Have you heard about the balanced scorecard? If yes, then you should know by now that it is a strategic planning and management system that is used by most businesses and industries nowadays. The concept was originated from Dr. Robert S. Kaplan and Dr. David P. Norton in the early 1990s and since then, even Fortune 1000 firms got hooked and implemented it on their business operations. So how does it work?
To develop a more robust plan in identifying what should be done and measured, the balanced scorecard concept suggests that an organization should be viewed from four different perspectives. These are the following: (a) The Learning and Growth Perspective; (b) The Business Process Perspective; (c) The Customer Perspective; and lastly (d) The Financial Perspective.
The Learning and Growth Perspective focuses on the key people in the organization, that there is a need to invest on training to develop the needed skills and corporate cultural attitudes to support business functions.
The Business Process Perspective is concerned about the processes and activities that are required for the company to excel in meeting the needs and demands of customers in a more efficient and productive manner.
The Customer Perspective is more of understanding customer value. It measures the value given to customers and the quality, time, and cost it takes to deliver expected outcomes.
The Financial Perspective determines if the strategic execution and implementation of plans are contributing to the improvement of company. It concentrates on the development of objectives and initiatives to meet certain targets that will reflect the company ‘s commitment to shareholders.