The concept of developing a different approach to measure if strategies and practices are in line with the company ‘s objectives can be traced way back in 1992 when Dr. Robert Kaplan and Dr. David Norton introduced the balanced scorecard to the world. Today, a lot of companies, corporate and non-corporate, ranging from small business to large corporations, are adapting the principles of balanced scorecard and with the process use of resources and strategies, resulted to favorable outcomes. To help organizations be guided in developing a balanced scorecard, Kaplan and Norton defined four easy steps to be followed.
First, the organization should come up with a measurement architecture to define a more manageable approach in applying the balanced scorecard concept on all levels of the organization.
Second, the organization must specify their strategic objectives. But then again, it would be best to make feasible strategic plans than making complex ones so as to prevent false expectations.
Third, there is a need to choose strategic measures. Every organization has their own set of strategies and objectives linked with different set of metrics to measure progress. Being more specific with these metrics is therefore needed to clearly define success on each strategy.
Lastly and most importantly, develop an implementation plan with target values assigned on every measure. Every employee should be aware of these targets and develop an information system that links top level metrics to lower level operational metrics. The balanced scorecard should then be integrated in the company ‘s management system and results always lead to process improvement as development of better strategic plans should be forecasted in the near future.