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Balanced Scorecard (BSC) is a balances set of performance measures along4-perspectives; Financial, Customer, Internal Business Process, and Learning & Growth. BSC development is a3-step process.1) Based on Vision and Mission, a company decides some strategy. Listing down all those strategic objectives along four perspect.2) Developing a Strategy Map where mapping the strategic objetives listed in step1 in a cause & effect relationship along4 perspectives. How one strategic objective cause improvement in another objective in same/ another perspective.3) Developing SMART performance measures for each strategic objectives. Measures can be financial/ non-financial, leading/ lagging, drivers/ outcome, qulitative/ quantitative etc.
In essence, Strategy Map helps in developing casue and effect relationship among strategic objectives and then full fileged BSC with performance measures along4-perspectives. This is3rd Generationof BSC.
Strategy Map is the pictorial representation of organisation strategic objectives and their linkages.
Balanced Score Card is the tool used to percolate strategy in the organisation.This is derived out of strategic objectives depicted in strategy map. BSC will have measures under four perspective: Finance, Customer, Internal Process and people. Tracking these key measures which are both lead and lag measures, ensures strategic objectives are achieved, there by achieving organisation vision and mission
Balanced Score Card was organized by Kaplan and David Norton as a performance measurmenet tool that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance, and in order to ensure that the organization's performance is aligned with the organizational strategy as well.
The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
BSC is simply a connection between the stackholders who depends on the people capability to deliver the best of quality to satisfy customers and that by development and learning.....
and by that achieving the stated strategy.....
In a typical strategic map, you basically relate strategic objectives with perspectives and strategic themes. And then you plot dependency or cause and effect relationships between strategic objectives. This gives a single screen view of how you objectives for learning and growth can support your objectives for operational excellence which can then help your customer objectives to finally help your financial objectives.
If done properly, it can be a very wonderful representation of strategy execution.
Strategy map is the teaser document that includes the strategic objectives & plan headlines in brief from the four perspectives to assure the documentation of the BSC so it's easier to measure the balance periodically !
Actually the strategy map is a newer step or version of BSc sometimes called the3rd generation of BSc , which illustrate the linkage between objectives each others , the objectives also are allocated per the4 perspectives, for example training middle managers at L&G prospective leads and link to customer satisfaction objective in the customer prospective , and so on...
