Balanced Scorecard (BSC) Online Training Course
A business is a complex machine. It’s got a lot of parts that need to work together. If one part is out of sync, it affects the whole business’s operation.
As a leader, it’s your job to manage those moving parts. There are plenty of management systems out there. But for my money, the best is the balanced scorecard.
Balanced scorecard (BSC) takes a holistic approach to organizational management tools. Rather than focusing solely on financial performance or operational results, the balanced scorecard combines a variety of performance measures.
In this blog, I’ll provide a brief overview of balanced scorecard systems. If you’re interested in learning more about balanced scorecard concepts and best practices—and how to turn theories into action plans—check out my online training course here.
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What is the Balanced Scorecard?
BSC was developed by experts Dr. David Norton and Dr. Robert Kaplan of Harvard University in the early 1990s. They introduced this approach to performance measurement through a series of books and Harvard Business Review articles offering case studies from a variety of industries.
Since then, BSC has revolutionized strategic management practices. For Fortune 500 companies, nonprofit organizations, for-profit companies, government agencies and the public sector, BSC has become a cornerstone of strategic planning, driving sustainable growth, and fostering continuous improvement. Balanced scorecard planning is one of the most influential business ideas of the last several decades.
The balanced scorecard approach moves beyond traditional financial measures. It's a strategic management system designed to align organizational activities with strategic objectives. By integrating metrics across four key perspectives—financial, customer, internal processes, and learning and growth—BSC provides a comprehensive view of organizational performance.
Why use the Balanced Scorecard?
The balanced scorecard methodology is a versatile strategic management tool and performance management tool that can be applied to any corporate strategy and scale to any organizational capacity.
Emphasis on the customer
David P. Norton and Robert S. Kaplan place an emphasis on the customer in defining the strategy of the organization. To cultivate growth perspectives within your organization, you need to define your customer in high definition. You need to know them and what drives value to them. And you need to keep up with them as industries, markets, and people change. This emphasis on customer service is a key benefit of BSC.
Balanced scorecard is bottom up
Balanced scorecard is not an order sent from on high by the management team. Rather, it’s a systematic approach to evaluating various internal business functions from the bottom up to drive business performance and achieve financial goals.
One system of record
Balanced scorecard is a management framework that can be applied to the entire range of your business. Everyone works off the same methodology. This shared approach to long term organizational success creates accountability, and is a powerful tool for ensuring that financial resources are deployed in alignment with the company’s strategic direction.
The Four Perspectives
The balanced scorecard framework focuses on four perspectives that provide a comprehensive program of key performance indicators across business units. BSC is about more than financial results in the here and now. It’s oriented toward drivers of future performance. Kaplan & Norton’s experience working with senior executives from various industries helped them understand how internal business processes can align with an organization’s overall strategic goals.
The four different perspectives are:
Financial Perspective: Focuses on financial metrics such as revenue, profitability, and cash flow.
Customer Perspective: Measures customer satisfaction, retention, and loyalty to drive long-term success.
Internal Processes Perspective: Evaluates the efficiency and effectiveness of internal operations and processes.
Learning and Growth Perspective: Assesses the organization's capacity for innovation, learning, and employee development.
Making Strategic Plans with Strategy Mapping
Strategy mapping is a key first step in the BSC. In order to figure out what you’re going to measure (and how), the first thing you’ve got to know is where you’d like to go and what success would look like.
Strategy mapping will help you learn to translate strategic objectives into actionable initiatives. By visually depicting the cause-and-effect relationships between objectives, measures, targets, and initiatives, strategy maps provide a roadmap for strategy execution and alignment.
The visual component is important here. Don’t limit your strategy to fancy-sounding vagaries in a fancy deck of slides. Literally map it out visually and don’t be afraid to get a little messy along the way. That’s a part of the process. Taking this step will help you think things through and give you a more robust understanding of your goals and objectives.
The Pros of Balanced Scorecard
Communication: BSC improves communication of the organization by focusing on developing and implementing a clear, overall strategy.
Alignment: BSC helps align departmental and personal goals with the organization’s strategy.
Long-term goals: BSC’s focus on strategic measures is a useful tool for evaluating how budget allocations align with business strategy.
Strategic framework: BSC provides a single reporting mechanism, helping the organization increase focus.
Strategic initiatives: BSC provides a competitive advantage by identifying the most important strategic initiatives for the business.
The Cons of Balanced Scorecard
Takes time: Implementing BSC can take weeks or even a year, depending on the scale and complexity of the organization.
Requires commitment: Senior management needs to buy in to BSC.
Internally-focused: BSC may ignore the macroeconomic picture around the business, and it may not be adaptable in tough economic times.
Regular updates: BSC relies on regular data collection and up-to-date information.
Dedicated resources: BSC requires time, resources, and coordination from different departments.
Training and Certification
Whether you’re looking to dip your toe or dive in with a full Balanced Scorecard certification program, you’ve got options. The George Washington University Center for Public Leadership, part of the College of Professional Studies, offers two levels of certification: the Balanced Scorecard Professional (BSP certification) and the Balanced Scorecard Master Professional (BSMP certification). Likewise, the Balanced Scorecard Institute offers BSP certification at both levels as well as consulting and other services.
Online Course
Learn more about the balanced scorecard model with my online course!
This comprehensive scorecard training is easy to follow, self-paced, and walks you through everything you need to know—from strategic thinking, team formation, target setting, communication rollout plans, successful implementation, and other scorecard topics. The course includes a balanced scorecard template to help you set up your business for financial success.
The online course is based on my corporate experience on two leadership teams utilizing Balanced Scorecard and my executive coaching expertise partnering with a variety of business leaders on strategic planning.
About The Author
Emily Sander is a C-suite executive turned leadership coach. Her corporate career spanned Fortune 500 companies and scrappy start-ups. She is an ICF-certified leadership coach and the author of two books, An Insider’s Perspective on the Chief of Staff and Hacking Executive Leadership.
Emily works with early to senior executives to step into effective leadership with one-on-one coaching. Go here to read her story from seasoned executive to knowledgeable coach.