The balanced scorecard is a strategic management framework introduced by Kaplan and Norton in 1992 that enhances organizational performance by integrating both financial and non-financial measures. Its purpose is to implement business strategies through performance measures linked to strategic goals, ensuring alignment across all levels of an organization. With widespread adoption among Fortune 1000 companies, the balanced scorecard aids in focusing on critical measures that drive strategy and improve overall effectiveness.

1. Balanced Scorecard
Group Members:
Nikita Rathode ( B-46 )
Tushar Sadhye ( B-47 )
Sonali Sakpal ( B-48 )

2. What is Balanced Scorecard?
• Balanced Scorecards tell you the knowledge, skills and systems
that your employees will need (learning and growth) to innovate
and build the right strategic capabilities and efficiencies
(internal processes) that deliver specific value to the market
(customer) which will eventually lead to higher shareholder
value (financial).

3. Where it started . . .
• Introduced in 1992, by Robert Kaplan and David Norton, the
Balanced Scorecard is the most commonly used framework for
ensuring that agencies execute their strategies.
• The research study was motivated by the inadequacy of
traditional performance management systems, which relied
almost exclusively on financial and business results.
• Today, about 70% of the Fortune 1,000 companies utilize the
Balanced Scorecard to help manage performance.
• Balanced Scorecards are used as the roadmap for creating the
“Strategic Management System”. And this drives overall
organizational performance!

4. Purpose of Balanced Scorecard:
A method of implementing a business strategy by translating it
into a set of performance measures derived from strategic goals
that allocate rewards to executives and managers based on their
success at meeting or exceeding the performance measures.

5. Reasons for the Need of a Balanced Scorecard
Focus on traditional financial accounting measures such as ROA, ROE, EPS
gives misleading signals to executives with regards to quality and
innovation.
Executive performance needs to be judged on success at meeting a mix of
both financial and non-financial measures to effectively operate a business
Some non-financial measures are drivers of financial outcome measures
which give managers more control to take corrective actions quickly.
(Example: controls in jet cockpit for pilot)
Too many measures, such as hundreds of possible cost accounting index
measures, can confuse and distract an executive from focusing on important
strategic priorities.
The balanced scorecard disciplines an executive to focus on several
important measures that drive the strategy.

6. Balanced Scorecard Perspectives
Financial: How do we
look to our
Shareholders?
Customer: How do our
Customers See Us?
Internal Business
Process: What should
we do that is
Excellent?
Employee and
Organization
Innovation and
Learning: Can we
continue to Improve
and Add Value?

7. The Balanced ScorecardFramework Is ReadilyAdaptedto Non-
Profit and Government Organizations
The Mission, rather than the financial / shareholder objectives, drives
the organization’s strategy
"If we succeed, how will
we look to our financial
donors?”
“To achieve our vision, how must
our people learn, communicate,
and work together?”
The Mission
“To satisfy our customers,
financial donors and mission,
what business processes must we
excel at?"
”To achieve our vision,
how must we look to our
customers?”

8. STRATEGY
HUMAN RESOURCES
BUSINESS UNITS EXECUTIVE TEAM
INFORMATION
TECHNOLOGY
BUDGETS AND CAPITAL
INVESTMENTS
The Balanced Scorecard process allows an organization to align
and focus all its resources on its strategy
Question:
Howcancomplexorganizationsachieve
resultslikethisinsuchshortperiodsof
time?
Answer:
Alignment!

9. How Do They Do It?
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
The Seven Ingredients of Highly Successful Balanced Scorecard
Programs

10. 1. Leadership From the Top
• Create the Climate for
Change
• Create a Common Focus for
Change Activities
• Rationalize and Align the
Organization
3. Unlock and Focus Hidden
Assets
• Reengineer Work Processes
• Create Knowledge Sharing
Networks
2.Make Strategy Everyone’s Job
• Comprehensive Communication
to Create Awareness
• Align Goals and Incentives
• Integrate Budgeting with
Strategic Planning
• Align Resources and Initiatives
4. Make Strategy a Continuous
Process
• Strategic Feedback That
Encourages Learning
• Executive Teams Manage
Strategic Themes
• Testing Hypotheses, Adapting,
and Learning
The Ingredients of Highly Successful Balanced
Scorecard Programs
STRATEGY
Formulate
NavigateCommunicate
Execute

13. Key Pitfalls toAvoid
• Middle management task force
• Not driven by senior executive team
• Only one or a few individuals
involved
• Too long a development process
(allowing the “best” to be the enemy
of the “good”)
• 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

14. What are the Key Benefits of using Balanced
Scorecards?
Better Strategic Planning
Improved Strategy Communication & Execution
Better Management Information
Improved Performance Reporting
Better Strategic Alignment
Better Organizational Alignment