Linking the Balanced Scorecard to Strategy

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The Balanced Scorecard was developed to measure both current operating performance and the drivers of future performance. Many managers believe they are using a Balanced Scorecard when they supplement traditional financial measures with generic, non-financial measures about customers, processes, and employees. But the best Balanced Scorecards are more than ad hoc collections of financial and non-financial measures. The objectives and measures on a Balanced Scorecard should be derived from the business unit's strategy. A scorecard should contain outcome measures and the performance drivers of those outcomes, linked together in cause-and-effect relationships.
Source: Robert S. Kaplan and David P. Norton, California Management Review Vol. 39, No. 1 (Fall 1996)
Subjects: Article Summaries, Strategy/Frameworks
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