The balanced scorecard is a strategic management tool that provides a holistic view of an organization's performance by considering multiple dimensions. It goes beyond financial metrics alone and includes other critical aspects. Let's break down each perspective:
* Finance: This perspective focuses on financial performance and shareholder value. Metrics related to revenue, profitability, return on investment, and cost control fall under this category.
* Customers: Customer satisfaction, loyalty, retention, and market share are essential metrics in this perspective. Understanding customer needs and delivering value to them are key objectives.
* Internal Processes: These metrics assess the efficiency and effectiveness of an organization's internal processes. Examples include cycle time, quality, productivity, and process improvement initiatives.
* Learning and Growth: This perspective emphasizes the development of employees, organizational culture, and innovation. Metrics related to employee training, skill development, and adaptability are relevant here.
The balanced scorecard encourages organizations to consider both short-term financial goals and long-term strategic objectives. By measuring performance across these dimensions, organizations can make informed decisions and drive continuous improvement.
References:
* The ASQ Certified Manager of Quality/Organizational Excellence Handbook, Fifth Edition2.
* ASQ Quality Resources: Balanced Scorecard1.