What is 'a balanced scorecard'?
The balanced scorecard is a strategic planning and management system that is widely applicable to organisations regardless of size or type of business. The system, extensively used in business and industry, government, and non-profit organizations worldwide, facilitates the development and ongoing review of an organisation’s vision and strategy, provides a method of aligning the organisation’s business activities with that strategy, improves the organisation’s internal and external communications, and allows the organisation to monitor its performance against its strategic goals.
It is a ‘balanced scorecard’ because a central component of the methodology is a management ‘scorecard’ that focuses on all of the important aspects of an organisation’s performance as well as its short term financial performance.
Additional details about the balanced scorecard methodology can be found here.
NB: The different meanings of 'the balanced scorecard'
Because ‘balanced scorecard’ is a generic term which refers to a management methodology that has been rapidly evolving for some 2 decades, it has come to mean different things to different people. In practice, there are wide variations in understanding and implementation. In its most limited form, ‘the balanced scorecard’ is frequently seen to be a simple management dashboard of performance measures. At the other extreme, in its most developed form ‘the balanced scorecard’ is a comprehensive planning and management system designed to focus an organisation on achieving its objectives as effectively as possible. The various meanings are frequently presented as being ‘first generation scorecards’, second generation scorecards’, third generation scorecards’, etc, although there seems to be little agreement about exactly what is included within each ‘generation’.