Balanced Scorecard

Balanced Scorecard Concept

Balanced Scorecard (briefly BSC) is a measurement and evaluation methodology of the strategic alternatives, developed by the northern American Robert Kaplan (professor at Harvard Business School) and David Norton (company’s consultant) and made known by the first time in 1992 on an article published on Harvard Business Review.

The big aims of this methodology are, according to its authors:

• Simplify the strategy and its communication to all organization members;
• Align the organization with the strategy;
• Connect the strategy to the plan and annual budget;
• Measure the effectiveness of the strategy, lying structured around four central questions (or dimensions):
• Client’s perspective: does the organization offer its clients a value superior to the one offered by its competitors, as in quality and performance, price and answer capacity?
• Processes Perspective: which is the efficiency and effectiveness of the value chain critical processes that generate added value for the client?
• Financial Perspective: does the organization create enough financial sources to cover the risk and the capital cost and to maintain its future sustainability?
• Learning and Growth Perspective: do the organizations’ structures allow that it adjusts quickly and efficiently to the external surrounding changes?

Since its creation, the BSC methodology has been used by thousands of organizations of the private sector, public sector and ONG’s all over the world. It was actually chosen, by the famous magazine Harvard Business Review as one of the most important and revolutionary management practices of the last 75 years.