At times, an organization’s metrics pertain only to financial measures. Measures for items such as customer satisfaction, internal business growth, creativity or others are often neglected. Developing other measures, which help describe the vision and strategy into meaningful performance measures is called the balanced scorecard.
The balanced scorecard focuses the company’s attention on four perspectives of the vision and strategy. These include:
Financial: How should we represent our financial status to our sharehoulders and stakeholders? These include such items as ROI, cash flow, sales backlog, and others.
Internal business process: What business procecss must we excel at to be successful? This could include reduced rework, cycle times and setup times for a manufacturer or transaction costs, accuracy and customer retention for a service business.
Learning and growth: How will be sustain our ability to change and improve? Some factors to track and understand are employee surveys and suggestions, training programs and participation and employee satisfaction.
Customers: How should we appear to our customers? Market share, customer surveys, complaints and resolution of these are some of these factors.