The document defines the balanced scorecard as a strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It consists of four perspectives - financial, customer, internal business processes, and learning and growth - and is used to translate strategic objectives into tangible measures, communicate strategy to employees, link strategic objectives to short and long term activities, collect feedback to drive continuous improvement.

2. Definition
What is the Balanced Scorecard?
 The scorecard emerged in response to organizations’ gap between short-term financial activities
and long-term strategy.
 It is not a replacement for budgeting but merely a complement in the sense allows businesses to
set performance benchmarks in non-financial areas.
 Performance standards are specifically applied to four perspectives: customer relations,
finance, internal processes and learning and growth.
 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.
 provides stakeholders with a comprehensive measure of how the organization is progressing
towards the achievement of its strategic goals.

3. The Goal of Alignment
Poor Organizational Alignment
Vision &
Goals
Good Organizational Alignment
Vision &
Goals

4. Objectives
 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.

5. Uses
How is the Balanced Scorecard used?
 Translating the vision: helping all employees understand how their day-to-day work
contributes to long-term goals.
 Communicating and linking: disseminating long-term goals both up and down an
organizational hierarchy, ensuring that both departmental and individuals objectives are in
alignment.
 Business planning: taking long-term strategy and using it as the basis for how resources and
capital are allocated.
 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.

6. Framework
 Measurement is the
language that gives clarity
to vague concepts.
 Measurement is used to
communicate, not to
control.
 Building the scorecard
develops consensus and
teamwork throughout the
organization.
"If we succeed, how will
we look to our
shareholders?”
The Vision
Financial Perspective
"To achieve my vision,
how must I look to my
customers?”
Customer Perspective
"To satisfy my customer,
at which processes must
I excel?”
Internal Perspective
"To achieve my vision, how
must my organization learn
and improve?”
Organization Learning

7. Issues and Solutions
The Balanced Scorecard addresses these issues:
Problems
1. The Vision Barrier
2. The People Barrier
Solutions
1. Translating the Vision
o Identify strategic objectives, linkages,
measures, targets and initiatives
2. Linking the Organization
o Communicate and align with the strategy
o Define individual contribution to the
strategy
o Link to performance management and
compensation

8. Issues and Solutions
Continuation,
Problems
3. The Operational Barrier
4. The Management Barrier
Solutions
3. Aligning Resources with the Strategy
o Prioritize strategic initiatives
o Link planning and budgeting to the
strategy
4. Feedback and Learning
o Focus management meetings on strategic
priorities
o Provide measurement feedback
o Test strategic hypotheses

9. Strategic Performance Management System
Strategic Direction
Create Environment For
Change
Communicate Strategies
Define Objectives
Implement BSC
Balanced Scorecard
Measure Performance
Improve Processes
Evaluate and Adjust
Continuous Improvement
Redefine InitiativesLinking it all together…

10. The Balance Scorecard
LEARNING & GROWTH
To achieve our goals, how
must we learn, communicate
and grow?
INTERNAL
To satisfy our customers and
stakeholders, in which business
processes must we excel?
FINANCIAL/REGULATORY
To satisfy our constituents,
what financial & regulatory
objectives must
we accomplish?
CUSTOMER
To achieve our vision,
what customer needs must
we serve?

11. Learning and Growth
To achieve our goals and accomplish core
activities, how must we learn,
communicate and work together?
Possible Performance Measures:
o Employee Satisfaction
o Retention and Turnover
o Training Hours and Resources
o Technology Investment

12. Internal Perspective
To satisfy our customers, in which business
processes must we excel?
Possible Performance Measures:
o Cycle Time
o Completion Rate
o Workload and Employee Utilization
o Transactions per employee
o Errors or Rework

13. Customer Perspective
To achieve our vision, what customer
needs must we serve?
Possible Performance Measures:
o Customer Satisfaction (Average)
o Satisfaction Gap Analysis (Satisfaction
vs. Level of Importance)
o Satisfaction Distribution (% of each area
scored)

14. Financial / Regulatory Perspective
To satisfy our constituents, what financial
and regulatory objectives must we
accomplish?
Possible Performance Measures:
o Cost / Unit
o Unfunded Requirements or Projects
o Cost of Service
o Budget Projections and Targets

15. Measurement
Why Measure?
 To determine how effectively and efficiently the process or
service satisfies the customer.
 To identify improvement opportunities.
 To make decisions based on FACT and DATA
Measurement Should:
 Translate customer expectations into goals.
 Evaluate the quality of processes.
 Track our improvement.
 Focus our efforts on our customers.
 Support our strategies.

16. Targets
“If you don’t know where you’re going, you’re probably not
gonna get there.” -- Forrest Gump
 Targets need to be set for all measures
 Should have a “solid basis”
 Give personnel something for which to aim
 If achieved will transform the organization
 Careful not to develop measures/targets in a fragmented
approach:
i.e. Asking people to increase customer satisfaction
has to be backed up with the knowledge, tools, and means to
achieve that target.

17. Responsibilities
The Leadership Team:
 Develops the division’s vision, strategy and goals
 Develops organizational objectives and targets
 Provides leadership, endorsement and vision for the
project
 Clears barriers to scorecard progress
The Core Team:
 Drafts the strategy map and scorecard
 Works with employees to develop measures supporting
strategic objectives
 Works with the Leadership Team to plan and implement
the Balanced Scorecard in the FAS Division

18. Notes
 The Balance Scorecard is a Feedback
Tool
 It is not a Strategy or Quality program
 Think of it as a “Dashboard”
 Should be done in addition to the other
Quality Improvement Initiatives:
o Six-Sigma
o Lean
o Design for Six-Sigma

19. Strategy is about Choices
There are several ways or strategies to cross the river
o Build a boat
o Build a raft
o Build a helicopter
o Build a bridge
o Dig a tunnel
Each can be successful in achieving the goal.

20. Thank You!