Balanced Scorecard

Description: 

A balanced scorecard provides a way to look at an organization from four perspectives by developing benchmarks and collecting and analyzing data relative to those perspectives. The four perspectives are:
1) financial,
2) customer,
3) internal business processes, and
4) learning and innovation.

Uses: 

When evaluating whether current practices meet the customer or organizational needs.

When determining how to measure and monitor improvement efforts, during either an initial trial or standardization.

When creating goals for improvement and determining how those goals will be met.

When determining areas for improvement.

How do I use this tool?: 

1. COME TO A CONSENSUS ON THE ORGANIZATIONAL STRATEGY AND VISION.

2. CONSIDER WHAT EACH OF THE FOUR PERSPECTIVES MEANS for the organization: customer, internal business, innovation and learning, and financial. Add any perspectives if you determine you need one. If the names of any perspectives need to be changed so they are more relevant or meaningful to your organization, change them.

3. For each perspective, CHOOSE AT MOST FIVE MEASURES to indicate progress toward achieving the organization’s strategy.

4. For each measure, CHOOSE AMBITIOUS TARGETS. Targets should be selected that will move the organization towards its vision when they are achieved.

Expertise Required: 
Users of this tool usually have some training or experience in its use.
Advantages: 

Helps an organization avoid making improvements in one area that will negatively affect the organization in a different way.

Allows groups to think about the ideal way to accomplish a goal given the organization's vision.

Focuses strategy.

Disadvantages: 

May be difficult to develop measures for each of the necessary four perspectives.

Where can I go to learn more?: 

Yeager K. Establishment and utilization of balanced scorecards. In: Roberts A, Yeager K, editors. Evidence-based practice manual: research and outcome measures in health and human services. New York, NY: Oxford University Press; 2004. p. 891-6.

Scheele K. Too many projects, too little time: how strategic planning helped us focus. 17th Annual Society for Health Systems Management Engineering Forum; 2005; Dallas, TX; 2005.