A balanced scorecard (BSC) is a strategic measurement framework that tracks performance across four perspectives - financial, customer, internal process, and learning and growth - rather than judging success on financial results alone.
What it means
The "balanced" part of the name is deliberate: financial results are a lagging indicator of past decisions, while the other three perspectives capture leading indicators - customer satisfaction, process efficiency, capability building - that drive future financial performance.
Where it fits in
A balanced scorecard is typically set at organisational or business-unit level, with KPIs assigned under each of the four perspectives, and individual or team scorecards then often mirror the same structure at a smaller scale.
Key rules
- BSC = balanced scorecard, measuring across four perspectives, not financials alone.
- Perspectives: financial, customer, internal process, learning and growth.
- Captures leading indicators alongside the lagging financial perspective.
- Set at organisational level, often mirrored down to team scorecards.
