balanced scorecard case study examples

Balanced Scorecard | Explained with Examples

The Balanced Scorecard is a strategic planning and management system used by organizations to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals. It was originated by Dr. Robert S. Kaplan and Dr. David P. Norton in the early 1990s.

The Balanced Scorecard aims to provide a more comprehensive view of organizational performance beyond traditional financial measures by incorporating these additional perspectives. It serves as a framework for translating an organization’s strategic objectives into a coherent set of performance measures, providing a more balanced view of how well the organization is achieving its long-term goals.

The Balanced Scorecard suggests that an organization is viewed from four perspectives and to develop metrics, collect data, and analyze it relative to each of these perspectives:

Financial Perspective

The Financial Perspective is one of the four pillars of the Balanced Scorecard, a strategic management tool that translates an organization’s mission and vision into a comprehensive set of performance metrics. The Financial Perspective focuses on the financial objectives of an organization and measures the economic consequences of actions taken in the other three perspectives (Customer, Internal Business Processes, and Learning and Growth).

The primary purpose of the Financial Perspective is to ensure that the company’s strategy, implementation, and execution contribute to bottom-line improvement. Traditional financial metrics like revenue growth, cost reduction, cash flow, and return on investment (ROI) are common in this perspective, but they are often complemented by more forward-looking indicators that can predict future financial performance.

Key Components of the Financial Perspective:

• Revenue Growth and Mix : This involves looking at the overall growth of revenue and analyzing the mix of revenue sources to ensure a diversified and sustainable income stream.
• Cost Management : This includes measures for controlling and reducing costs, improving operational efficiencies, and optimizing the use of resources.
• Asset Utilization : This involves metrics that assess how effectively the organization uses its assets to generate revenue. Examples include return on assets (ROA) and return on equity (ROE).
• Investment Strategy : This focuses on how capital investments support the organization’s long-term strategy. Metrics might include the payback period, internal rate of return (IRR), or the economic value added (EVA).

Importance:

The Financial Perspective is critical because it clearly shows whether the company’s strategy and operations contribute to bottom-line improvement. It ensures that strategic initiatives are financially viable and align with shareholder expectations. However, relying solely on financial measures can be misleading, as they often reflect past actions and decisions. This limitation is why the Balanced Scorecard includes non-financial perspectives to provide a more comprehensive view of the organization’s performance.

Integration with Other Perspectives:

The Financial Perspective is closely linked with the other perspectives of the Balanced Scorecard. For example:

• Customer Perspective : Satisfied and loyal customers often lead to better financial outcomes through repeat business and referrals, which can increase revenue and reduce marketing and sales costs.
• Internal Business Processes Perspective : Efficient and effective processes can lower operational costs, improve quality, reduce cycle times, and enhance productivity, all of which can positively impact the financial bottom line.
• Learning and Growth Perspective : Investments in employee development, organizational culture, and information systems can lead to innovations and improvements that drive long-term financial performance.

By integrating the Financial Perspective with the other perspectives, organizations can ensure a balanced approach to strategy execution that supports sustainable financial success.

Customer Perspective

The Customer Perspective is one of the four dimensions of the Balanced Scorecard. It is a strategic management tool that helps organizations translate their vision and strategy into action across four key areas: Financial, Customer, Internal Business Processes, and Learning and Growth. The Customer Perspective focuses on identifying and measuring the value delivered to customers, which is crucial for achieving financial success and sustainable growth.

Key Objectives of the Customer Perspective:

• Customer Satisfaction : Understanding and measuring how well the organization meets the expectations and needs of its customers. This can involve customer satisfaction scores, service quality assessments, and customer feedback.
• Customer Retention and Loyalty : Tracking the organization’s ability to retain customers over time, often reflected in customer loyalty rates, repeat purchase rates, and customer lifetime value. High retention rates indicate customer satisfaction, leading to increased revenue and reduced marketing costs.
• Market Share and Acquisition : Measuring the organization’s success in attracting new customers and expanding its presence in targeted market segments. This can involve tracking changes in market share, the effectiveness of marketing campaigns, and the rate of new customer acquisition.
• Customer Value Proposition : Ensuring the organization’s value proposition aligns with customer needs and preferences. This involves understanding what customers value most: price, quality, service, innovation, or something else, and ensuring that the organization delivers on these dimensions.

The Customer Perspective is critical because it focuses on the customer, who ultimately judges the company’s products and services. In many industries, especially those with high competition, attracting, satisfying, and retaining customers is a crucial determinant of financial performance. Furthermore, by focusing on customer needs and expectations, organizations can identify new opportunities for growth and innovation.

• Financial Perspective : Satisfied and loyal customers often lead to better financial outcomes, such as increased revenue from repeat purchases, higher transaction values, and lower costs associated with customer acquisition and retention.
• Internal Business Processes Perspective : To deliver the value that customers expect, organizations need to excel at internal processes such as product development, manufacturing, delivery, and after-sales service. Improvements in these areas can enhance customer satisfaction and loyalty.
• Learning and Growth Perspective : Developing the skills and capabilities of employees, fostering a customer-centric culture, and investing in technology and systems that improve customer interactions are all critical for delivering value to customers. This perspective supports the organization’s ability to innovate and adapt to changing customer needs.

Metrics and Measures:

To manage the customer perspective effectively, organizations typically use a variety of metrics, such as Net Promoter Score (NPS), customer satisfaction indices, customer complaint rates, customer retention rates, and market share growth. These metrics help organizations track their performance from the customer’s viewpoint and identify areas for improvement.

By prioritizing the Customer Perspective within the Balanced Scorecard framework, organizations can ensure that their strategic objectives are aligned with customer needs and expectations, driving both customer and financial success.

Internal Business Processes 

The Internal Business Processes perspective is one of the four components of the Balanced Scorecard, a strategic management tool designed to provide a comprehensive framework for translating an organization’s vision and strategy into a coherent set of performance measures. This perspective focuses on the critical internal operations and processes an organization must excel at to meet its customer and financial objectives effectively.

Key Objectives of the Internal Business Processes Perspective:

• Operational Efficiency : This involves measuring and improving the efficiency of internal processes, which can include reducing cycle times, minimizing waste, and optimizing resource utilization. The goal is to deliver products and services faster, cost-effectively, and with higher quality.
• Process Quality : Ensures that internal processes can produce outputs that meet quality standards, leading to higher customer satisfaction and lower costs related to rework or defects.
• Innovation and Product Development : Focuses on the organization’s ability to develop new products and services, improve existing offerings, and bring these to market quickly. This can involve measures related to the number of new product launches, the success rate of new products, and the percentage of revenue from new products.
• Supply Chain Management : Optimizes the flow of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer. Effective supply chain management can reduce costs, improve flexibility, and enhance customer satisfaction.

The Internal Business Processes perspective is crucial because it directs attention to the processes that impact customer satisfaction and the organization’s ability to achieve its financial objectives. By focusing on internal processes, organizations can identify inefficiencies and bottlenecks, improve quality, and drive innovation, all contributing to competitive advantage and long-term success.

• Customer Perspective : Excellence in internal processes directly impacts the quality, cost, and delivery of products and services, affecting customer satisfaction and loyalty. By improving internal processes, organizations can better meet customer needs and expectations.
• Financial Perspective : Efficient and effective internal processes can lead to lower operational costs, higher productivity, and improved profitability. Organizations can enhance their financial performance by reducing waste and improving process efficiency.
• Learning and Growth Perspective : The ability to improve internal processes often depends on the skills, knowledge, and capabilities of employees, as well as the organization’s culture and information systems. Investments in training, technology, and organizational culture can support continuous improvement and innovation in internal processes.

To manage and improve internal business processes, organizations might use a variety of metrics, such as:

• Cycle Time : The time required to complete a process from start to finish.
• Cost per Unit : The cost associated with producing a single unit of product or service.
• Defect Rates : The frequency of errors or defects in the outputs of a process.
• Process Throughput : The work or products produced within a given period.
• Capacity Utilization : The extent to which an organization’s total production capacity is used.

These metrics help organizations monitor their internal processes’ efficiency and effectiveness, identify improvement areas, and track progress over time.

By focusing on the Internal Business Processes perspective within the Balanced Scorecard framework, organizations can ensure that their internal operations are aligned with strategic objectives, contributing to overall performance and success.

Learning and Growth

The Learning and Growth perspective, also known as the “Organizational Capacity” perspective, is one of the four pillars of the Balanced Scorecard framework. This dimension focuses on the intangible assets of an organization, primarily its people, systems, and organizational procedures. The core idea is that long-term success is achieved through continuous improvement and the capability to innovate and change in alignment with market demands and opportunities.

Key Objectives of the Learning and Growth Perspective:

• Employee Skills and Knowledge : Emphasizes the importance of ongoing employee training and development to ensure the workforce has the necessary skills and knowledge to meet current and future demands. This includes technical skills relevant to specific job functions and soft skills facilitating effective communication, teamwork, and leadership.
• Employee Satisfaction and Retention : Recognizes that employee engagement and morale are critical to productivity and innovation. High employee satisfaction and retention rates indicate a positive organizational culture supporting personal and professional growth.
• Information Systems and Technology : Focuses on the role of technology in enabling efficient and effective business processes. This includes the hardware and software used by the organization and the systems and processes that ensure information is accurately captured, stored, and made accessible to decision-makers.
• Organizational Culture and Alignment : Pertains to creating a culture that supports the organization’s strategic objectives, encourages open communication, and fosters a sense of shared purpose among employees. Alignment ensures that everyone works towards the same goals and understands how their role contributes to the broader strategy.

The Learning and Growth perspective is essential for creating the foundation for achieving excellence in the other three Balanced Scorecard perspectives (Financial, Customer, and Internal Business Processes). It recognizes that an organization’s ability to innovate, improve, and meet customer needs over the long term depends on its people, systems, and procedures.

• Internal Business Processes : A skilled and knowledgeable workforce, supported by efficient information systems, can enhance process efficiencies, drive innovation, and improve quality, directly impacting operational performance.
• Customer Perspective : Engaged and well-trained employees are more likely to deliver superior customer service and contribute to developing products and services that meet evolving customer needs, thus enhancing customer satisfaction and loyalty.
• Financial Perspective : Investments in learning and growth initiatives can lead to long-term financial benefits, such as increased productivity, reduced operational costs, and enhanced revenue growth through innovation and improved customer satisfaction.

To manage the Learning and Growth perspective, organizations might use metrics such as:

• Employee Training Hours : The average number of training hours per employee, indicating the organization’s commitment to employee development.
• Employee Satisfaction and Engagement Scores : Regular surveys gauge how motivated, engaged, and satisfied employees are with their work and work environment.
• Turnover Rates : Particularly voluntary turnover rates, which can indicate the overall health of the organization’s culture and the effectiveness of its retention strategies.
• Technology ROI : The return on investment for technology initiatives, measuring how effectively technology investments support business objectives and process improvements.

By focusing on the Learning and Growth perspective within the Balanced Scorecard, organizations can invest in the capabilities and systems that will enable them to adapt, grow, and achieve long-term success.

Examples of balanced scorecard

To illustrate the Balanced Scorecard approach, here are examples for each of the four perspectives:

• Revenue Growth : Measures the year-over-year increase in income generated from the organization’s activities.
• Cost Reduction : Targets specific areas where operational costs can be minimized without affecting product or service quality.
• Return on Investment (ROI) : Calculates the efficiency of various investments in terms of their generated returns.
• Cash Flow Analysis : Evaluate the inflows and outflows of cash, ensuring the organization maintains a healthy liquidity position.
• Customer Satisfaction Index : Surveys and feedback tools measure customers’ satisfaction with the products, services, and overall experience.
• Market Share : Assesses the company’s proportion of total sales in its industry, indicating competitive strength.
• Customer Retention Rate : Measures the percentage of customers the company retains over a certain period, reflecting customer loyalty and satisfaction.
• Net Promoter Score (NPS) : Gauges customer loyalty by asking how likely customers are to recommend the company to others.

Internal Business Processes Perspective

• Quality Control Metrics : Monitors defect rates, rework levels, and adherence to quality standards.
• Cycle Time : Measures the time required to complete a business process from start to finish, aiming to increase efficiency.
• Process Cost : Analyzes the cost associated with each critical process, identifying opportunities for cost-saving improvements.
• Innovation Pipeline Strength : Evaluates the number and potential of new ideas or projects in development, indicating the organization’s future growth prospects.

Learning and Growth Perspective

• Employee Turnover Rate : Monitors the rate at which employees leave the organization, indicating the overall work environment and employee satisfaction.
• Training Hours per Employee : Measures the investment in employee development, correlating with improved performance and innovation.
• Skill Assessments : Regular assessments to ensure employees have the necessary skills and competencies for their roles and future company needs.
• Employee Engagement Scores : Surveys to gauge employee engagement and identify areas for improvement in the organizational culture.

These examples show how a Balanced Scorecard might be implemented in an organization. The specific metrics can vary significantly depending on the industry, the organization’s strategic goals, and challenges.

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What is a balanced scorecard? Examples and template

Some managers may choose to focus on financial data to measure success. Others may focus on operational processes or customer satisfaction.

Instead of focusing on measuring only one aspect of a business, the balanced scorecard takes a holistic approach.

After all, a single measure can’t accurately represent all elements of a business. By using a scorecard, managers can get a balanced view of financial performance, operational processes, and customer satisfaction.

What is a balanced scorecard?

A balanced scorecard provides a comprehensive overview of how a company is performing currently. It takes into account finances, operational processes, customer satisfaction, and employee performance. Using a balanced scorecard can help managers find issues and improve business outcomes.

Ultimately, a balanced scorecard is a tool to help drive strategy, implement business actions, and improve financial performance.

What are the benefits of a balanced scorecard approach?

A balanced scorecard seeks to uncover the answers to four questions:

• How do customers see us?
• What must we excel at?
• Can we continue to improve and create value?
• How do we look to shareholders?

Here are a few more benefits of using a balanced scorecard:

Improves focus

Puts all measures in one document, forces consideration of all operational measures, improves communication with senior managers, removes control bias.

The balanced scorecard forces managers to choose only a few critical measures to determine performance. Many companies suffer from data overload and don’t know how to glean actionable insights from all of the data they collect. A balanced scorecard provides only key information, which helps you to avoid getting bogged down with too many numbers and figures.

Since balanced scorecards focus on critical data, it makes it easier to bring several elements into a single management report. A balanced scorecard contains everything a manager needs to make informed decisions. It can help managers focus on customer-oriented products, improve quality, and better internal processes.

Because operations, finances, and customer satisfaction are presented together, you’re forced to consider how each aspect affects the other. Sometimes, you might make a decision purely on financial data without considering that the result may lead to poorer internal processes and lower customer satisfaction. A balanced scorecard helps prevent this scenario because the data is available to you.

Implementing the balanced scorecard is hard to do without involving senior management. These people often have a better understanding of the company’s vision and processes. This improvement in communication often helps remove underlying assumptions about a company’s performance and goes beyond only focusing on financials.

Traditional performance management measures are designed to dictate what they want employees to do and gauge whether they are doing it. This approach doesn’t always work well in modern business because the standard way of doing things may become obsolete within a year.

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Instead, the balanced scorecard puts vision and strategy at the center. It works to establish goals and pull employees toward a shared company vision. The balanced scorecard lets managers view interrelationships and lets employees determine the best course of action to meet company goals.

What are the 4 perspectives of a balanced scorecard?

The balanced scorecard is comprised of four perspectives:

Financial perspective

Customer perspective, internal process perspective, learning and growth perspective.

Each perspective focuses on a different aspect of an organization’s business strategy. Let’s dig a little deeper into what these perspectives provide to the balanced scorecard:

The financial perspective hones in on how the company looks to shareholders. Assuring shareholders they are receiving a return on their investment is crucial to the growth of the company. Executives may analyze data regarding the company’s financial performance and determine whether the company is profitable and make adjustments for improvement.

To sell your product or service, customers need to have a desire satisfied. The customer perspective determines customer satisfaction with the company’s current products and services. The more satisfied the customers are, the more likely they are to stay customers.

Data collected for this perspective can include customer feedback and competitor analysis. Based on the results, you can start to offer new products, promote high-satisfaction features, or improve product quality.

A proper analysis of business processes answers what you are good at doing and what you are bad at doing. Finding these answers can help you fix issues with bottlenecks, product delays, and other performance problems. It can also help you determine core competencies.

Essentially, this perspective aims to find opportunities to run at maximum efficiency.

Also known as the organizational capacity perspective, this area focuses on employees and their ability to produce work that improves and creates value for the company. It examines whether employees are receiving the training and resources they need to do their job. It also analyzes company culture and leadership performance.

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Balanced scorecard examples

Let’s look at a couple of real-world examples of balanced scorecards:

Case study 1: Improving financial performance with a balanced scorecard

A company is looking for ways to improve its financial performance. However, it focuses purely on financial metrics to make these evaluations. This means they miss out on discovering how internal processes, customer satisfaction, and employee productivity can have an impact on its bottom line.

By taking a balanced scorecard approach, it notices an opportunity to use the excess capability to market its existing products to a new, relevant audience. This adds revenue to the company with only moderate expenses. Periodic financial reports prove that this new campaign improved sales and overall market share.

Case study 2: Enhancing customer satisfaction through a balanced scorecard approach

In this example, a company has made vast improvements in its delivery performance and overall product quality. But over the course of three years, the company didn’t have financial improvement and saw its value go down.

So what happened? By using the balanced scorecard, the company can notice that it failed to recognize the aspect of customer satisfaction and the demand for new products. Executives will need to rethink their strategy and consider the ways it can better meet the needs of their customers.

How to create a balanced scorecard (with template)

To make your own balance scorecard, follow these eight steps:

• Define purpose — Determine what you want to achieve with a balanced scorecard and identify the business unit you will be analyzing
• Interview senior managers — The facilitator will interview senior managers to get their perspectives on the company’s strategic goals and performance measures
• Discuss with executive management — Top management will define the mission and strategy as well as what measures will be used to determine success
• Interview senior managers — Senior managers are interviewed a second time to review and consolidate input to create a first draft of the balanced scorecard
• Hold a manager workshop — All levels of managers gather to discuss the mission, strategy, and the first draft of the balanced scorecard. They may begin to implement an action plan or create stretch performance goals
• Hold a senior executive workshop — Senior executives approve of the balanced scorecard and develop stretch performance goals for measures
• Initiate an action plan — Based on the balanced scorecard, an implementation plan is created and communicated to everyone in the organization
• Review balanced scorecard — The balanced scorecard is not a one-and-done plan or a long-term goal list; it needs to have periodic reviews to ensure management is properly using excess capacity or removing it. Otherwise, operational improvements won’t help the bottom line

When everything is said and done, your balanced scorecard should look something like this:

Keep in mind, even the most efficient balanced scorecard doesn’t guarantee success. It only takes a company’s strategy and turns it into a measurable action plan. However, you can make better-informed decisions when it takes into account all variables of the scorecard instead of only focusing on one or two aspects.

A balanced scorecard creates value for the average employee. The measures are designed to motivate employees to fulfill the company’s strategic vision. While the balanced scorecard establishes goals, it leaves employees and managers to adopt behaviors and actions they deem appropriate to reach those goals.

This approach provides flexibility in a work environment that is constantly changing and evolving. Since the goals are created in a holistic manner, it will ideally lead to better financial performance as the company improves operations, customer satisfaction, and employee productivity.

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38 Real Balanced Scorecard Examples and Templates

The Balanced Scorecard is one of the most popular 1 frameworks for strategy execution. In this article, you will find:

• A brief explanation of what the Balanced Scorecard is,
• Examples of real Balanced Scorecards for different business domains, and
• Downloadable PowerPoint templates .

August 2024 Update: An example of a third-party vendor risk management scorecard has been added.

What is the K&N Balanced Scorecard?

Here is an executive summary of the Balanced Scorecard framework :

• Balanced Scorecard is a strategy execution framework developed by Robert S. Kaplan and David P. Norton 2 .
• It suggests projecting business strategy on four perspectives – the “ drivers ” (Learning and Internal perspectives) and the “ outcomes ” (the Customer and Stakeholder perspectives) 3 .
• Rather than merely grouping objectives and metrics into the four perspectives, the framework emphasizes showcasing the cause-and-effect relationships between the goals.
• The goals are further detailed into leading and lagging 4 performance metrics (KPIs) and initiatives (action plans).
• Following the rationale of involving employees in strategy execution, it suggests “ cascading ” or “ alignment ” of strategy 5 .

Source: 5-Step Strategy Implementation System

• The Balanced Scorecard is designed to cover the strategy of the entire organization. In practice, this is achieved 6 by cascading the overall strategy into aligned strategic and functional scorecards that form a comprehensive strategy.
• The framework combines various approaches to strategy decomposition and is positioned in the ecosystem 7 of strategic planning frameworks in the strategy execution sector.

38 Balanced Scorecard Examples

Below are examples of Balanced Scorecards for various domains. Each example includes an article with details and a link to the live Balanced Scorecard.

Scorecards for Governance, Risk, and Compliance (GRC)

General Business Balanced Scorecards

Functional Scorecards for Supply Chain

Scorecards for Sales and Marketing

Scorecards for Talent Management

Strategy Scorecards for Business Growth

Balanced Scorecards for Different Business Verticals

Getting Started Tutorials

Get your scorecard started by learning the best practice experience.

Balanced Scorecard Step by Step

Learn how to create your own maps or check out live examples of the Balanced Scorecard below.

Practical Example of Creating a Balanced Scorecard

The examples of the Balanced Scorecard discussed above were created using the specialized software BSC Designer. You can sign up for a free plan on the platform to start creating your own Balanced Scorecard.

• To get started, you can use one of the templates we discussed or start from scratch.

In this section of the product tutorial, we explain how to create a simple scorecard:

Four Perspectives of the Balanced Scorecard Framework

The perspectives of the Balanced Scorecard help to establish a cause-and-effect logic for the strategy map. Learn how to properly map business goals into the Finance, Customer, Internal Processes, and Learning and Growth perspectives.

Why these four perspectives? What do we map inside? How to come up with the relevant goals? Part 1 >

The difference between perspectives. Examples of the goals and indicators for each perspective. Part 2 >

Advantages and Disadvantages of the Balanced Scorecard Framework

Any business framework has its area of recommended application, its advantages and drawbacks. Check out the details of the analysis .

Balanced Scorecard Audit Checklist – 12 Control Points

Use the checklist below to audit your Balanced Scorecard, find possible problems, and fix them during the early stages before they result in bigger issues.

We divided possible situations into the green , yellow , and red zones so that you can quickly learn if your Balanced Scorecard is at risk and how to fix it. Continue to the Balanced Scorecard checklist .

Balanced Scorecard in Practice

As a part of free strategic planning course we discussed how to describe a strategy using Balanced Scorecard framework and its key components – strategy map, business goals, KPIs, and initiatives. Find below a complete video of the Lesson 6:

Templates for Balanced Scorecard

Powerpoint and pdf templates for balanced scorecard.

We have designed some templates for Balanced Scorecard. These templates make it easy to represent KPIs and BSC perspectives visually.

Updated: 15 templates in PDF and PNG added!

Ready-to-use templates for Balanced Scorecard save you time; you don’t need to hire a professional designer – you already have what you need for a quick start.

PDF Template for Strategy Map

Do you plan to brainstorm your strategy? We recommend you have a look at this print-friendly template for a strategy map.

That’s the template that we use on live events to start the discussion around strategy. The template is available in several languages and has proven to be effective for strategy discussion.

Automate Your Scorecards

Your time is too valuable to spend it on routine design tasks. Even with the best templates, the Balanced Scorecard task will consume a lot of your energy. Join business professionals who use BSC Designer for their strategy scorecards:

• Free plan for small projects
• Beautiful strategy maps
• Full Toolkit for the KPIs
• Free product video tutorials
• “ Balanced Scorecard Fact Sheet and Statistics ,” BSC Designer, visited July 27, 2024 ↩
• The Balanced Scorecard—Measures that Drive Performance , by Robert S. Kaplan and David P. Norton, 1992, HBR ↩
• “ What Is a K&N Balanced Scorecard and the Role of Its Perspectives ,” Alexis Savkín, BSC Designer, February 22, 2019, https://bscdesigner.com/four-perspectives.htm ↩
• “Success Factors and Leading Metrics vs. Lagging Indicators,” Alexis Savkín, BSC Designer, May 11, 2018, https://bscdesigner.com/leading-vs-lagging.htm. ↩
• Strategy Cascading: 4 Methods to Link Corporate and Functional Strategies , Alexis Savkín, BSC Designer, https://bscdesigner.com/cascading.htm, visited July 20, 2024 ↩
• “ 5-Step Strategy Implementation System ,” Alexis Savkín, BSC Designer, May 20, 2024 ↩
• “ Comparison of Strategic Planning Frameworks ,” Alexis Savkín, BSC Designer, January 26, 2020, https://bscdesigner.com/strategic-frameworks-comparison.htm. ↩

6 thoughts on “38 Real Balanced Scorecard Examples and Templates”

Hello, Thanks for this great article, but i can’t find the file with templates in order to download it.

Can you help me please?

Have a good day

It depends on what template you are looking for, here are the options: 1. A template in BSC Designer software (recommended if you plan to automate your scorecard with a software) – to get it look at the links below examples – normally one link goes to the online template and another to the article. 2. Graphical templates (in PowerPoint and PDF formats) – see the download link on this page 3. Strategy map template search for “Strategy Map” guide article on our website

I need help building a scorecard for a returns and credit group and also my order management team. Can someone help me with this

Hello Carlos,

It’s hard to give any recommendation without knowing the details. You can give it a try to Strategy wizard – https://www.webbsc.com/s/strategy-scorecard-wizard?sw=1 – that will guide you thought out the process by asking some questions.

Hii! I need help with Strategy Scorecard for Social Media with KPIs . Can I get the tepmplate so I can perform adjustments.

Sure! You can sign-up with an account at webbsc.com and get access to all the templates.

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Harnessing balanced scorecard examples and frameworks for strategic growth.

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In their groundbreaking 1992 Harvard Business Review article , The Balanced Scorecard: Measures that Drive Performance , professors Robert S. Kaplan and David Norton proposed a new way to measure organizational performance. 📈

The new approach, aptly named the Balanced Scorecard (BSC) framework, allowed organizations to develop a holistic set of key performance indicators (KPIs) by answering four main questions:

• What do customers think about you?
• What do you need to be really good at?
• Can you keep getting better and making money?
• How do your shareholders see you?

In this article, we’ll discuss the fundamental concepts of the Balanced Scorecard framework, its main benefits, and key components. We’ll also show you how to build a balanced scorecard for your organization with valuable tips and best practices. Lastly, we’ll share a few balanced scorecard examples in the manufacturing, retail, healthcare, banking, and technology industries. 

1. Customer perspective

2. internal perspective, 3. learning and growth perspective, 4. financial perspective, 1. better strategic planning, 2. improved communication, 3. better organizational alignment, 4. clear representation of objectives and goals, 5. enhanced performance measurement, 6. clarity of priorities, 7. culture of accountability, when to build a balanced scorecard, what to include on a balanced scorecard, creating a balanced scorecard with clickup, manufacturing industry – volkswagen or ford motor company, retail industry, healthcare industry, banking industry – wells fargo and citi bank, technology industry.

What Is the Balanced Scorecard Framework?

The Balanced Scorecard framework is a strategic planning and management system designed to capture a wide range of performance metrics , from financial performance to operational benchmarks, customer satisfaction indices, and learning and growth measures.

The framework offers a subtle yet powerful approach to measuring organizational performance. Unlike traditional performance measurement models, it’s an integrated system that doesn’t focus solely on financial metrics . Instead, it provides a balanced view of your organization’s health by taking into account critical non-financial aspects.

Let’s take a closer look at the four perspectives of the Balanced Scorecard framework.

Nowadays, business success is often defined by customer satisfaction. Most organizations consider their mission to be the best at giving customers what they want. So, it’s crucial for top managers to know how well they’re doing from the customers’ point of view. 

The Balanced Scorecard instructs companies to take their general goal of good customer service and break it down into specifics they can measure. These usually boil down to four key metrics:  

• Performance

The time component pertains to how long it takes from the moment a customer orders something to when they actually receive it. Quality is often expressed as the absence of defects, while performance and service measure how well the products or services add value for customers.

Bottom line: To use the Balanced Scorecard to gauge success from the customer perspective, you need to set goals for time, quality, performance, and service, and then find specific ways to measure these goals.

While it’s important to know how happy your customers are, it’s equally important to identify various internal business functions necessary to maintain customer satisfaction. After all, good customer service stems from a company’s inner workings.

Internal metrics in the Balanced Scorecard should focus on the business processes within the company that have the biggest impact on keeping customers happy . This includes how quickly products are made, how good they are, the skills of the employees, and how efficiently everything runs.

To determine what to measure internally, companies should identify the processes and skills essential for success and set goals for each. For example, they might decide that being fast at making products is crucial, so they’ll measure their production speed.

Given that many critical activities occur at lower levels of the organization, managers should divide these major objectives into smaller, actionable goals for employees.

Information systems are really helpful here. If something unexpected shows up in the balanced scorecard, managers can use these systems to determine what’s causing the problem. For instance, if the overall measure for delivering products on time is subpar, managers can dig into the system to pinpoint bottlenecks.

The Balanced Scorecard looks at how well a company is doing from two angles: customer satisfaction and internal processes. But what counts as success isn’t set in stone. Nowadays, with fierce competition globally, companies need to keep getting better. This means improving current products and processes and even coming up with brand-new, better products.

A company’s ability to constantly generate new ideas, optimize them, and learn from mistakes is crucial for its success. This directly affects the company’s ability to create value. Only by constantly improving and innovating can a company grow, attract more customers, and make more money, which leads us to the final perspective of the Balanced Scorecard.

Pro tip: Take an organized and systematic approach to crafting your improvement strategy. Leverage the ClickUp Continual Improvement SOP Template to standardize the processes that go into making your product or service better.

The financial perspective of the Balanced Scorecard is all about how the company appears before its shareholders. This means looking at profit, growth, and overall value . 💸

Financial health has traditionally been the primary indicator of business performance and alignment with strategic goals. However, Kaplan and Norton argue that although necessary, traditional financial measures like quarterly sales and profits don’t give a complete picture of how well a company is doing. 

There’s also the opinion that financial metrics only look at the past and don’t consider what a company is doing right now to create value, so they need to be viewed together with the other three performance perspectives of the Balanced Scorecard.

Benefits of Building a Balanced Scorecard for Your Business

The balanced scorecard is a must-have for businesses aiming to grow in a smart and sustainable way. This performance assessment tool enables companies to see the big picture, track progress, and make intelligent decisions based on facts.

According to a survey, 80% of organizations using balanced scorecards reported improvements in operating performance . It sounds amazing, but there are other benefits too. Let’s check them out. 👇

Implementing the Balanced Scorecard framework in your operations can boost your planning for the future. It includes a strategy map , which visually represents how different parts of your business strategy are connected and gives you a clear picture of how well your company is doing from various perspectives, not just financial.

Here are some of the ways in which the Balanced Scorecard approach can improve your strategic planning:

• Improved decision making : Leaders can use the performance data collected from various perspectives to identify risks, trends, and opportunities and make better decisions 
• Identifying and fixing problems quickly : You can easily spot issues and deal with them systematically. For example, if you see that customers aren’t as happy as they used to be, you can figure out why and fix the problem before it escalates
• Encouraging continuous improvement : By regularly tracking performance across different areas, the Balanced Scorecard fosters a culture of continuous improvement. For example, if you see that a particular process isn’t working as well as it should, you can brainstorm ways to improve it and then track if those changes are making a difference

Pro tip: You don’t have to start from scratch if you use the ClickUp New Business Strategic Plan Template . It lets you easily define your vision and set clear goals for your team to strive for.

Implementing the Balanced Scorecard framework not only helps you design your business strategy better but also improves communication in your company. Working together is more manageable when everyone understands the company’s objectives and their role in reaching them.

With the Balanced Scorecard, team members can share ideas and give helpful feedback , which can improve problem solving. It also ensures everyone knows what’s going on at all times, reducing confusion and friction.

Creating a balanced scorecard doesn’t just improve communication; it also ensures alignment toward shared objectives. Here are some specific advantages:

• Enhances focus : When they understand how their work contributes to the overall objectives, team members can focus more effectively on essential tasks
• Improves efficiency : When processes align with the overarching objectives, time is used more efficiently and there’s less waste
• Promotes adaptability : Clear direction enables better preparation for and adjustment to changes 
• Boosts employee satisfaction : When employees see how their work helps the company, they tend to feel more motivated and deliver higher-quality work

Using a balanced scorecard for your business is like ensuring everyone knows the game plan and their role in it. It’s not just about setting goals and objectives; it’s about making sure everyone understands why those goals and objectives matter and how they fit in.

For example, imagine your company’s objective is to boost customer satisfaction. With a balanced scorecard, everyone, from the customer service team to the software developers, knows their job impacts customer satisfaction. So, they can focus on doing their part to make customers even more satisfied.

One of the best things about this framework is that it helps you figure out what really matters—those key performance indicators (KPIs) that show if you’re on the right track. You can actually measure how content your customers are, how smoothly the processes are running behind the scenes, and how much your team is evolving.

And here’s the best part: It’s not a one-time thing . You can keep checking your progress, fine-tuning your approach, and improving processes across the board. 

Setting priorities is an integral part of building a balanced scorecard. They help organizations know where to invest their time and energy. By figuring out what needs the most attention , businesses can ensure the alignment of initiatives with their primary objectives.

Imagine you’re the CEO of a marketing agency, determined to improve performance and achieve ambitious growth targets. So, you use a balanced scorecard.

Transparency becomes paramount . You hold a company-wide meeting to outline objectives such as increasing client satisfaction, generating more leads, and improving campaign effectiveness. Each team member understands their specific role and goals, whether it’s creating compelling ad copy, optimizing social media campaigns, or analyzing market trends.

The balanced scorecard serves as a performance-tracking tool during weekly team meetings. You monitor vital metrics like client retention rates, lead conversion rates, and campaign ROI. This allows you to identify areas needing improvement and recognize top-performing teams.

By clearly defining roles and responsibilities , the team becomes more engaged and motivated. Each member understands how their contributions impact the agency’s success, fostering a sense of ownership and commitment.

Pro tip: Guide your team with the ClickUp Project Management Roles and Responsibilities Template . Clearly define roles and assign tasks while maintaining accountability and healthy communication.

So, when’s the right time to build a balanced scorecard for your business? It’s an important question to ask because timing can significantly impact the success of this strategic planning and management tool .

It’s not about a specific date on the calendar but rather about recognizing the signals that your company is ready to benefit from the framework. Here are a few signs that it might be time to start building a balanced scorecard:

• You’re struggling to align your team’s daily activities with your strategic goals : A balanced scorecard helps to bridge this gap, translating high-level objectives into measurable actions
• You find it challenging to monitor your company’s performance across multiple areas: The balanced scorecard provides a comprehensive picture, covering financials, customer satisfaction, internal processes, and learning and growth
• You’re finding it hard to communicate your strategy effectively :The balanced scorecard serves as a communication tool, helping everyone in your company understand and work towards shared objectives
• You’re not seeing the expected results from your strategic initiatives : A balanced scorecard can help you track your progress toward your objectives, identify areas where you’re falling short, and make necessary adjustments

Crafting a well-rounded balanced scorecard requires careful consideration of key elements across four critical business perspectives. Each of these perspectives must be clearly defined and measured to ensure you’re tracking progress toward your strategic objectives.

Here’s a simple breakdown of the key elements of a typical balanced scorecard: 

• Objectives : These are high-level goals that define what the organization aims to achieve strategically. For example, Become an internationally-recognized brand . Typically, every business has 10-15 strategic objectives
• Goals : They are more specific, measurable, and time-bound targets that make up the broader strategic objectives. For the objective in the previous point, a goal would be to increase sales in foreign markets by 15% by next year. There are typically more goals than objectives
• Metrics : Metrics or indicators help assess whether objectives are being achieved strategically. An example of an indicator would be the total value of international sales. Each objective may have 1-2 measures, totaling around 15-25 measures at the enterprise level
• Initiatives : These are action programs designed to accomplish objectives. They can be referred to as projects, actions, or activities outside of the balanced scorecard context. Generally, organizations have around two initiatives underway for every objective, with 5-15 strategic initiatives in total
• Action items : These tasks emerge from review meetings and are delegated to individuals or small teams. While not part of the BSC framework, they are integral to the overall management process, aiding in the achievement of key initiatives in a timely and organized manner

How to Build a Balanced Scorecard?

Creating a balanced scorecard can be a bit of a puzzle. You need to think strategically, thoroughly understand what your business is aiming for, and have a plan for keeping track of how well things are going in different parts of your organization. Here’s how you can do it:

• Define the vision and strategy of your organization
• Identify the key performance areas in line with your strategy
• Develop objectives and measures for each performance area
• Implement , track , and refine your scorecard

For a summary of the process, take a look at the following table:

If you want to give yourself a leg up when creating a balanced scorecard, choose a productivity and project management platform like ClickUp that offers ready-made templates. We’ll specifically highlight the ClickUp Balanced Scorecard Template —your shortcut for building simple yet comprehensive balanced scorecards for every industry. 

At first glance, the ClickUp Balanced Scorecard Template might seem like just another whiteboard. Yet, it’s a powerful weapon for boosting performance and tracking success . It enables you to analyze data, set clear goals, design initiatives, and monitor progress toward achieving those goals.

This dynamic tool helps you track your progress and stay organized with elements like:

• Custom Statuses : You can create tasks and assign them different statuses, like In Progress , Completed , or whatever fits your workflow best. This way, you can easily see where each key performance indicator (KPI) stands in terms of progress
• Custom Fields : Use them to categorize tasks and add specific details to manage your KPI tracking effectively. For instance, you can note down target values, timeframes for completion, or how much progress has been made so far
• Custom views : The beauty of this template is that it’s not limited to the Whiteboard view . You can switch between different layouts like List, Gantt, Workload, Calendar, and more. This flexibility allows you to tailor your ClickUp workflow precisely to your needs and preferences
• Project management features : Enhance your KPI tracking with advanced project and task management features like comment reactions, nested subtasks, multiple assignees, and priorities. These features enable smoother collaboration, better organization, and more effective tracking of your KPIs

The template also lets you add checklists to help prioritize tasks easily. You can also include interactive elements such as banners, buttons, and links to make the content more interesting and informative.

Let’s see how to build your very own balanced scorecard with ClickUp in just four simple steps:

1. Think about what you want to achieve

The first step is to define your company’s vision. What does success look like for your business? If you already have one, use this step as a reminder and to set the stage for discussions. This will help you pick the right metrics for measuring progress.

Set objectives and goals with quantifiable targets for your organization easily using the ClickUp Goals feature.

2. Break it down

Leaders in each area should set their objectives and key results (OKRs) and agree on initiatives that benefit everyone involved. Once you know your goals and objectives, break them into smaller, manageable pieces. Think about the different areas of your business, like financial health, customer satisfaction, and running things smoothly behind the scenes.

Make a Whiteboard in ClickUp to work with your team and develop ideas for measuring progress.

3. Make your scorecard

Now, put all those metrics together in a chart or table. They will show you how close you are to reaching your business goals .

Use ClickUp’s Table view to make a personalized scorecard and track important performance indicators.

4. Keep track and adjust

Once your scorecard is all set up, check it regularly to see how you’re performing. If things aren’t going as planned, you might need to change your approach.

Schedule a recurring task in ClickUp to check and update your scorecard regularly.

Once you fully customize the template following the steps above, it becomes a roadmap for your business’s growth and innovation journey. It’s an excellent way to share upcoming goals with stakeholders and ensure everyone is in the loop.

5 Balanced Scorecard Examples – Industries/Companies that use Balanced Scorecard

To get a better idea of how the balanced scorecard works, let’s look at some examples from different industries . These will show us how businesses use this tool to improve operations, make more money, keep customers happy, and help employees do their best.

Manufacturing companies often use balanced scorecards to streamline production processes to increase output and decrease costs. 🏭

They track financial metrics, operational efficiency, customer feedback, and employee satisfaction. Based on their findings, they can improve machinery, employee training, and product design. As a result, these companies can increase profits, enhance customer satisfaction, and boost employee morale. 

In a retail setting, implementing a balanced scorecard involves defining key objectives such as increasing sales, improving customer satisfaction, optimizing inventory management, and enhancing employee productivity. 

For example, a retail chain might set KPIs such as sales per square foot, customer satisfaction scores, inventory turnover rates, and employee sales performance. By regularly tracking and analyzing these metrics, the company can make informed decisions to drive growth and improve overall performance.

In the healthcare industry, implementing a balanced scorecard involves establishing KPIs such as patient satisfaction scores, average wait times, readmission rates, and employee turnover rates. By closely monitoring these metrics, healthcare providers can identify areas for improvement and implement strategies to deliver better care while optimizing resource utilization. 🏥

In the banking sector, using a balanced scorecard means setting goals to improve money matters, keep customers happy, manage risks, and run things smoothly. 

For example, a bank might aim to make more money, keep customers happy, minimize bad loans, and ensure employees do their jobs well. By monitoring these aspects, banks can make smart decisions to make more money, keep customers satisfied, and run the bank efficiently. 🏦

In the technology sector, using a balanced scorecard means setting objectives related to creating innovative products, keeping customers happy, running operations smoothly, and developing employees. 

For instance, if a software company wants to release new products quickly, retain customers, respond promptly to technical issues, and help employees learn new skills, it will keep track of these aspects. This could lead to improving their products, providing excellent service, operating efficiently, and building a skilled team.

Finding the Right Balance with ClickUp

As we’ve seen, the Balanced Scorecard framework is not just another tool; it can be a real game-changer for your business. It goes beyond numbers, helping to align your entire operations with your overarching strategy.

Don’t get bogged down in day-to-day stuff and lose your bearing. With a balanced scorecard, you can stay on top of what’s happening in your business, boost performance, and guide your organization to success.

And with ClickUp, you’ve got the perfect partner to make it happen. ClickUp’s templates and features are designed to help you implement and manage the Balanced Scorecard framework seamlessly. From setting goals and tracking progress to collaborating with your team and staying organized, ClickUp has everything you need to improve your financial performance, customer satisfaction, and internal processes, as well as foster a culture of continuous learning and improvement. Sign up for Clickup and get ready to turn your strategic vision into reality. 🤩

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The BEST case studies to help you put the balanced scorecard into practice

The balanced scorecard is one of the most widely implemented business strategy tools globally. there’s nothing like a case study example to gain inspiration and get a feel for exactly how this works in a corporate environment..

To save you time, Fact3 have sourced a handful of great examples from experienced organisations to help you get started.  We’ve included some written examples, as well as some alternative examples of one pagers you can take inspiration from when writing your own.  We’ve also included some sample outputs to give you an idea of the type of end results businesses have experienced. 

To caveat, most documented examples of balanced scorecard usage are from large global organisations.  Some of these are just a really interesting read and may not be totally applicable to smaller organisations, but you’ll find tips and tricks along the way that you can scale and implement according to your business environment.   

How Apple uses the balanced scorecard to dominate their competition   

Tesco’s adaptation of the balanced scorecard method to drive its strategy and operations

How Philips focus on their employees to stay ahead of the competition, and how the balanced scorecard has helped them do that

Using the balanced scorecard in public sector organisations - How Homeland Security take learnings from the private sector and adapt them

Combining the balanced scorecard with performance related pay for maximum results

The Emirates National Oil Company: Results achieved from implementing a balanced scorecard approach

Balanced scorecard visual example, Balanced Scorecard Example Intrafocus 2016 https://www.intrafocus.com/2016/06/balanced-scorecard-example/

R.S Kaplan and D.P. Norton, “Using the balanced scorecard as a strategic management system”, Harvard Business Review Jan-Feb 1996

The most common cyber security threats to SMEs

Is your business ready for co-sourcing.

How To Implement The Balanced Scorecard Framework (With Examples)

Despite being one of the most effective strategy tools, the Balanced Scorecard (BSC) often remains underutilized or misunderstood. 

Consequently, many strategy leaders struggle to impact the organization’s performance or quickly adjust business strategies to changing conditions.

In this article, we’ll provide a detailed guide to the Balanced Scorecard Framework, covering: 

• Key benefits of the Balanced Scorecard
• Debunking a common misconception for better results
• How to implement a Balanced Scorecard
• How to use Balanced Scorecard for strategy tracking and execution 
• How to apply Balanced Scorecard approach with Cascade

But what exactly is a Balanced Scorecard? Let's dive in. 👇

What Is A Balanced Scorecard?

The Balanced Scorecard, a famous strategy framework by Robert Kaplan and David P. Norton, debuted in Harvard Business Review in the 1990s. Since then, it has been used by thousands of organizations, and is a staple in business and strategic management courses.

The Balanced Scorecard serves as a management system, guiding organizations in aligning strategic initiatives with operational objectives and improving business performance. This framework emphasizes the development of Key Performance Indicators (KPIs) across four critical areas for faster and better decision-making.

What Are The 4 Perspectives Of A Balanced Scorecard?

The Balanced Scorecard (BSC) divides its strategic approach into four key perspectives: financial, customer, internal business process, and learning & growth. Each plays a pivotal role in ensuring a holistic view of organizational success.

Financial perspective

In this perspective, financial performance measures indicate whether an organization's strategy and execution are improving its financial goals. Typical scorecard financial metrics include:

• Revenue growth rate
• Operating income
• Return on equity
• Return on investment

Customer perspective

This perspective should focus on measures that deliver value to the customer. These scorecard metrics can include:

• % of sales from new products
• Customer lifetime value (CLV)
• Customer complaint resolution time
• Customer churn rate
• Net promoter score (NPS)

Internal business process perspective

In this perspective, prioritize internal metrics that impact customer satisfaction most. Optimizing these metrics ensures operational improvements that boost performance in a customer and financial perspective. This would include measuring things such as:

• Productivity per employee
• Cycle times 
• Quality control defect rate
• Innovation rate

Learning and growth perspective

This area of the balanced scorecard focuses on KPIs that encourage continuous improvement, innovation, and learning. Examples of metrics include:

• Employee satisfaction score
• Number of training hours per employee
• Employee turnover rate
• Alignment with organizational culture
• % percentage of leadership positions filled internally

📚 Recommended reading: Strategy Officer KPIs: 3 Ways CSOs Can Prove Their Value

Benefits Of Balanced Scorecard Implementation

The four perspectives of the Balanced Scorecard serve several purposes.

• They ensure a focus on the main drivers of success, such as customer satisfaction and operational efficiency. 
• They compel organizations to assign tangible metrics to each perspective, boosting accountability .
• They serve as a management framework for communicating the organization’s strategy to stakeholders. For example, 'We are doing x because it helps us succeed in the Customer perspective of our scorecard. '
• They help identify competitive advantages and areas for improvement .

In 1997, one study by the Insitute of Management Accountants found that 64% of U.S. companies use the Balanced Scorecard. This trend continues to this day, according to Bain & Company’s 2023 survey of 1,000 executives and managers.

Interestingly, many of our strategy execution platform users unknowingly align with its principles, reflecting its intuitive appeal. We often talk with them about the Balanced Scorecard and discover they're unaware they've implemented it.

However, they have arrived at their conclusions naturally that their efforts and measures should focus on roughly the same four perspectives that the Balanced Scorecard suggests.

The ultimate gain lies in sharpening focus across leading and lagging KPI indicators , ensuring a balanced approach to short-term and future objectives.

Problems With Balanced Scorecard Implementation

As with any popular strategic framework, the Balanced Scorecard has picked up its fair share of critics. The main criticisms of the Balanced Scorecard highlight its:

• Time-consuming setup.
• Complexity leading to misunderstanding. 
• Rigidity amidst changes in the business environment. 
• Overemphasis on financial measures. 
• Neglect of external market dynamics.

Despite criticisms, mastering the Balanced Scorecard's strategic depth—beyond mere reporting—unlocks significant organizational advantages.

People think of the Balanced Scorecard as four perspectives you simply 'slot' your strategic goals into. When they visualize the Balanced Scorecard, they think of it like this diagram:

This diagram shows how four simple perspectives link together to form a Balanced Scorecard. In each perspective, there are Strategic Objectives , Projects , and KPIs , which you then work toward achieving.

The goal is to balance each perspective and improve organizational performance.

This traditional method assumes that each perspective is independent of the others. Nevertheless, this approach to implementing the Balanced Scorecard is fundamentally flawed. 

Through years of trial and error, it turns out that how we order them matters. The modern balanced scorecard demonstrates how each perspective builds on the previous one.

The truth is that proper implementation, respecting the order of perspectives, transforms BSC into an unparalleled tool for strategic alignment and performance enhancement.

The Right Way To Implement The Balanced Scorecard

Proper implementation of the Balanced Scorecard begins with approaching the diagram from the bottom up, ensuring a solid foundation for each subsequent layer.

Visualize the Balanced Scorecard as a strategy map , where each step, starting from Learning & Growth, systematically guides you toward the ultimate goal: increased profitability.

There is also a different way to look at this. 

As with leading and lagging KPIs , the Balanced Scorecard is a series of leading and lagging perspectives. 

Learning and Growth, Internal Processes, and Customer will be your leading perspectives, as these perspectives facilitate the delivery of your primary lagging perspective: Financial performance . It's termed 'lagging' because it results from actions taken in the other three perspectives.

This profit-centric view, however, faces scrutiny. Critics point out its potential misalignment with organizations like nonprofits, government entities, or innovators such as Google and Meta, whose missions extend beyond financial results. 

These entities strive for innovation, user experience, and social or environmental responsibility goals that a narrowly profit-focused framework like the Balanced Scorecard might only partially support.

How to use this approach to implement BSC 

Begin your BSC implementation journey with actionable steps that are designed to drive performance:

• Assess your current business performance using core business metrics . 
• Identify and address roadblocks and risks for each BSC perspective.
• Prioritize business activities in the order they must be tackled to allow the most rapid progression through the stages.
• Build a strategic roadmap to close the current and desired state gap. 
• Map out and understand cause-and-effect relationships between different strategic objectives.

When mapping dependencies, consider how a company's ability to learn and grow directly impacts its ability to manage its internal processes. By refining your internal processes, not only do you enhance customer service and lower costs, but you also set the stage for increased sales. 

This direct impact on your bottom line demonstrates how strategic enhancements lead to achieving broader financial objectives, a testament to the BSC's efficacy.

Balanced Scorecard Example

Your Balanced Scorecard should be integrated into two main phases of the strategy lifecycle: strategic planning and strategy execution . 

We will show you examples using Cascade, our strategy execution platform , but you can also use an Excel spreadsheet.

Thanks to its flexible structure, Cascade supports various strategy frameworks , with the BSC being a popular choice among our customers. See how to set it up here .

📚 Recommended reading: The Only Balanced Scorecard Software You’ll Ever Need (2023)

Balanced Scorecard for strategic planning

One of the most effective places to implement the Balanced Scorecard is in your strategic planning process. 

As the first and most crucial step in implementing a Balanced Scorecard methodology, this will lay the foundation for everything your organization will do in the future.

Here’s how you can implement the Balanced Scorecard from a strategic planning perspective with Cascade in 2 steps:

Step 1: Use Focus Areas as your perspectives

This Balanced Scorecard implementation methodology involves orienting your whole strategic plan around the Balanced Scorecard. You will set each perspective as a strategic Focus Area and then align Objectives, Projects, and KPIs directly underneath it. You’ll end up with a strategic plan that looks something like this:

💡Tip: Shared Focus Areas in Cascade align every plan with your Balanced Scorecard’s four focus areas—finance, customer, internal processes, and learning and growth—ensuring horizontal alignment and seamless collaboration across teams towards common goals. 

Step 2: Add Objectives, Projects, and KPIs for each perspective

The implementation doesn’t stop with the setup of your focus areas. You need to make sure each of your perspectives has a good mix of:

• Strategic objectives (overall outcomes)
• Projects (specific initiatives)
• KPIs (measures of success)

💡Tip : With Cascade's Alignment & Relationships maps, you can easily see how the objectives and initiatives from the different perspectives of your plan work together to achieve your strategic goals.

👉🏻 Streamline your strategic planning process with our free Balanced Scorecard Strategy Template .

Balanced Scorecard for strategy tracking

Moving from strategic planning to strategy tracking, let's explore using a Balanced Scorecard for performance management and progress monitoring. 

This is a crucial element of every strategy execution . You must integrate your Balanced Scorecard into governance by embedding it in weekly team meetings and board reports for continuous strategic alignment and improvement.  

Here’s how to do it in Cascade: 

Create a Balanced Scorecard Dashboard

Start by creating a Balanced Scorecard Dashboard for your strategic reporting . In the dashboard, you should see your score for each of the four perspectives and a summary of your key objectives, projects, and KPIs. It should look something like this:

💡 Tip: Keep your dashboard fairly high level; for complex strategies with multiple layers, opt for dedicated dashboards for each strategic plan.

Create Balanced Scorecard Reports

The dashboard offers a snapshot of progress, but for in-depth analysis, switch to a tabular report featuring detailed updates and commentary for each perspective. Your report should look something like this:

This detailed report format is invaluable for deep dives during your strategy review meetings .

💡 Tip : With Cascade, you can manually track and update your metrics or take advantage of automation to make the most of your time —no one likes to spend hours on progress updates. You can integrate Cascade with the tools your teams use, pull data from multiple systems, and add context in real time.

📚 Read this article to find out how to use Cascade as your balanced scorecard software. 

Balanced Scorecard + Strategy Execution Software = 🚀

Intrigued by the Balanced Scorecard approach? Enhance your strategic efforts with a strategy execution platform that simplifies planning and execution. 

Cascade excels at bringing your Balanced Scorecard to life. It offers a cohesive approach to strategic management and provides a unified platform that amplifies accountability, fosters alignment, and drives tangible business results.

If you'd like to learn more about how Cascade can help you implement the Balanced Scorecard, book a demo today .

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Everything You Need to Know About the Balanced Scorecard

By Joe Weller | July 27, 2017

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Your company is unique. Along with being unique, your company, like the marketplace, is always in a state of change. Capturing the nature of this flux while taking all levels of an organization into account can be a challenge for even the most experienced management team. Today, one of the best and most readily available tools to assist with this process is the balanced scorecard . Balanced scorecards can be complex in design, but are simple in practice. They bring your strategic planning into stark relief and allow you to develop measures - down to the lowest level - that align with your business approach.

In this guide, we will walk you through what a balanced scorecard is, including how it divides into four perspectives. We then delve into the components of each scorecard perspective, the strategy map, and how a scorecard looks in the context of a closed-loop system. We’ll also discuss the history and future of the balanced scorecard, with some some guidance from our expert. Next, we look at the scorecard in a few different industries — information technology, human resources, and accounting — and how it applies to these different businesses. Most importantly, we discuss who on your team should develop a balanced scorecard and what tools you should use to put it into practice. Finally, we give you some extra resources that you can look at for further study.

What is a Balanced Scorecard?

A balanced scorecard (BSC) is a management tool used for strategic planning. Generally speaking, a BSC is a standardized report that details performance management measures. With a BSC, you have the ability to describe and measure your company strategy and then track how you achieve results. This is a big-picture view with lower-level, specific, defined measures to attain that big picture. Instead of gauging how well your company is doing based on how much revenue is coming in in the short term, a BSC helps you build a sustainable business for the long haul - by doing so, the BSC gives you a truly “balanced” picture of your company. You will design your BSC when you have already developed at least part of your company strategy, but a BSC does not create your company strategy for you. However, it can help if you’ve only partially completed your strategy, because it can reveal the inconsistencies and holes in your team’s initial thinking. In addition, a BSC reports not only financial performance measures but also nonfinancial performance measures.

The BSC framework itself is based upon leading and lagging indicators. Leading indicators are drivers - those that help you look ahead toward achieving your goal - and should be predictive in nature. By contrast, lagging indicators are outcomes - those that tell you what has already happened - and should confirm your long-term trends. A good BSC has a healthy mix of leading and lagging indicators. 

To measure outcomes, you’ll use key performance indicators (KPIs), the metrics that show whether your company is achieving what it set out to do. Some examples of leading indicators are the number of new innovations, the growth in new markets, and the number of patents. Some examples of lagging indicators are revenue growth, earnings before interest, tax, depreciation, and amortization (EBITDA), and operating income growth. However, regardless of the indicators you choose, there should only be a small number per scorecard so you can focus your efforts.

The Four Perspectives of the Balanced Scorecard

The BSC breaks your business down into four different perspectives that measure your company’s condition. These perspectives are often called four legs. The four legs concept posits that each leg is equally important - losing one would render a whole business unstable. Each leg symbolizes a different group of stakeholders to whom your company is responsible. These stakeholders consist of the following groups: financial, internal business processes, the customer, and learning and growth. These perspectives are dependent on each other and build from your culture of sharing and development to the financial health of your company. 

• Learning and Growth: This perspective focuses on the people, information, and organization and how you can improve upon and create more value in these elements. This category also refers to your company’s ability to constantly improve, innovate, learn, and be competitive. The remaining three perspectives grow out of this leg. 
• Internal Business Processes: When we look at this perspective, we are really asking, What must we excel at? In order to please our customers and stakeholders, we must first implement processes that enable us to do so. Further, we should optimize these processes to improve quality and efficiency. Process data can show you exactly where any problems with the product or service lie. 
• Customer: Your customers’ perception of how your company is performing is the key to keeping it alive. Management should focus on the specific measures to please customers, rather than the strategic goal of pleasing customers. These specific measures should fall into five categories: timeliness, quality, performance, service, and cost. 
• Financial: This perspective covers the revenue or financial performance of your company (i.e., what your shareholders see). You outline your profit targets, budget, and cost-saving measures in this perspective. The performance of this perspective is usually strong when the other three perspectives are strong.

The Components of the Balanced Scorecard

For each perspective, there are four main BSC components that you must define:

• Objectives: These are your high-level organizational goals. Taking into account your already-developed company strategy, you should be able to come up with 10-15 strategic objectives that you are trying to accomplish. You can use a SWOT analysis to define these objectives. (The SWOT is a review of your business’s strengths and weaknesses, opportunities, and threats.) Your objectives should be S.M.A.R.T.: specific, measureable, achievable, realistic, and time-specific. 
• Measures: After you define your business’ objectives, you need to focus on its measures. The measures help you determine whether you are on track to achieve your objectives (you can think of measures as KPIs). Each objective should have no more than three KPIs that indicate whether you will achieve your objective. Strong KPIs should be objective enough for you to determine whether the strategy is working, use language that everyone in your company understands, measure accomplishments, show success (not just a useless metric), be able to show change over time, and reduce uncertainty.
• Targets: You should write your targets so that they relate directly to each of your KPIs. For each KPI, you should have an associated value. Your targets should be ambitious but achievable. 
• Initiatives: In your BSC framework, your initiatives should be the action items and projects that you need to help your company succeed with its strategy. These projects have a start and end date. You should identify them when writing your BSC and set them up when implementing your BSC. Your initiatives mean the difference between your company’s reality and its stretch targets.  

Your scorecards can take on many shapes and designs, so you have the leeway to design a scorecard that reflects your unique company culture. You may also want to amend it to address the specific population that you’re serving. For example, a government organization serves customers, not citizens. You can simply adjust your wording to customize your scorecard. In addition, you may want to include your company logo and colors. A blank scorecard could look like this to start:

Here is an example of what a scorecard for a research company might look like:

The Purpose of a Strategy Map vs. a Balanced Scorecard

Many experts feel that a strategy map is just as important as a BSC (if not more so) in certain situations. Created by the same experts who created the BSC, a strategy map shows your company’s strategy-linked objectives. The difference between a BSC and a strategy map is that the strategy map shows the cause-and-effect relationship between the perspectives and the components. Together, the strategy map and the BSC help your company successfully execute your strategy. The two also speak to what you want to accomplish and how you plan to accomplish it. You can also use a strategy map on its own. The benefits of strategy maps include the ability to:

• Effectively capture and communicate your strategy
• Manage your team’s performance better
• Pinpoint your company’s focus, drivers, and choices
• Create a better BSC
• Take your focus from operations to strategy

Some experts recommend that you design your strategy map before you complete your scorecard. The ideal time to fill in the strategy map is after you have determined your BSC objectives but before you’ve filled in the measures. The same four balanced scorecard perspectives apply to the strategy map (financial, customer, internal business processes, and learning and growth). The primary difference here is that with a strategy map, you show the direction (causal relationships). For example, we could expand a portion of our earlier balanced scorecard for the research firm: 

The Balanced Scorecard in a Closed-Loop Management System

A closed-loop management system is a structure that uses feedback from the ongoing operations to improve processes. This feedback could be information from the same or from a different area of the value chain - either way, it helps to improve processes earlier in the loop. The system includes six stages:

• Strategy development
• Strategy translation
• Organizational alignment
• Operational planning
• Monitoring and learning
• Testing and adaptation of the strategy 

Robert S. Kaplan , co-creator of the balanced scorecard and Senior Fellow, Marvin Bower Professor of Leadership Development, Emeritus at the Harvard Business School, discuss using this closed-loop management system together with your company’s strategic planning and operations execution as a complement to the BSC. In other words, the closed-loop system constantly improves upon the strategic plan and the operating plan. As the BSC is a part of the management system, it continually improves upon that as well.

The History of the Balanced Scorecard

Experts consider the concept of the BSC in professional organizations one of the most significant management ideas of the past 75 years. First introduced in the early 1990s by Kaplan and David P. Norton (also of the Harvard Business School), professional organizations around the world use it today. The difference between the scorecard and other tracking mechanisms is that it combines financial and nonfinancial measures, where traditional measurers only track financial measures.

The first generation of the BSC was a 4 box approach . The four boxes included the same categories that they do now (financial, customer, internal business processes, and learning and growth). However, instead of possessing four components, this inaugural version of BSC simply recorded goals and measures for each perspective. This first generation showed causality, but organizations did not use the causality for any specific purpose. Many organizations still use first-generation scorecards as their model. 

Second-generation BSCs evolved because some professionals felt that the first-generation BSC descriptions were too vague and the interpretations too liberal. The changes were small but amounted to a new definition of a BSC. The authors added a more process-oriented method to determine the key measures. From the goals and measures recorded for each perspective, the authors added strategic objectives to better align with businesses’ own strategies. Finally, the authors added definite causal linkages between each perspective and component. 

The third-generation BSC was developed in the late 1990s., and is distinguished from the previous versions by its components and the design process. The new components of the third-generation BSC include a vision statement, definitions for the strategic objectives, targets for the measures, and the strategy map to go along with it, and the design process requires involvement from the company management. This is to ensure that the strategic objectives are cohesive and take primacy. 

Since the third generation was introduced, the concept has been expanded for nonprofit and public-sector entities, strategy and operations have been linked in a closed-loop management system, and strategy management has been developed.

The Future of the Balanced Scorecard

The biggest factor for the success or failure of a company’s BSC is always the leadership. Therefore, many BSC experts believe that the future will bring more research on what makes good leaders. Good leadership not only supports and grants buy-in on the development of the BSC, but also acts as its cheerleader, pushing its strategic objectives. 

Although the ability to evolve with modern management concepts has kept the BSC relevant, experts have suggested certain changes that may or may not be appropriate to your company’s particular makeup. One of these includes using predictive analytics alongside the BSC. Predictive analytics detect future trends in business and help leaders determine what KPIs can collect useful data. 

Ultimately, though, most of the experts say that the future of the BSC is based upon the individual industries: as industries evolve, so will their scorecards. For example, in the energy sector, the scorecards will look increasingly at more sustainable objectives. In the technology industry, the objectives on the BSC will include those more commonly seen in other industries. This will reflect the convergence of multiple industries and the concept of technology convergence.

The Popularity of the Balanced Scorecard

Even in its early iterations in the 1990s, the BSC was unsurpassed as a management tool. Today, remarkably, it is still the most popular performance management tool in companies worldwide, according to experts Darrell Rigby and Barbara Bilodeau . There are many different iterations of the BSC on the web. However, the purpose of the BSC is not just to fill in the blanks and post a piece of paper on the wall; rather, the BSC is a development process for your company. Designing it and filling it in is an exercise in evolving your business strategy. The early failures of the BSC were due to consultants who filled them in without insider business knowledge and stake. The beauty of the BSC is that it ties directly to strategy execution to align everyone in your company, provides transparency into company intent, and adapts to your business.

Information Technology and the Balanced Scorecard

Over the last few decades, Information Technology (IT) professionals have realized that a company’s IT strategy and business strategy must be aligned. We normally track five types of IT metrics on a company’s BSC. These metrics include:

• Financial Performance: This category reflects the spending on IT projects and service.
• Project Performance: This category looks for new funding streams from IT development projects and savings from IT improvements.
• Operational Performance: This category measures the higher-level view of IT operations, such as availability and outage length. It is not concerned with daily performance.
• Talent Management: This metric category evaluates how attractive the department is to new talent and how satisfied current IT staff are with their positions. 
• User Satisfaction: This category analyzes the user perspective, including how the customers of the IT department (such as the rest of the company) rate the department’s performance.

In the four perspectives, this translates to the following:

• Financial: Design metrics that show how IT optimizes its efficiency and how it enhances its impact on the business’ outcomes
• Customer: Design metrics that show quality service and give the business innovative solutions
• IT Internal Business Processes: Design metrics that show how IT maintains a reliable infrastructure, gives an effective support system, and offers and delivers transformative applications
• Learning and Growth: Design metrics that show how IT promotes a customer-focused culture, enhances its staff experience, and develops the IT staff competencies

Human Resources and the Balanced Scorecard

Human resources (HR) is another key department that you should align with the overall company strategy. HR scorecards should focus on leading indicators. In this way, you can bring in the staff you need and plan for the future of your company. Your HR scorecard should also identify what is doable vs. what is deliverable. The HR BSC follows much the same path as the overall company BSC since HR is a higher-level function within any organization. It should also utilize the same four perspectives:

• Financial: The metrics for HR should delineate return on investment (ROI), such as the cost per hire, the value-add per employee, and the cost of recruiting. 
• Customer: In the context of HR, this means the company’s employees and the potential employees. This set of metrics should look at how you are increasing the attractiveness of the company. This includes how satisfied your employees are, how many applications your company receives, how many applicants you reject, and how well the recruiting process works. 
• HR Processes: This is the row on the HR BSC that may look different from that on the traditional BSC. This section focuses mainly on how your business is improving its culture, how you are developing and retaining staff, and how you are attracting quality candidates. 
• Learning and Growth: For these metrics, you are looking at how you are developing your workforce, the techniques and training that can help you improve your processes, and whether there are technology purchases you should make to stay competitive.

Accounting and the Balanced Scorecard

Accounting firms are service-based organizations. Just like other service-based firms, they should analyze their operating goals and strategies on a regular basis to ensure that these two elements are moving in an intentional direction. However, in choosing metrics for their BSC, accounting firms should make sure the four perspectives deliver accounting-specific metrics to gauge their performance. For the four perspectives in this case, the metrics to consider during development are as follows:

• Financial: The metrics for accounting should consider your firm’s objectives and implement the tangible financial outcomes of your strategy. These may include fee revenues, professional salaries, margins, and reduced receivables. 
• Customer: This perspective should illustrate the way that your firm would satisfy its customers. Customers of accounting firms are generally looking for short job turnaround time and work well done. Your metrics can convey the status of these factors through the number of client complaints, referrals, and contacts per period. 
• Internal Business Processes: Most of your accounting firm’s internal processes are administrative. These may include metrics on the number of profitable projects, the new software you’ve implemented, the bidding estimates you’ve accepted, and utilization rates. 
• Learning and Growth: In accounting firms, your HR department is your biggest asset in developing your workforce. It can help you develop workforce plans to keep your staff up to date and competitive.

Who Develops and Uses a Balanced Scorecard?

Nonprofit and government industries were not able to use the early iterations of the BSC because those early versions were specific to customer-oriented industries. Now, any industry of any size can and should use the BSC. Even technology giant Apple, Inc. and the U.S. Government Office of Personnel Management (OPM) use the balanced scorecard approach. According to the Harvard Business Review , Apple’s five performance indicators are as follows:

• Customer satisfaction
• Core competencies
• Employee commitment and alignment
• Market share
• Shareholder value

High-level executive or division leadership teams should drive scorecard development. Without leadership buy-in, balanced scorecards will fail. Leaders should integrate strategic management approaches into their scorecards. Experts recommend a three-team approach for developing BSCs enterprise-wide. Each team should have specific experiences and competencies, and include people from the following groups:

• Upper-Level Management: Managers on this team should be strategic thinkers and have an overall understanding of the business. They should also be excellent communicators and able to make strategic business decisions. This is your general leadership team, sometimes known as executive sponsors .
• Mid-Level Management: Managers on this team should also be good communicators and well educated in the business. Additionally, it’s vital that employees respect these mid-level managers, as they will be the ones championing the BSC throughout the company. Lastly, they should be detail-oriented yet able to see the big picture. This team is your core team .
• Lower-Level Personnel: This team is capable of linking the material from the two other teams to their specific job functions. They should have a highly detailed understanding of these jobs and be able to come up with detailed metrics. This team is the measurement team .

The Balanced Scorecard Automation and Performance Analysis

Once you fill in your scorecard, there are many options for tracking including pen and paper, BSC-specific software, and generalized tools. The BSC was developed to be a performance management system. Many experts recommend that once you build your scorecard, you should automate it. This means finding performance management software that’s right for your company, or making use of software that you already have. The software takes your innovative BSC ideas and implements them evenly throughout your company. Many software packages can handle not only the BSC, but the strategic mapping as well. In bigger enterprises with multiple BSCs — one for the overall strategy and one for each division — software is a good way to keep them organized. Moreover, the software can help you coordinate the development, production, and distribution components across the entire company.

There are some benefits to automating your BSC with Microsoft Office products, such as Excel or PowerPoint. Most of your professional staff will already be comfortable working with these programs, so they can easily customize the software to the company’s needs. However, managing multiple documents from one reporting period to another may take some creativity, as that particular feature is not inherent in these programs. Furthermore, Microsoft products do not address the issue of version control, so you may have multiple iterations of your scorecards floating around between all of your users. 

There are applications that cater specifically to the BSC, so you don’t need to customize or program them. These apps can also manage multiple users, providing version control and tracking updates. And, they can generate the BSC-related reports and analytics that you need. Nevertheless, sometimes they are too specific and cannot be linked with your other business applications. Also, not all of these programs are intuitive, which can lead to the added expense of staff training. This is, of course, in addition to the cost of the software.  

Another option is a Business Intelligence (BI) solution. BI solutions are categories of software designed to analyze business data, not just collect it. This software captures your automated processes, and can generate real-time analytics. The upside of this type of software is that your data warehouse of analytics systems is probably already working with a BI solution. Therefore, you can store all of your data in one location. The downside of a BI platform is that your average user is not familiar with it (which again leads to the additional expense of outside experts). What’s more, BI reports for high-level staff are not easy to generate and typically do not include anecdotal or qualitative information. 

The Balanced Scorecard Benefits and Strategy

The biggest benefit of the BSC is that it brings together all of the disparate elements of your company tactics into one report. Since all the operational metrics are in one place, your executive management can see the sacrifices linked to each improvement. Other benefits include:

• Taking a vision and making it a reality
• Improving transparency within the company
• Ensuring your company has strategic priorities
• Making decisions using real-time data
• Managing the environment more effectively

You should build your BSCs in a cascading manner. This means that you are translating your overall corporate scorecard down the line to lower levels. This results in a clear strategy from top to bottom. As you descend the levels of your organization, your BSCs will reflect more operational and tactical, and less strategic, measures.

Building a BSC can be a challenging but worthwhile venture. You will start by prepping all of your materials, including your current strategic plans, financial plans, marketing plans, operating plans, annual reports, quality improvement programs, and customer analyses. You should also interview your executive management team repeatedly for their ideas (do this before you develop your BSC and as you get closer to completing it). Other sources of information should come from your industry’s competitive analyses, trend analyses, technology trend analyses, and marketing trend analyses. Once your team has gathered all the necessary information, they can follow the steps to design your BSC. We’ve already covered most of the steps, but their sequence is outlined below:

• Identify your company’s vision and mission.
• Develop a strategy with a customer-first lens.
• Develop objectives that expand on your mission statement.
• Perform your strategic mapping.
• Develop your performance measures.
• Develop projects that initiate performance accountability.
• Come up with a system to track your objectives and initiatives and report on them.
• Ensure your BSC’s cascade.
• Perform an after-action review of your process.
• Adjust your BSC regularly, based on your closed-loop feedback.

The following are our expert’s tips for managers new to developing BSCs.

Robert Key, Senior Project Manager and Agile Coach,  AMN Healthcare

Here’s what Key had to say about developing BSCs:

“My experience with the balanced scorecard comes from working as a project manager and Agile coach and teaching at the University of Phoenix and the University of San Diego. I have helped put together balanced scorecards for many different teams and taught strategic management courses. The main industries that I have focused on are education and healthcare recruiting.

“I often talk about a cartoon that I once saw. It was a CFO talking with a CEO. The CEO asks, ‘But what happens if we train them and they leave?’ when discussing their workforce. The sage CFO replies, ‘What happens if we don’t and they stay?’ To me this illustrates perfectly the importance of not ignoring the training and education piece of the scorecard (the learning and growth perspective). Many in management are fixated on the other quadrants, but managers, especially new managers, need to learn the value of training and educating their people. This is a cost center, but what happens when you remove training is that the morale crumbles. In lean financial times, this is usually the first thing cut. However, this defeats the purpose and does not save any money. This is the equivalent of stabbing yourself in the foot. In particular, new personnel who come in do so at a disadvantage, putting your whole organization at a disadvantage.

“If I had to advise managers new to the balanced scorecard, I would tell them to use Six Sigma techniques during design as needed, especially when developing the internal business process and customer sections. If you do the other three right, the finance part should follow easily. Choose executives carefully: your CFO and VP of Human Resources for your education section, your sales leaders and high-level reps for your business processes, and even IT for the customer section. Speak with anyone who faces and interacts with your customers, looking to get different scenarios and input on how we can work better. Consider performing surveys. Regarding the finance piece of the equation, if you do everything else right, finance should follow.

“I have really worked, even volunteered on my own time, to ensure that our workforce learns what they need to in order to be successful. I love to teach, and this comes out in all of the places that I work. It is because I have been so fortunate: I had amazing teachers who taught me the value of giving back. I have even hosted ‘lunch and learn’ sessions.   “Finally, you should not avoid any of the quadrants. You may not know the answers, but, if that is the case, you should seek input from other departments or resources. Don’t make it up on your own unless you know what you are doing and avoid external consultants. Internal consultants, if available, are your best bet because they know your business. If you must use an external consultant, use them for benchmarking after your analysis is completed.” 

Learn More About the Balanced Scorecard

The BSC was developed in the early 1990s. Since then, a multitude of resources has become available to show you how to develop your own BSC and put it to work for your company. However, the best resources are still the books by the original authors of the BSC. By reading and referencing these books, you can truly understand the design process as it was meant to be and achieve the best results for your company. These books include:

The Balanced Scorecard: Translating Strategy into Action , Kaplan and Norton, 1996. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment , Kaplan and Norton, 2000. The Execution Premium: Linking Strategy to Operations for Competitive Advantage , Kaplan and Norton, 2008. Strategy Maps: Converting Intangible Assets into Tangible Outcomes , Kaplan and Norton, 2003.  For nonprofits and government agencies, check out the following book on the BSC: Balanced Scorecard: Step-by-Step for Government and Nonprofit Agencies , Niven, 2003. 

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3 Balanced Scorecard Examples and their Application in Business

Before presenting Balanced Scorecard examples, it is important to understand the context and the concepts behind the management and monitoring tool created by professors Robert S. Kaplan and David Norton in their famous article in the Harvard Business Review 1992 entitled “The Balanced Scorecard: Measures that drive performance. “

At that time there was a perception that the benchmarking methods of organizations were becoming obsolete and inadequate. At the end of the professors’ study, rather than create a more appropriate method of enterprise performance measurement, they eventually developed an efficient support system for decision making, to aid strategic management.

One of the key points of the Balanced Scorecard was to expand the performance evaluation of prospects that have always been very focused purely on financial aspects.

Therefore, an example of Balanced Scorecard description can be defined as follows:

A tool for monitoring the strategic decisions taken by the company based on indicators previously established and that should permeate through at least four aspects – financial, customer, internal processes and learning & growth.

So the company has its measurement capabilities and expanded monitoring, allowing all relevant points of the supply chain to be measured. Also, It brings about significant improvements in the whole company’s understanding of their strategy defined by top management, which is assessed so that each employee is involved in the process. It’s done through the development of strategic maps .

Furthermore, in our balanced scorecard examples, there are some strategic maps, which become clearer as we summarize every organization’s method of performance measurement and the effect they have on the achievement of business objectives.

In the words of the professors themselves Robert Kaplan and David Norton:

“Balanced Scorecard communication happens through a logical structure, based on the management of established goals; enabling managers to reallocate physical, financial and human resources in order to achieve strategic objectives. More than a performance measurement tool, the Balanced Scorecard is a translator of strategy and a performance communicator. “

A good BPM system will always be a reliable ally in the monitoring, management, and assistance in decision making in your company.

See also: Process Performance Metrics: Learn about 10 of them here.

 Balanced Scorecard Examples: Defining the 4 Perspectives

The best way to define the objectives and their metrics for each of the perspectives are by answering a few questions. Note that there is an interconnected hierarchy ranging from financial goals (usually what the company wants to attain), through to internal customers, processes and then learning and growth which is the way to perpetuate long-term achievements.

Here’s an example of how to answer these questions.

Financial Outlook:

To succeed financially, how should shareholders view us?

An example answer could be: increase revenue and increase profitability. How to measure it? Through the financial statements.

Customer Perspective:

To achieve our vision, how should our customers see us?

Sample answer: we need to show the market that our products have superior quality compared to the competition. How to measure it? Through customer satisfaction surveys.

Internal Process Perspective:

To satisfy our customers, what business processes do we need to achieve excellence in?

Sample answer: we must achieve excellence in quality control and innovation. How to measure it? By the statistical analysis of consumer care service reports, social networks and review sites like “ Yelp “.

Learning and Growth perspective:

To achieve our vision, how will we sustain our ability to change and improve?

Sample answer: we must sustain our ability to change and improve through the intensification of training and qualification of employees. How to measure it? By verifying the number of hours spent in training and the number of certificates achieved by employees in outsourced courses.

• Kaizen Continuous Improvement Process: See how to use it in your business.
• The PDCA cycle: explaining the concept of process improvement.

3 Balanced Scorecard Examples

The development process of the Balanced Scorecard in a company involves several steps, which we have summarized here:

• Establish a clear vision of the future
• Define the strategic objectives
• Determine the critical success factors
• Choose indicators to measure and monitor performance
• Set goals, action plans, and initiatives

All 5 steps for each of the 4 perspectives.

These points, are only some aspects of how to set goals and choose indicators. What we would like to present now are 3 examples of strategic maps that are generated during the development of Balanced Scorecard projects, which summarize all of the work for the organization, including objectives, targets, indicators, and also the actions and initiatives that should be implemented.

1. Balanced Scorecard example: Strategic map for a Craft Brewery

2. Balanced Scorecard example: Strategic map for a Jewelry store

3. Balanced Scorecard example: Strategic map for an E-Commerce Business

The examples of Balanced Scorecards presented are entirely hypothetical and rather schematic. Usually, they may contain more initiatives for each objective, as well as more goals. The important thing is to understand the concept and how to use it correctly in your particular business.

Another important concept of Balanced Scorecards are the Critical Success Factors, and you can find more information in the video below.

Get to know other strategic management tools and advice:

• Understand the concept of BPM and its usefulness for your company.
• Implement corporate performance management in 7 steps.
• How to reduce operating costs in your business.
• How to perform step by step SWOT analysis.

18 Comments . Leave new

This is great, i have gotten some insight.

thank you for the comments

Thank you so much for your sample.

You are welcome

Concise, Well explained and understandable. Thanks

Thank you very much.

Thank you very much please contact me I Want o implement this strategy in the taxi industry Very conscice

This is good. But how an individual sets his KRA who is working in an industry say a refinery?

This was very helpful it is simple, clear and easy to follow.

Great. thanks for the explanation.

it is helpful. thanks

Tks for the example i think im doing well.

Well explained and it easy to follow. Thank you so much.

Thanks, helpful

Very helpful and simplified explanations to bring across the BSC concept, thank you.

this is very good, easy to understand and implement

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Balanced Scorecard Case Study

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What is it?

The Balanced Scorecard concept, popularised by Robert S Kaplan and David P Norton, is a performance management tool that encompasses the financial measures of an organisation and key non-financial measures relating to customers or clients, internal processes, and organisational learning and growth needs. It places these into a concise ‘scorecard’ that can be used to monitor performance.

Early implementations of the Balanced Scorecard tended to focus on including a balance of measures in the four domains

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8 Reasons Companies Don't Capture More Value

• Stefan Michel
• April 08, 2015

Putting the Balanced Scorecard to Work

• Robert S. Kaplan
• David P. Norton
• From the September–October 1993 Issue

Measuring the Strategic Readiness of Intangible Assets

• February 01, 2004

How to Implement a New Strategy Without Disrupting Your Organization

• From the March 2006 Issue

The Emerging Capital Market for Nonprofits

• Allen S. Grossman
• From the October 2010 Issue

The Balanced Scorecard: Measures That Drive Performance

• From the July–August 2005 Issue

Having Trouble with Your Strategy? Then Map It

• From the September–October 2000 Issue

Managing Alliances with the Balanced Scorecard

• Bjarne Rugelsjoen
• From the January–February 2010 Issue

The Best-Performing CEOs in the World

• Morten T. Hansen
• Herminia Ibarra
• From the January–February 2013 Issue

Lean Strategy

• David J. Collis
• From the March 2016 Issue

Using Scorecards for Governance in the Corporate and Public Sector

• September 29, 2008

Office of Strategy Management

• October 01, 2005

Using the Balanced Scorecard as a Strategic Management System

• From the July–August 2007 Issue

Measuring the Strategic Readiness of Intangible Assets (HBR OnPoint Enhanced Edition)

Coming up short on nonfinancial performance measurement.

• Christopher D. Ittner
• David F. Larcker
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Having Trouble with Your Strategy? Then Map It (HBR OnPoint Enhanced Edition)

• October 01, 2000

How To Measure Your Company's Risk in a Downturn

• December 19, 2008

Building a Game-Changing Talent Strategy

• Douglas A. Ready
• Linda A. Hill
• Robert J. Thomas
• From the January–February 2014 Issue

The Explainer: The Balanced Scorecard

• October 14, 2014

Saving Money, Saving Lives

• Jon Meliones
• From the November–December 2000 Issue

Fulton County School System: Implementing the Balanced Scorecard

• January 18, 2007

An Everyone Culture: Becoming a Deliberately Developmental Organization

• Robert Kegan
• Lisa Laskow Lahey
• Matthew L. Miller
• Andy Fleming
• Deborah Helsing
• March 22, 2016

First Community Bank (A)

• Rosabeth Moss Kanter
• January 18, 1996

Johansen's: The New Scorecard System-Southwest Regional Manager (Handout 4)

• Luann J. Lynch
• Jennifer Forman
• Graham Gillam
• May 27, 2014

Domestic Auto Parts

• June 03, 2005

AARP Foundation (A)

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7 Common Challenges of Implementing a Balanced Scorecard—and How to Solve Them

Heaven Schott

Heaven works on the customer success team, building relationships and ensuring our customers get the most out of their partnership with ClearPoint.

Struggling with balanced scorecard implementation? Discover 7 common challenges, from data management to version control, and learn how software solutions can help.

Table of Contents

The balanced scorecard is a proven strategy management tool but implementing it effectively can come with its own set of challenges. Many organizations attempt to manage their balanced scorecard using spreadsheets, but these tools can quickly become a bottleneck. Below, we’ll outline seven common challenges you might face when implementing a balanced scorecard, especially if you're relying on Excel or other spreadsheets.

1. Data Management Becomes Overwhelming

As your balanced scorecard evolves, so does the amount of data you need to track. While Excel works for small-scale projects, handling complex data sets across multiple business units and departments is a recipe for chaos.  

For instance, imagine your company is rolling out a balanced scorecard across five departments using Excel. Each department is tracking their own key performance indicators (KPIs) within their own spreadsheets. Consolidating this data will likely take hours of manual work each month, leading to missed deadlines, incomplete reports, and untapped insights.

2. Version Control Nightmares

One of the biggest issues with using Excel for strategic management is version control. As multiple team members work on the scorecard and files are being emailed back and forth, you will quickly end up with several versions of the same file, creating inconsistency and confusion.  

3. Difficulty Tracking Progress Over Time

Spreadsheets are like snapshots—they capture data at a single moment, but they lack the ability to show you the full picture of how your strategy is evolving over time. Without the proper tools in place, tracking progress becomes like flipping through a scrapbook with pages missing. You might see key results from last quarter, but connecting that data to where you are today, with the initiatives that were impactful, and the critical trends you’re experiencing— is difficult, to say the least.

It's important to have a dynamic way to track strategy execution and see how your performance is evolving over time.  

4. Collaboration and Communication Break Down

Cross-departmental collaboration is often inefficient when implementing a balanced scorecard at an organization. One of the primary functions of the balanced scorecard framework is to create alignment across departments, so that everyone at the organization is contributing to a shared mission and vision. However, when teams are managing separate scorecards and utilizing different formats, their goals may be misaligned with the overall objectives.  

Without clear communication channels, teams may implement conflicting, redundant, or unproductive projects and initiatives.  

5. Manual Data Entry Leads to Errors

Relying on manual data entry in Excel is risky—especially when the balanced scorecard involves pulling data from multiple sources. Errors are bound to occur, and even a small mistake can throw off your entire performance management process. Not to mention the process of tracking down errors can cost you time, money, and credibility .

6. No Real-Time Reporting or Dashboards

As we continue to see shifts in technology and consumer behavior, companies are expected to remain agile and adaptable to see on-going success. Excel can be a powerful tool for analyzing historical data, but it lacks real-time reporting features. Without real-time data, you can’t make informed decisions on the fly, and your balanced scorecard will quickly lose its effectiveness as a strategic management tool.

7. Lack of Scalability

Picture this → A fast-growing retail chain had initially used Excel to track store-level performance against corporate goals. However, as they expanded to 50+ locations, the manual process of consolidating scorecards became overwhelming. Excel couldn’t handle the volume of data required, and the team had no way to effectively compare store performance across regions, making strategic decision-making at the corporate level nearly impossible.

As your organization grows, so do your data needs. Excel and other spreadsheets simply aren’t built to handle large-scale data management across multiple teams or business units. What works in the early stages of scorecard implementation can become unsustainable as you scale up.

Why Software is the Key to Overcoming These Challenges

The limitations of Excel and other spreadsheets make it clear that they aren’t suitable tools for managing a balanced scorecard in the long term. Investing in Balanced Scorecard Software , on the other hand, can help to solve these exact challenges. Here’s how it addresses the most common issues:

• Automated Data Collection : No more manual data entry or error-prone updates. Software pulls data from your existing systems and automatically updates your scorecard.
• Single Source of Truth : Everyone works from the same real-time data , eliminating the confusion and errors caused by multiple versions of spreadsheets.
• Real-Time Tracking and Reporting : You can track performance live and access dashboards that provide instant insights , helping you make informed decisions quickly.
• Collaborative Workflows : Teams can easily collaborate and update their progress in a centralized platform, reducing communication breakdowns and ensuring alignment across departments.
• Scalability : Whether you’re managing a small team or a multi-departmental enterprise, software grows with you and handles complex data with ease.
• Historical Data Tracking : Unlike static spreadsheets, software allows you to track performance trends over time , providing insights into long-term progress and enabling agile adjustments to your strategy.
• Data Visualization : Software offers rich data visualizations —graphs, charts, and dashboards—that make it easy to understand complex data at a glance, giving leadership clear and actionable insights.
• AI-Powered Analytics : Advanced software platforms leverage AI to detect patterns and forecast trends, helping you proactively address potential issues, make real-time recommendations, and optimize your strategic plans.

Balanced scorecard software helps to make collaboration smoother, inform decisions quicker, and improve overall strategy execution.  

Why ClearPoint is the Best Solution

ClearPoint Strategy eliminates the common pitfalls of using spreadsheets to manage your balanced scorecard. By providing an all-in-one platform for data tracking, real-time reporting, and collaborative scorecard management, ClearPoint makes it easier to execute your strategic plan and track your results. With automated data entry, robust dashboards, and seamless version control, ClearPoint is designed to help you overcome the challenges that Excel and spreadsheets simply can’t address.

Ready to streamline your balanced scorecard and improve your strategy execution? Demo ClearPoint Today!  

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