The balanced scorecard was originally developed by dr. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. The strategy map allows companies to describe the links between intangible assets and value creation so all aspects of strategy can be implemented in a. Nortons concept of the balanced score card revolutionized conventional thinking about performance metrics. Mapas estrategicos kaplan y norton libro estrategia empresarial. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Norton 35 using the balanced scorecard as a strategic management system by robert s. Linking the balanced scorecard to strategy robert s. The key problem that kaplan and norton identified in the business of the day was that many companies tended to manage their businesses based solely on financial measures. Commentary transforming the balanced scorecard from performance measurement to strategic management. Using the balanced scorecard as a strategic management system by robert s. Focusing your organization on strategywith the brilliant. Norton 2001 transforming the balanced scorecard from performance measurement to strategic management. David norton as a framework for measuring organizational performance using a more balanced set of performance measures.
Although the previous book of kaplan and norton already spent 64 pages on strategy maps, you can find the best and most comprehensive treatment of them including lots of examples in the book on the right. Executives also understand that traditional financial accounting measures like. The balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past. The balanced scorecardmeasures that drive performance. Kaplan is a professor at harvard university and david p. In many cases, it is a rehash of the other kaplan and norton works.
Commentary transforming the balanced scorecard from. Strategy mapping was developed by kaplan and norton as an extension to the balanced scorecard and to make implementations of the scorecard more successful. The balanced scorecard retains traditional financial measures. Within a decade, a majority of the fortune companies was implementing or had already implemented the bsc hendricks. Transforming the balanced scorecard from performance. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in longterm capabilities and customer relationships were not critical for success.
Norton 19 measuring the strategic readiness of intangible assets by robert s. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve. A critique of the balanced scorecard as a performance. Using the balanced scorecard as a strategic management system.
Norton, recently wrote an article, the future of the balanced scorecard. At the head of the strategy map is the overriding objective of the organisation which describes how it. Translating strategy into action kindle edition by kaplan, robert s. I have excerpted below their five futures expansions. Traditionally companies used only shortterm financial performance as the measure of success. In this article, kaplan, of harvard business school, and norton, founder and director of the palladium group, explain how to effectively manage both strategy and operations by linking them tightly. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. What follows, provides guidance and advice on the development and implementation of a balanced scorecard for those organisations considering the introduction of a. The balanced scorecard measures that drive performance by robert s. Palladium strategy management training is built on the foundations of our thought leadership dr kaplan and dr norton and the management frameworks developed by them balanced scorecard, strategy maps and the xpp. Pdf mapas estrategicos kaplan y norton libro estrategia. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. Kaplan and norton describe the innovation of the balanced scorecard as follows.
This is the most important perspective of the balanced scorecard since it is the measurement basis of all the others. Using the balanced scorecard as a strategic management. Kaplan is the arthur lowes dickinson professor of the complexity of managing an organization today accounting at the harvard business school. The creators of the strategy map and balanced scorecard concept, professors robert s. It combines education, real world experience and certification to enable professionals in both public and private sectors to make strategy happen. Kaplan has 71 books on goodreads with 35251 ratings. Senior executives understand that their organizations, measurement system strongly affects the behavior of managers and employees. Conceptual foundations of the balanced scorecard 3.
Kaplan joined the hbs faculty in 1984 after spending 16 years on the faculty of the business school at carnegiemellon university, where he served as dean from 1977 to 1983. Norton, have created a powerful new tool based on their ongoing research. The scorecard measures organizational performance across four linked perspectives. Kaplan and nortons balanced scorecard approach encourages businesses to analyse and report performance based on four key perspectives financial, customers, internal.
The strategyfocused organization servicing companies. Balanced scorecard basics communicat business systems. In a previous paper kaplan and norton 2001b, we described the role for strategy maps and balanced scorecards to develop performance objectives and. Various sources have reported implementation failure rates at between 60 and 90 percent. The balanced scorecard bsc translates an organizations mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system. The balanced scorecard measures that drive performance. Norton april 2005 organizations often fail at strategy execution. The strategyfocused organization the summary in brief in 1996, robert kaplan and david norton introduced the balanced scorecard performance measurement method, which included not only traditional financial measures but also such qualitative measures as employee satisfaction, corporate mission and customer loyalty. Use features like bookmarks, note taking and highlighting while reading the balanced scorecard.
Kaplan and norton developed the concept of the balanced scorecard bsc in 1992. The balanced scorecard was developed in the early 1990s by two guys at the harvard business school. The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 putting the balanced scorecard to work a list of related materials, with annotations to guide further. Creating the office of strategy management robert s. Kaplans most popular book is the balanced scorecard. Balanced scorecard basics balanced scorecard institute. By translating their strategy into the logical architecture of a strategy map and balanced scorecard, organizations create a common understandable point of reference for all their units and employees. The article was based on a multi company research project to study performance measurement in companies whose. During the past 30 years, much attention has been focused on how companies can formulate new strategies for sustainable advantage. Financial objectives should be linked to the one corporate strategy with a strong emphasis on the causeandeffect relationships that every change can have. The ones marked may be different from the article in the profile. Kaplan is baker foundation professor at the harvard business school.
The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. In addition, it can help provide information on the chosen strategy more. More strategic management and corporate finance models. A bain consulting study of large companies in eight industrialized countries found that seven out of eight companies. Kaplan accounting, harvard and norton, president of renaissance solutions inc. The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 using the balanced scorecard as a strategic management system. Putting the balanced scorecard to work by robert s. In this first of two articles on strategy development, adapted from kaplan and nortons. This cited by count includes citations to the following articles in scholar.
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