The Balanced Scorecard, created by Robert Kaplan and David Norton, is an important tool because what gets measured drives the performance of an organization. The article appeared in Harvard Business Review HBR JANUARY–FEBRUARY 1992.
Balanced Scorecard has four perspectives:
1) Financial Perspective: This prospective evaluates the profitability of the strategy.
2) Customer Perspective: This perspective identifies the targeted customer and market segments and measures the company’s success.
3) Business Processes Prospective: This perspective refers to internal business processes that creates values for customers and increases shareholder value.
4) Learning and Growth Prospective: This prospective identifies the capabilities with which the company must excel, to attain superior internal processes which create value for customers and shareholders.
http://balancedscorecard.org/Resources/About-the-Balanced-Scorecard
To add…
The balanced scorecard suggests that we view the organization from four perspectives, and develop metrics, collect data and analyze it relative to each of these perspectives:
The Learning & Growth Perspective
This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement.
The Business Process Perspective
This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission).
The Customer Perspective
Customer focus and customer satisfaction: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.
The Financial Perspective
Tests the profitability of the strategy using the most business objective measures in the scorecard. Measures include: ROI, RI, ROA etc.
A useful template:
