1. Using the Balanced Score card as a Strategic Management System
Based on the article “Using the Balanced Score card as a Strategic Management System”
By: Robert S Kaplan & David P Norton
Harvard Business Review, July-August 2007

2. The Balanced Score Card
Customers
Internal business processes
Learning & Growth
Financial performance
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3. Implementing the Score card objectives, measures, targets & Initiatives
To achieve our vision, how should we appear to our customers?
To satisfy our shareholders and customers, what business processes must we excel at?
To achieve our vision, how will we sustain our ability to change & improve?
To succeed financially, how should we appear to our shareholders?
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4. Achieving long term objectives through short term actions
Often the linkage between short term financial measures and long term strategic objectives is weak
Because of this weak linkage, strategy implementation often is ineffective
Using the balanced score card, companies can strengthen the linkage between long term strategy and short term tactics
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5. Four processes to link long term objectives with short term actions
Translating the vision
Communicating and linking
Business planning
Feedback and learning
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6. Translating the vision
Helps build a consensus around the company’s vision and strategy
Helps arrive at an integrated set of objectives and measures that describe the long term drivers of success
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7. Communicating the linkage
Helps link strategy to departmental and individual objectives
This marks a change in approach from evaluating departments by financial performance and tying individual incentives to short term financial goals
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8. Business Planning
Enables companies to integrate their business and financial plans
Helps in aligning diverse initiatives with strategic goals
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9. Feedback & Learning Builds capacity for strategic learning
Short term results can be monitored closely
Strategies can be modified to reflect real time learning
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10. Possible implementation sequence
Clarify the vision, build consensus
Communicate to middle managers
Develop business unit score cards
Eliminate non strategic investments
Launch corporate change programs
Review business unit score cards
Refine the vision after re-examining cross business issues
Communicate the balanced score card to the entire company
Establish individual performance objectives
Update long range plan and budget
Conduct monthly and quarterly reviews
Conduct annual strategy review
Link everyone’s performance to the balanced scorecard
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11. Conclusion Balanced score card can be used to:
- clarify and update strategy
- communicate strategy throughout the company
- align unit and individual goals with the strategy
- link strategic objectives to long term targets & annual budgets
- identify and align strategic initiatives
- conduct periodic performance reviews to learn about and improve strategy
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