A new approach to strategic management was introduced in the early 1990′s by Drs. Robert Kaplan ( Harvard Business School ) and David Norton. The system was dubbed the ‘balanced scorecard’. The inception of the balanced scorecard was caused due to the weaknesses or ambiguities left from previous management approaches. These known weaknesses of managing solely by financial measures was a commonly understood vice for years. The balanced scorecard approach is intended to provide a clear formula as to what companies should measure in order to balance the financial perspective.
The balanced scorecard is more then just a measurement system. It is a total management system that provides a framework to organizations that helps maintain and clarify a sense of vision or strategy. Along with the vision and strategy that is essential to a company’s growth, the balanced scorecard provides usable data that can be leveraged to take appropriate business action with surgical precision. It provides vital feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. continue reading »