Premium Essay

Strategy Implementation

In: Business and Management

Submitted By ankitbansal1557
Words 10522
Pages 43
CMR 073


Linking the Balanced
Scorecard to Strategy


Robert S. Kaplan
David P. Norton




everal years ago, we introduced the concept of a “Balanced Scorecard” for motivating and measuring business unit performance.1 The Scorecard, with four perspectives—financial, customer, internal business processes, and learning and growth—provided a balanced picture of current operating performance as well as the drivers of future performance (see
Exhibit 1).

Can Business Operate with a Balanced Scorecard?


Some argue that managers cannot operate with multiple measurements of business-unit performance. While they recognize that aggregate financial measures (such as operating income, return on investment, and economic value added) are not perfect by themselves, they claim that financial measures at least are well understood and provide clear, unambiguous, and objective goals on which all organizational participants can focus. Such people feel that multiple measures—some financial and some non-financial—are confusing and lead to ambiguous, often conflicting, signals about what the organization values.


We disagree. Imagine entering the cockpit of a jet airplane and observing that there is only a single instrument. How would you feel about flying on that plane after the following discussion with the pilot:

Reprinted by permission of Harvard Business School Press. Adapted from The Balanced Scorecard by
Robert S. Kaplan and David P. Norton. Copyright ©1996 by the President and Fellows of Harvard
College; all rights reserved.


VOL. 39, NO. 1

FALL 1996






“To achieve our vision, how will we sustain our ability to change and improve?” CO



FALL 1996...

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