What does a balanced scorecard help organizations measure?

A balanced scorecard is a strategic management tool used to measure an organization’s overall business performance and ensure that its activities align with its strategic objectives. It transcends traditional financial metrics by incorporating additional perspectives, such as customer satisfaction, internal business processes, and learning and growth.

This multifaceted approach allows organizations to gain insights into how well they are achieving their goals across various domains, thus facilitating informed decision-making and performance management. In essence, it helps organizations create a clear framework that links their vision and strategy to tangible performance metrics, thereby measuring not only past performance but also guiding future actions.

By focusing on overall business performance and strategy alignment, the balanced scorecard ensures that all parts of the organization are working toward common objectives, providing a more holistic view of performance rather than isolating it to just one area, such as IT compliance, employee productivity, or cost reduction. This makes it a valuable tool for organizations seeking comprehensive growth and improvement.