve strategic objectives.
• To provide quality with fewer resources.
• To eliminate non-value added efforts.
• To align customer priorities and expectations with the customer.
• To track progress.
• To evaluate process changes.
• To continually improve.
• To increase accountability.

6. The Strategy Focused
Organization
 Mission – What we do
 Vision – What we aspire to be
 Strategies – How we accomplish our goals
 Measures – Indicators of our progress

7. The Strategy Focused
Organization
 The Five Principles
1. Translate the strategy to operational terms.
2. Align the organization to the strategy.
3. Make strategy everyone’s job.
4. Make strategy a continual process.
5. Mobilize change through executive leadership

8. Deming’s 14 Points
1. Constancy of Purpose
2. Adopt the new philosophy
3. Cease dependence on mass
inspection
4. Cease doing business on price tag
alone
5. Continual improvement of process
6. Institute training on the job
7. Institute leadership
8. Drive out fear
9. Break down barriers between
departments
10. Eliminate slogans, exhortations,
and targets
11. Eliminate numerical quotas
12. Allow pride in workmanship
13. Institute a program of self-
improvement
14. Do it

9. Advantages Of BSC
• It is used to align the business activities to vision and strategy
• It improves Internal & External communications
• It is used to monitor organizations performance
• It provides management with comprehensive picture of
operations
• It provides strategic feed back
• It improves decisions & better solutions

10. Disadvantages of bsc
• It Doesn’t provide Recommendations
• It is not fully Efficient
• It takes time
• It is High Implementation of cost
• It can show low profit

11. Why are companies Adopting BSC?
• Change
• Growth
• Implementation

12. Vision & Strategy
Financial Perspective
Learning & Growth
Perspective
Customer
Perspective Internal Process
Perspective

13. Four key Business Perspectives
 Financial
What must we do to create sustainable economic value?
 Internal Business Process
To satisfy our stakeholders, what must be our levels of productivity, efficiency,
and quality?
 Learning and Growth
How does our employee performance management system, including feedback
to employees, support high performance?
 Customer
What do our customers require from us and how are we doing according to
those requirements?

14. Balanced Scorecard Measurements

15. Key Implementation Success Factors
 Obtaining executive sponsorship and commitment
 Involving a broad base of leaders, managers and employees in
scorecard development
 Choose the right Scorecard Champion
 Beginning interactive (two-way) communication first
 Viewing the scorecard as a long-term journey rather than a short-
term project
 Getting outside help if needed

16. How Do They Do It?
The Seven Ingredients of Highly Successful Balanced Scorecard
Programs
1. A Process to Mobilize the Organization and Lead Ongoing Change
2. Scorecards That Describe the Strategy
3. Linking Scorecard to Create an Organization Alignment
4. Continuous Communication to Empower the Workforce
5. Aligning Personal Goals, Incentives, and Competencies With the Strategy
6. Aligning Resources, Budgets and Initiatives With the Strategy
7. A Feedback Process That Encourages Learning and Experience Sharing

17. The Ingredients of Highly Successful Balanced Scorecard
Programs
STRATEGY
Formulate
NavigateCommunicate
Execute
1.Leadership From
the Top
2.Make Strategy
Everyone’s Job
3. Unlock and Focus
Hidden Assets
4. Make Strategy a
Continuous Process

18. Not all Environments are Appropriate for a Balanced Scorecard
Balanced Scorecard must be driven from the top
A clear sense of purpose is required to
The dynamics of the senior executive team will
determine whether the Balanced Scorecard becomes a
strategic management system

19. THE BALANCED SCORECARD MANAGEMENT SYSTEM
 Implement a framework to align and focus the organization from
top to bottom on its strategy
 Identify the related key change initiatives required to realize the
strategy and mobilize the organization
 Create feedback processes at all levels to evaluate progress against
strategy, monitor and manage issues and priorities, and measure
performance and contribution to the business.

20. Key Pitfalls to Avoid
Middle management task force
Not driven by senior executive team
Only one or a few individuals involved
Too long a development process
Delay introduction because of missing
measurements
Static not dynamic process
Treating the BSC as an EIS
Measurement to control; not to
communicate
Management dictating actions vs.
employee improvisation to achieve
desired outcomes
For management only, not shared with
all employees
Process Philosophy