The Balanced Scorecard (BSC) is a strategic planning and management system used by organizations to:
communicate what they aim to accomplish,
align everyone’s daily work with the strategy,
prioritize projects, products, and services,
measure and monitor progress toward strategic objectives.
BSCs are widely used by businesses, industries, government institutions, and nonprofit organizations around the world.
It provides a way to view your organization with a focus on its high-level strategic objectives. It also helps you select the right measures so that you can achieve these objectives.
The system connects high-level strategy elements—such as mission ( our purpose ), vision ( what we aspire to become ), core values ( what we believe in ), strategic focus areas ( themes, results, and/or objectives ), and objectives ( continuous improvement activities )—with more operational elements such as measures ( or Key Performance Indicators - KPIs that monitor strategic performance ), targets ( our desired level of performance ), and initiatives ( projects that help you achieve your objectives ).
Traditionally, companies have used only short-term financial performance as a measure of success. They have evaluated their health according to how much money they generate.
Financial measures are certainly important, but they provide only part of the overall picture. They focus on the short term, while every company aims to build an organization that can succeed over the long term.
The name "Balanced Scorecard" is derived from the concept of evaluating strategic measures in addition to traditional financial measures in order to obtain a more "Balanced" view of performance. This enables organizational performance to be measured using a more balanced set of performance indicators.
As a result, the BSC incorporates additional non-financial strategic measures to create a stronger focus on long-term success. In other words, the Balanced Scorecard approach provides companies with a clear framework for determining what should be measured in order to balance the financial perspective.
In strategic planning, there should be one or two measures used to determine how each strategic objective is performing.
These measures require targets and should be evaluated according to a regular schedule.
For example, if a strategic objective is "Increase Acquisitions," an appropriate measure could be the "Number of New Acquisitions." If the strategic objective is "Improve Employee Expertise," an appropriate measure could be "Total Departmental Training Hours."
In Minerva, to view the BSC of a Strategy, you must click the "Balanced Scorecard" row after selecting the "Menu" tab on the "Strategy Information" screen or clicking the "Menu" button on the relevant "Strategy" screen.
On the Balanced Scorecard, all strategic Objectives are displayed in groups according to the strategic Perspective to which they belong.
For each objective, the associated Key Performance Indicator/s, Target Value/s, and Actual Value/s are displayed to monitor performance.
Note: If a Strategy Perspective is not selected when creating a strategic Objective, the objective cannot be displayed on the Balanced Scorecard, and therefore its performance cannot be monitored.