Balanced Scorecard

I have been interested in and have been using a balance scorecard since 2006.  I was taught about balance scorecards by a professor at the University of Chicago School of Business.  I took some Executive education courses.  This professor studied under Robert Kaplan (The person that developed the Balance Scorecard approach) in the late 70s and early 80s.   The story he told us was that prior to the balance scorecard companies were measured mostly by their financial statements.  If they were profitable they were considered good and if not they were not good.  They began to wonder if there was a better way to measure a company.  Good financial performance today does not ensure stable financial performance in the future.  However, if the company had a set of broader measurements not only could you understand the health of the company today it would also keep you informed about the trends that would predict future performance.  So hence the Balance Scorecard was developed.  The balanced scorecard is used to monitor and track four areas of company performance.  The four areas are financial, customer, internal processes, and learning and growth.  You can imagine also by the name scorecard that its design is to track a score associated to specific measurements. In other words, we want to keep score!  So the four areas provide the "balance" and the targets and measurements provide the "score." 
An example is that a training team tracked student satisfaction in their in-house Instructor-led training programs.  This fits under the customer category and they placed a target of 91.25 out of 100 as their goal.  Each month they would report as one of the items on their balance scorecard the student satisfaction rating.  This helped management know monthly if the trend was toward increased student satisfaction or decreased student satisfaction or if student satisfaction was flat. 
Well, I hope you have enjoyed this brief overview of the Balance Scorecard.  Please feel free to comment or ask question. test