The balanced scorecard is a strategic planning and management system that helps everyone in an organization understand and work

towards a shared vision. A completed scorecard system aligns the organizations picture of the future (shared vision), with business strategy, desired employee behaviors, and day to day operations. !trategic performance measures are used to better inform decision making and show progress toward desired results. The organization can then focus on the most important things that are needed to achieve its "ision and satisfy customers, stakeholders, and employees. #ther benefits include measuring what matters, identifying more efficient processes focused on customer needs, improving prioritization of initiatives, improving internal and e$ternal communications, improving alignment of strategy and day to day operations, and linking budgeting and cost control processes to strategy.The components of the management system are shown in the figure above. !tarting at %high altitude&, 'ission, "ision, and (ore "alues are translated into desired !trategic )esults. The organizations %*illars of +$cellence&, or !trategic Themes, are selected to focus effort on the strategies that matter the most to success. !trategic #b,ectives are used to decompose strategy into actionable components that can be monitored using *erformance 'easures. 'easures allow the organization to track results against targets, and to celebrate success and identify potential problems early enough to fi$ them. -inally, !trategic .nitiatives translate strategy into a set of high priority pro,ects that need to be implemented to ensure the success of strategy. +ngaged leadership and interactive, two way communication are the cornerstones of a successful management system. #nce the strategic thinking and necessary actions are determined, annual program plans, pro,ects and service level agreements can be developed and translated into budget re/uests. The balanced scorecard management system is built by the organizations leaders, managers, and other employees. -acilitated workshops, led by our senior consultants, keep employees at all levels of the organization engaged, on track and on schedule. #ur award winning balanced scorecard framework, 0ine !teps to !uccess1 , is a disciplined, practical approach to developing the management system. 2e have used this framework to train over 3444 people and have consult with over 544 companies in 53 countries. !tep #ne of the scorecard building process starts with an assessment of the organizations 'ission and "ision, challenges (pains), enablers, and values. !tep #ne also includes preparing a change management plan for the organization, and conducting a focused communications workshop to identify key messages, media outlets, timing, and messengers. .n !tep Two, elements of the organizations strategy, including !trategic )esults, !trategic Themes, and *erspectives, are developed by workshop participants to focus attention on customer needs and the organizations value proposition. .n !tep Three, the strategic elements developed in !teps #ne and Two are decomposed into !trategic #b,ectives, which are the basic building blocks of strategy and define the organization6s strategic intent. #b,ectives are first initiated and categorized on the !trategic Theme level, categorized by *erspective, linked in cause effect linkages (!trategy 'aps) for each !trategic Theme, and then later merged together to produce one set of !trategic #b,ectives for the entire organization. .n !tep -our, the cause and effect linkages between the enterprise wide !trategic #b,ectives are formalized in an enterprise wide !trategy 'ap. The previously constructed

theme !trategy 'aps are merged into an overall enterprise wide !trategy 'ap that shows how the organization creates value for its customers and stakeholders. .n !tep -ive, *erformance 'easures are developed for each of the enterprise wide !trategic #b,ectives. 7eading and lagging measures are identified, e$pected targets and thresholds are established, and baseline and benchmarking data is developed. .n !tep !i$, !trategic .nitiatives are developed that support the !trategic #b,ectives. To build accountability throughout the organization, ownership of *erformance 'easures and !trategic .nitiatives is assigned to the appropriate staff and documented in data definition tables. .n !tep !even, the implementation process begins by applying performance measurement software to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the 8alanced !corecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information. .n short, automation helps people make better decisions because it offers /uick access to actual performance data. .n !tep +ight, the enterprise level scorecard is 9cascaded down into business and support unit scorecards, meaning the organizational level scorecard (the first Tier) is translated into business unit or support unit scorecards (the second Tier) and then later to team and individual scorecards (the third Tier). (ascading translates high level strategy into lower level ob,ectives, measures, and operational details. (ascading is the key to organization alignment around strategy. Team and individual scorecards link day to day work with department goals and corporate vision. (ascading is the key to organization alignment around strategy. *erformance measures are developed for all ob,ectives at all organization levels. As the scorecard management system is cascaded down through the organization, ob,ectives become more operational and tactical, as do the performance measures. Accountability follows the ob,ectives and measures, as ownership is defined at each level. An emphasis on results and the strategies needed to produce results is communicated throughout the organization. .n !tep 0ine, an +valuation of the completed scorecard is done. :uring this evaluation, the organization tries to answer /uestions such as, 9Are our strategies working;, 9Are we measuring the right things;, 9<as our environment changed; and 9Are we budgeting our money strategically;