Balanced Scorecard Learning Simplified

Majority of businesses today are now using what is called a balanced scorecard (BSC) to measure the effectiveness of their business approaches, and to ensure that all of these action plans are aligned with the company’s goals and vision. Primarily, in the business world, there is a serious need for balanced scorecard learning to make sure that this effective management methodology is efficiently absorbed and then applied later on. This is also applicable to businesses that have been around for quite a while and need to embrace a new management system. Be cautious, though, because the use of BSC is something that will require full attention and will embody a cultural change.As a priority in learning the concept, one needs to know the basic history of the balanced scorecard. It was first developed in 1987. Then, the balanced scorecard gained popularity and is now being used in almost all industries. The aim of this, back in 1987 when Analog Devices first designed it, was to see if the bottom operation areas of the company have goals similar to the high-level plans of the company. As such, the company embraced the fact that they have to take care of human issues, too, if they are to succeed. The mistake that many companies commit is that they focus too much on financial issues that they forget to nurture the needs of their own people.Five years later, two people began to push for this concept through publications. These people are Robert S. Kaplan and David P. Norton. They published a book soon after and these led to a series of research in the field of balanced scorecards.In essence, the concept of a balanced scorecard is that it is about planning how to measure the processes and activities in the business and then translate these numbers into figures that will indicate if the business is doing good or bad. Since then, the concept and methodology in managing business has spread globally and has helped a lot of corporations shape their businesses. Accordingly, a BSC is also considered as a tool to manage the performance of employees that will then indicate if the action plans are being executed well or not.The original method used here was to categorize business perspectives into buckets. These perspectives revolve around the Financial, Customer, Internal Business Processes, and Learning and Growth. Many other scholars suggested modifications in the number of categories and suggestions were even made to replace the names. Some said that it is better to have six perspectives while others maintained it at just four.All in all, other balanced scorecard or BSC approaches were conceptualized. There are methods called prism, goal-oriented structure, and so on. If you will study these carefully, they all have similar functions as that of the balanced scorecard. In reality, a lot of institutions use this without even knowing that it is already a balanced scorecard. Also, keep in mind that balanced scorecard learning is not about copying the scorecards of other companies. This is generally not advised.