The Balanced Scorecard

Presented by Ben Kraus and Cornell Woodson

Bridging the gap between short-term budgeting and long-term strategy

Robert Kaplan and David Norton’s

The Balanced Scorecard’s Emergence

Robert Kaplan and David Norton first publicized the balanced scorecard in a series of journal articles and published this concept in their book, The Balanced Scorecard.

Since then it has evolved to become more workable in practice, focusing more on design processes.

What is the Balanced Scorecard (BSC)?

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.

What is the Balanced Scorecard? (cont’d) 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.

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.

How is the Balanced Scorecard Used? (cont’d)

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.

The Perception of the BSC

Who Else Uses the BSC?Mark Coldren, Associate Vice President of Human Resources at Ithaca College

Measure his departments effectiveness at reaching organizational goals and value to the organization.

Add a few more staff members to the human resources department.

Measure the effectiveness of a sales training program with a new product launch, which is what we might also use this for.

Mr. Coldren suggest strongly that we enter into a conversation with the leadership of the organization about what they would like to see if the organization were to reach its optimal performance.

Commercial Industry: Regional Airline

Government Organizations: Defense Financial Accounting Service

Non-profit Organization: Oak Knoll Academy

Renewergy Power Systems

Questions