The Balanced Scorecard is a management system. It’s a way of looking at your organization that focuses on your big-picture strategic goals. It also helps you choose the right things to measure so that you can reach those goals.
Traditionally, companies have judged their health by how much money they make. Financial measures are definitely important, but they only give you part of the picture. They focus on the short-term, and you’re trying to build an organization to stand the test of time. The name “balanced scorecard” comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more “balanced” view of performance.
It’s this focus on both high-level strategy and low-level measures that sets the balanced scorecard apart from other performance management methodologies. It takes your big, fuzzy strategic vision and breaks it down into specific, actionable steps to take on a day-to-day basis.