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Management with Metrics: Understanding the Balanced Scorecard

Strategy is a crucial component in business.  When it comes to Management with Metrics, customer strategy is the starting point according to the Darton Group.  Balanced Scorecard planning is one of the best ways for leaders to identify and manage strategy.  The Balanced Scorecard is a strategic management approach that “provides a clear prescription as to what companies should measure in order to ‘balance’ the financial perspective.”  Drs. Robert Kaplan and David Norton, the developers of the approach to translate visions into actions:

<p>Kaplan and Norton describe the innovation of the balanced scorecard as follows:

“The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.”


Total Quality Management and other previous management ideas are at the heart of the Balanced Scorecard methodology.  This includes concepts such as customer-defined quality, continuous improvement, employee empowerment, and measurement-based management and feedback.  In short, the Balanced Scorecard should guide you in the proper direction for running a business.


Remember, a Balanced Scorecard is by no means a final step.  Rather, it is part of a process to increase performance.  When you have reached a goal or victory, you should move on to the next one.  Make the Balanced Scorecard work for the good of you and your organization.

About Anne Grybowski

Anne is a former staff writer for CAI's Accelerating IT Success, with a degree in Media Studies from Penn State University.

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