Last updated on : March 3, 2022
The balanced scorecard strategy addresses one of business's most persistent challenges: turning strategic vision into measurable results. Created by Robert Kaplan and David Norton in 1992, this framework emerged from research showing that nine out of ten organisations fail to execute their strategies effectively.
A balanced scorecard is a tool for strategy that extends beyond traditional financial metrics. Rather than focusing solely on profit and revenue, the balanced scorecard approach to strategic planning considers multiple dimensions that drive sustainable success. It translates an organisation's vision and strategic objectives into actionable performance indicators across four interconnected perspectives: financial, customer, internal processes and learning and growth.
In summary: Balanced scorecard strategy creates a clear line of sight from your organisation's vision to daily operations through measurable objectives that balance short-term results with long-term capability building.
Despite newer frameworks like OKRs and agile methodologies, balanced scorecard strategy remains uniquely relevant because it provides comprehensive strategic context. Organisations using this framework report 12-36% improvement in overall performance within the first two years.
The balanced scorecard framework helps organisations:
What is strategy mapping in balanced scorecard? A strategy map is a visual diagram that demonstrates how your organisation creates value by connecting strategic objectives through cause-and-effect relationships. It's one of the most powerful elements in balanced scorecard strategic planning because it transforms abstract strategy into communicable action.
A strategy map in the balanced scorecard framework is essentially a one-page visual that displays strategic objectives as interconnected elements organised by the four perspectives of balanced scorecard. The diagram flows from bottom to top, telling your strategy story: foundational investments in learning and growth enable internal process improvements, which deliver customer value, which generates financial results.
Most strategy maps contain between 12-18 strategic objectives distributed across the four perspectives. For-profit organisations typically place the financial perspective at the top since economic value creation is their ultimate goal. Non-profits might place customer or stakeholder perspective at the top instead.
Consider a simplified balanced scorecard strategy map example for a technology services company:
Learning & Growth (Foundation):
Internal Process:
Customer:
Financial (Outcome):
You can find more detailed examples in our guide on strategy maps for operational excellence.
Implementing a balanced scorecard strategy successfully requires systematic planning, stakeholder engagement and commitment to change management. Here's your practical implementation roadmap.
The balanced scorecard approach to strategic planning produces living documents that drive daily decisions rather than lengthy plans that gather dust. This framework transforms the strategic planning balanced scorecard template into an active management tool.
Most organisations follow an annual cycle for balanced scorecard strategic planning:
The balanced scorecard in strategic management process transforms how organisations manage strategy planning, strategy implementation and evaluation phases.
During strategy formulation, the balanced scorecard framework structures environmental analysis (both external opportunities and threats, and internal capabilities and constraints), strategic choice (which objectives create most value and how they interconnect) and resource allocation (which initiatives get funded across the four perspectives).
The balanced scorecard strategic analysis process makes these decisions more rigorous by requiring explicit connections between choices and expected outcomes.
Once strategy is formulated, the balanced scorecard in strategic management template becomes the implementation engine:
The balanced scorecard for strategy evaluation enables systematic learning:
Effective strategic management depends on this continuous evaluation cycle.
Even with careful planning, organisations encounter predictable challenges when implementing balanced scorecard strategy. Here's how to address them.
Symptom: Managers view balanced scorecard as extra work rather than value-adding.
Solution: Start with a pilot in one business unit to demonstrate value through quick wins like improved clarity and better decisions. Involve sceptics in the design process to build ownership. Show how balanced scorecard reduces rather than increases work by focusing effort on strategic priorities.
Symptom: Scorecards balloon to 50+ measures, creating information paralysis.
Solution: Apply the "rule of 2": maximum 2 measures per objective. Ask of each measure: "Will this drive different decisions?" Distinguish strategic measures (on scorecard) from operational measures (in reports). Review and prune measures annually.
When to choose this approach: Your organisation struggles with strategy execution, competing priorities create confusion, you need to balance short-term results with long-term capability building, cross-functional alignment is weak, or you want to create a performance-driven culture with clear accountability.
Symptom: Excel spreadsheets and PowerPoint presentations make scorecard updates time-consuming, data becomes outdated quickly, and cascading scorecards across departments is cumbersome.
Solution: Implement digital balanced scorecard software that automates data collection, provides real-time dashboards and enables seamless cascading across organisational levels. Modern platforms integrate with existing data sources, reducing manual data entry by up to 80% and ensuring stakeholders always access current performance information.
LTS Data Point digital Balanced Scorecard, specialise in helping organisations transform strategic vision into measurable results through balanced scorecard implementation. Our approach combines proven methodology with practical, hands-on support tailored to your unique business context.
This software provide comprehensive balanced scorecard services including strategy workshop facilitation, custom scorecard design, strategy map development and implementation support. It streamlines the entire strategic management process, providing real-time dashboards, automated data integration and collaborative features that make strategy execution more efficient.
Access our comprehensive organisational strategy kit to accelerate your implementation with templates, examples and expert guidance.
1. What is a balanced scorecard strategy?
A balanced scorecard strategy is a strategic management framework that translates an organisation's vision and strategic objectives into measurable performance indicators across four balanced perspectives.
2. How does a strategy map work in the balanced scorecard framework?
A strategy map in the balanced scorecard framework is a visual diagram that displays strategic objectives as connected elements organised by perspective.
3. How long does balanced scorecard implementation take?
Typical balanced scorecard implementation takes 12-16 weeks from initial planning to full deployment.
4. What's the difference between balanced scorecard and OKRs?
Balanced scorecard provides comprehensive strategic framework across four perspectives with annual time horizons, focusing on how all business aspects connect to create value. OKRs (objectives and key results) are shorter-term (quarterly) goal-setting tools with ambitious targets to drive rapid progress.
5. How many strategic objectives should a balanced scorecard have?
A well-designed balanced scorecard typically contains 12-18 strategic objectives distributed across the four perspectives, with 3-5 objectives per perspective.
6. Can small businesses use balanced scorecard strategy?
Yes, balanced scorecard strategy scales effectively for small businesses. Smaller organisations actually benefit from simplified implementation: fewer stakeholders to align, faster decision-making and more direct line of sight between strategy and execution.
7. What makes a good strategic objective for balanced scorecard?
Good strategic objectives are action-oriented (start with verbs like improve, increase, develop), specific enough to guide decisions but not so detailed they become operational tasks, measurable through clear KPIs, controllable by your organisation
8. How often should balanced scorecards be updated?
Performance data in balanced scorecards should be updated monthly for most KPIs, with some leading indicators updated weekly or even daily. Strategic objectives and measures should be reviewed and potentially revised quarterly, with comprehensive annual updates aligning with the strategic planning cycle.
9. What software is best for balanced scorecard management?
LTS Data Point digital Balanced Scorecard is one of the leading Balanced scorecard software that offer strategy mapping, KPI tracking, cascading, dashboards and integrations with data sources.