Summary of a Balancing Act

The balance scorecard is a measurement system. Its most important function is to support the promotion of strategy at an everyday operation level. The balance scorecard system is part of a strategic and operation-planning objective setting and monitoring as well as learning about how well the strategy works. This system can be used n any organization to help align vision and mission with the customer requirements.

The balance scorecard system was original developed in the early 1990s. And today this system has become a full performance management system that is used not only in the private sector, but also in the public sector. The different views and perspective of business owners, customers, stakeholders, mangers, and employees are all part of the balance score card language.

Building a balance scorecard takes six steps. The first step is building the scorecard. The scorecard is an assessment of the organization foundations, its core beliefs, their market opportunities, competition, and their short and long-term goals. The second step is the development of the overall business strategy. The third step is a decomposition of the business strategy into smaller components call objectives. The objectives are the basic building blocks of the strategy. The fourth step is to create a strategic map of the organizations overall business strategy. The Fifth step is performance measures. Performance measures are developed to keep track of both the strategic and operational progress. The last and final step is identifying initiative. These initiatives need to be funded and implemented to ensure that the strategies are successful. A typical balance scorecard can take from two to four months to build. Even though the process might be long and crucial the balance scorecard will help to execute good strategies and manage change successfully. The benefits of a balanced score system are worth the cost. The balance scorecard system creates stronger communication is an organization. It helps to organization by foreseeing strengths and opportunities that lie ahead. It helps an organization focus on the most important measure of the company and therefore creating and greater alignment within the organization.