MODEL 58

KAPLAN AND NORTON: THE BALANCED SCORECARD

Use this to help you align the organisation’s budget with its strategic plan.

Robert Kaplan and David Norton’s Balanced Scorecard Model (BSM) seeks to address the problem that an organisation’s budget is seldom fully aligned with its long-term strategic plan/vision. This is because too much emphasis is placed on finances and not enough on non-financial factors.

THEY LIST THE THREE MOST IMPORTANT NON-FINANCIAL FACTORS AS THE ORGANISATION’S:

1. Relationship with its customers

2. Key internal processes

3. Learning and growth strategy

When these areas of the organisation are added into the equation, managers find that their perspective of what the organisation is and does changes. No longer ...

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