In the 1990’s one of the revolutionary business concepts, The Balanced Scorecard, was developed by Kaplan & Norton. Since then thousands of organizations, large, medium and small have implemented this as one of their foundations to improved performance.

The Balanced Scorecard asked companies to view their performance from more than a financial perspective. Prior to the work by Kaplan & Norton a company’s Business Scorecard was basically its Income Statement. The Business Balanced Scorecard asks managers to evaluate their business’ performance holistically, based on financial and non-financial measures that are both leading and lagging. Performance Measure Categories include:

  • Operational Excellence
  • Customer Success
  • Employee Satisfaction
  • Innovation
  • Financial

To implement The Business Balanced Scorecard you must start at the top. Scorecards are hierarchical, they flow down from the highest level of the organization. Each scorecard must support the scorecard above. You should use the measurement categories as guidelines to choose measures. After you decide on the measures that define great performance, you must “weight” the measures based on importance. (The total “weight” is 100%.) Weighting is an opportunity to create alignment amongst the team. These weights are decided and debated until consensus is achieved.