About Balanced Scorecard
Balanced Scorecard (BSC) is a concept that allows strategic objectivity balance throughout an organization or its component units. The balanced nature of the concept is based on the following: financial and non-financial objectives, internal and external influence factors, short and long time horizon, leading indicators and lagging indicators.
This concept is considered as being, at the same time, a methodology to implement a cyclic system of defining strategic objectives based on causal relationships between organization processes, organizational alignment and cascading of goals until the employee level, the execution strategy based on strategic initiatives funded by StratEx and closing the management loop, based on measurement, learning, testing changes and adapting strategic objectives.
Finally, it is a management and optimizing system for the strategy execution of an organization, enabling it to obtain an accelerated increase in performance and strategic objectives defined. The implementation of the BSC system requires consistent, collaborative, analytical and adaptive tools, integrated with other systems of the organization.
Started nearly 20 years ago by Robert Kaplan and David Norton (and further developed by their team at Palladium Group), Balanced Scorecard is adopted by thousands of companies worldwide that successfully use it to accelerate the operational optimization of their work, reaching what Kaplan and Norton call “The Execution Premium”.
Kaplan and David`s concepts and ideas, related to the BSC system were described in an article, written by the two of them in 1992. After their article became highly popular, this fact was followed by a new content written and published in 1993. Not after a too long time, in 1997, Kaplan and Norton adopted their book entitled “The Balanced Scorecard”. People had the possibility to get knowledge of the BSC system, due to the two articles and the book published and written by the two of them. This book remains the most popular of all times, regarding to BSC, but Kaplan and Norton didn`t stop; they have written their second book, the so-called “The Strategy Focused Organization”.
The most meritorious of BSC implementations are added every year in “The Hall of Fame”, along with those made in Hilton, Infosys, Ingersoll Rand, Kraft Food, Merck, Lockheed Martin, Marriott, Motorola, Ricoh, Saatchi & Saatchi, Siemens, Cisco, Skandia, Statoil, UPS, US Department of Commerce, US Army, FBI, Royal Air Force and many others.
Thanks to these people who developed the notion and helped others to understand how it works, nowadays BSC is used in the literature of management, for a deeper understanding of what we call performance management, and for the management practice.
Balanced Scorecard is an integrated management system of an entire organization, which controls by the portfolio of strategic initiatives to achieve the balanced objectives and casually related to the organization`s strategies, monitored by their correlated indicators of performance and risk.
There is a high degree of awareness in relation to the concept and interest in deep knowledge. The implementation and usage of BSC in the future is considered as being opportune. The lack of knowledge remains however an obstacle for the usage in widespread of the concept.