Business Process Management and the Balanced Scorecard: Using Processes as Strategic Drivers

Chapter 5. Balanced Scorecard and Strategic Initiatives

The Balanced Scorecard (BSC), like the strategy map, is a tool popularized by Robert Kaplan and David Norton in their series of Harvard Business Review articles and books beginning in the early 1990s. The scorecard has gained in popularity over the years and is still seen as a value-added concept almost 15 years after its inception. This certifies that using the Balanced Scorecard has moved beyond fad status and become a popular and accepted business practice. In this chapter the scorecard definition will be presented, followed by examples and an explanation of scorecard development and use. Because strategic initiatives should be identified in parallel with measurement identification, a section on initiative development will follow the discussion of scorecard creation.

Definition

A Balanced Scorecard is a management tool that provides senior executives with a comprehensive set of measures to assess how the organization is progressing toward meeting its strategic goals.

There are several important aspects of the definition. The first is that the scorecard is a management tool. There are typically two levels of use of a BSC within an organization. Level one is when the scorecard is new and the management team is still trying to figure out how to integrate it into their decision-making system. At this level the scorecard is used by the management team in basically the same way a student views his or her report card in school. The ...