The Balanced Scorecard of Robert Kaplan and David Norton

The Balance Scorecard was developed by Robert Kaplan and David Norton as a performance measurement system that covered finances, customer relations, the business procedures and processes, and the learning experience and growth. The framework basically depicts these four processes as interrelated and interdependent.

A typical example of how to apply the Robert Kaplan Balanced Scorecard is when a business establishment decides to stop after sales support and increase sales output and earnings. While this may result in a fairly good business, this will not necessarily be a good long-term business solution because the company lacks customer service and satisfaction. The Balanced Scorecard will deal with this problem by balancing the business strategies of the business in order to achieve a correlation between finance, customer service, business process and learning perspective.

The Balanced Scorecard by Robert Kaplan and David Norton changed the way business processes were approached. They state that in this modern age of information technology, the focus is no longer on the properties, equipment, and the finances of the company but it focuses rather on the customer relationships, innovative and creative processes and strong human resources.

A strong human resource with a hunger for learning and growth will definitely lead to a better business relationship with the customers. Customers will of course value this extra special business relationship which in turn will lead to a stronger financial output. With better finances, employees will further want more learnings and the cycle continues. This is basically the concept of a Balanced Scorecard.

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