An integrated control system developed by Kaplan and Norton to map and control the implementation of business strategy through it's component strategic and operational metrics. This ensures organisational focus, in what is largely real-time, and hence the successful implementation of the strategy. The Scorecard provides an easy to understand and easy to communicate system of four functional pillars called "perspectives" that provide the foundation for objective and metric determination. These Perspectives are Customer, Internal Process, Financial, and Learning and Growth.
Perspectives are the pillars that support your strategy and historically consist of four components: Customer, Internal Process, Financial, and Learning and Growth. Businesses are not limited to these four and these four perspectives may not be suitable to the strategic tact of your organisation. Further there is an assumed equal weighting of the perspectives which may conflict with resource allocation initiatives of some organisations. The Balances Scorecard is dynamic and accordingly can be adjusted to suit the needs of your strategy. Perspectives provide the "header" for drill down development of objectives and metrics.
From the Perspective base, objectives are derived to ensure the perspectives are maintained within the confines of organisational strategic intent. Again they can be weighted to assign levels of importance and subsequently drilled down to the key metrics that support them.
Vision, Mission, Business Concept.
To most minds the terms are interchangeable but each does in fact have specific functionality, "words are important" They provide the overall tone, structure and direction of an organisation and usually form part of the Balanced Scorecard as both a reminder and a focus for report purposes. They should be short yet comprehensive enough to impart an image of what the organisation should look like to the reader.
The identifiable measurement activities that must be undertaken, recorded and monitored to ensure objective realisation. They can be financial or non financial and these metrics provide the checking system that highlights variances from expectations as a means to action.
Initiatives are the resultant output from the strategic planning process. They are the "To Do" items that, if correctly implemented, will result in realisation of the strategy. . Quite often the initiatives created during the strategic planning process can be many in number. Many things that need to be done generally don't get done. Focus and manageable critical issues need identified for implementation. They need to be filtered and prioritised
A key visual concept within the Balanced Scorecard that illustrates Perspectives and Objectives, and the relationships that exist between them. A great visual aide for communicating direction, areas of focus and relationships.