What is a Balanced Scorecard?

The Balanced Scorecard is an extremely effective business management tool, allowing you immediate access to information about how your business is performing.

The Balanced Scorecard approach can be applied to businesses and organisations of all sizes, structures and in different sectors and industries. It offers a dashboard view of up to 25 metrics which measure your business’ performance and can be crucial in helping you make the right business decisions.

What is the balanced scorecard approach?

Most businesses use their accounts as means of monitoring success – and while there are obviously reasons why, this type of performance measurement has some very obvious flaws.

The main issue is that finances show how you have performed – not how you are currently performing. As every business owner, CEO or operations director knows, there are times that you need to make decisions to act – and accounts will only ever show you how you did last month, not how you’re doing at the time the decision has to be made.

The other issue is that accounts don’t show where issues might be arising from – they will let you know there’s a problem, but only when it’s too late to stop it from having an impact.

So Balanced Scorecard breaks your success, growth and performance down into 25 different metrics, expressly for your business or organisation, so that you can see what needs to be focused on and where there are bottlenecks or problems. It also gives you a crystal clear insight into how your business is performing, not last month or quarter, but right NOW.

Who uses Balanced Scorecard?

The approach was developed in the early 1990s and championed by the Harvard Business Review in the US, whose readership was primarily built up on medium sized businesses. Its popularity spread across the US, the English speaking world and beyond – and it is still seen as one of the most efficient and comprehensive business management tools available.

Because the approach involves creating a scorecard for each individual business using it, Balanced Scorecard can be used for every type of business or organisation – from industrial manufacturers to public sector bodies, small start-ups to multi-national corporations.

Want to find out more? Call or email Inspired Change with you questions – or read more about the Balanced Scorecard in our Info Centre.