1. THE BALANCED SCORECARD
Dimensions and Perspectives By
David Iornem, PhD

2. What is a Balanced Scorecard?
BSC is a measurement tool
It allows the organization to assess progress in implementing strategy
It allows the organization to benchmark its
progress against great practices outside and
inside the organization, and over time
It provides a diagnostic framework for tracking relationships and impact among strategies

3. What is a Balanced Scorecard?
BSC is a communication tool
It allows an organization to articulate its chain of value creation within the organization and to the world at large.
• It provides a platform for planning and
communication of planning activities

4. What is a Balanced Scorecard?
BSC is a strategic
management tool
• It allows an organization to see all of the drivers
of organizational value and performance in a
holistic conceptual framework
• It creates a pathway for the creation and
implementation of strategy and measurement of
progress that is fully aligned throughout the
organization

5. NATURE OF BSC
Balanced Scorecard comprises an integrated system of performance measures which derive from, and support organization strategy

6. DIFFERENT FOLKS, DIFFERENT STROKES
Different companies need different balanced scorecards
Why?

7. 2. Because they may have different strategies
TWO MAIN REASONS
1. Because they may identify different measures for their strategy management.
2. Because they may have different strategies

8. Differences in Strategy
Examples of
Differences in Strategy
Dell and McDonald emphasize Operational Excellence
Home Depot emphasizes Customer Intimacy
Intel and Sony emphasize Product Leadership

9. THE BALANCED CONCEPT
Organizations may emphasize a particular perspective, but all have to maintain high standards in all the four perspectives, i.e. a BALANCED approach

10. The 4 Main Perspectives Customer Perspective
Financial / Regulatory Perspective
Internal Perspective
Learning and Growth Perspective

11. The Four Perspectives of the Balanced Scorecard
Innovation and Learning Perspective
How should we sustain our ability to
change and improve
Customer Perspective
How should we appear
to our customers
Financial Perspective
How should we appear
to our shareholders
VISION/STRATEGY
Internal Business Process Perspective
At what business practices
must we excel

12. Perspectives for NGOs and Govt organisations.
Mission perspective
Customer perspective
Internal perspective
Learning and growth perspective
Financial perspective

13. Perspectives For a Service Organisations.
Growth
Leadership
Acceleration (Transformational Change)
Collaboration
Innovation
Execution
Retention

14. BSC FOR INDIVIDUALS
Financial Perspective – Investments, Savings, Returns on Savings, Risk Mgt.
Learning & Growth – Continuing Education, Lifelong Learning, Continuous Education, Personal Capacity Building.
Internal Process – Self-Management, Managing Time, Personal Effectiveness.
Relationships (Customer) – Networks, Workplace, Wife, Children.

15. Customer Perspective Customer Satisfaction
Satisfaction Gap Analysis (Satisfaction vs.
   Level of Importance)
Satisfaction Distribution (% of each area scored)

16. Possible Performance Measures
To achieve our vision,
what customer needs
must we serve?

17. Financial / Regulatory Perspective
Cost / Unit
Unfunded Requirements or Projects
Cost of Services
Budget Projections and Targets

18. Possible Performance Measures
To satisfy our constituents,
what financial and regulatory
objectives must we
accomplish?
   

19. Internal Perspective Cycle Time Completion Rate
Cycle Time
Completion Rate
Workload and Employee Utilization
Transactions per employee
Errors or Rework

20. Possible Performance Measures
To satisfy our customers,
in which business processes must we excel?
     

21. must we learn, communicate and work together?
Learning and Growth
To achieve our
goals and accomplish
core activities, how
must we learn, communicate and work together? 

22. Possible Performance Measures
Employee Satisfaction
Retention and Turnover
Training Hours and Resources
Technology Investment

23. 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

24. Measurements Should: Translate customer expectations into goals.
Translate customer expectations into goals.
Evaluate the quality of processes.
Track our improvement.
Focus our efforts on our customers.
Support our strategies.

25. IMPORTANCE OF TARGETS Forrest Gump
“If you don’t know where you’re going, you’re probably not gonna get there.”
                             Forrest Gump
     

26. 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

27. Targets 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. 

28. Initiatives 
Once measures and targets are established, it is the responsibility of management to determine HOW the organization will achieve its goals. 

29. Initiatives  . 
Measures are used to determine the effectiveness of strategic initiatives.

30. WHY IS IT CALLED BALANCED?
 Balance is in 4 Main Ways:
1. Balance between Short and Long Term
2. Balance between 4 Perspectives
3. Balance between how others see us (perspective) and how we see ourselves (focus)

31. WHY IS IT CALLED BALANCED? (cont). 
4. Balance between measuring CHANGE and the SITUATION at a particular time – similar to difference between Profit Statement and a Balance Sheet.

32. WHY IS IT CALLED BALANCED? (cont)
5. Balance between lag and lead Performance Measures

33. Questions…

34. THANK YOU