Use this hub to understand how the Balanced Scorecard works and how its main elements fit together.
For Strategy, Performance, and Transformation Teams
This page is for teams that need to move beyond a KPI list and build a Balanced Scorecard that reflects strategic logic, clarifies accountability, and supports regular management reviews.
| Balanced Scorecard Stakeholders | Typical Role in Strategy Execution |
|---|---|
| Strategy and transformation leaders | Translate strategic priorities into objectives, measures, initiatives, risks, and review routines. |
| Performance management teams | Define KPIs, targets, update schedules, ownership, evidence, and reporting standards. |
| Department and business unit leaders | Align local scorecards with shared corporate priorities while preserving operational accountability. |
| Strategy consultants and facilitators | Support stakeholder analysis, objective formulation, strategy mapping, workshops, and implementation capability. |
From KPI Lists to a Connected Strategy Execution System
A strategy document, KPI spreadsheet or dashboard can each be useful, but they do not by themselves show how strategy is expected to work. The Balanced Scorecard connects objectives, cause-and-effect relationships, measures, initiatives, risks, ownership, and reviews in one coherent model.
Before / After
| Fragmented strategy and KPI tracking | Connected Balanced Scorecard architecture |
|---|---|
| Objectives, indicators, initiatives, and risks documented separately | Objectives, KPIs, initiatives, risks, and owners connected within one strategy model |
| KPIs grouped into categories without strategic cause-and-effect logic | Objectives organized into perspectives and linked through cause-and-effect relationships |
| Corporate strategy disconnected from departments and business units | Corporate, business unit, departmental, and functional scorecards aligned through cascading |
| Strategy reviews depend on manually reconstructed reports | Reviews use governed KPI data, initiatives, risks, evidence, and performance history |
What Is the Kaplan and Norton Balanced Scorecard?
Here is an executive summary of the Balanced Scorecard framework:
- Balanced Scorecard is a strategy execution framework developed by Robert S. Kaplan and David P. Norton1.
- It suggests projecting business strategy on four perspectives – the “drivers” (Learning and Internal perspectives) and the “outcomes” (the Customer and Stakeholder perspectives)2.
- Rather than merely grouping objectives and metrics into the four perspectives, the framework emphasizes showcasing the cause-and-effect relationships between the goals.
- The goals are further detailed into leading and lagging3 performance metrics (KPIs) and initiatives (action plans).
- Following the rationale of involving employees in strategy execution, it suggests “cascading” or “alignment” of strategy4.
- The Balanced Scorecard is designed to cover the strategy of the entire organization. In practice, this is achieved5 by cascading the overall strategy into aligned strategic and functional scorecards that form a comprehensive strategy.
- The framework combines various approaches to strategy decomposition and is positioned in the ecosystem6 of strategic planning frameworks in the strategy execution sector.
A Typical Balanced Scorecard Workflow
Organizations can use the Balanced Scorecard as a compact strategy execution cycle:
- Analyze stakeholders and the operating environment.
- Translate strategic priorities into execution-ready objectives.
- Organize objectives into perspectives and establish cause-and-effect relationships.
- Define leading and lagging KPIs, targets, and update schedules.
- Connect initiatives, risks, assumptions, and evidence to the relevant objectives.
- Assign owners and responsibilities for execution and reporting.
- Cascade strategy into aligned business unit, departmental, and functional scorecards.
- Use strategy reviews and audits to validate assumptions and improve the scorecard.
How-To Resources
The resources below explain how to formulate objectives, build a strategy map, select KPIs, establish ownership, cascade scorecards, and review implementation quality.
Framework and Strategy Architecture
Four Perspectives of the Balanced Scorecard
— Explains the financial, customer, internal process, and learning and growth perspectives and their cause-and-effect logic
Strategy Map Guide
— Step-by-step guidance for connecting objectives through a strategic hypothesis
Strategy Execution Canvas
— A one-page structure for stakeholders, aspirations, current and future state, objectives, and metrics
KPIs and Performance Measurement
Full Guide to KPIs
— Covers indicator design, examples, targets, ownership, and common measurement practices
How to Calculate KPIs and Create a Scorecard
— Practical guidance for formulas, scales, aggregation, and performance calculation
Performance Measurement Framework
— Connects KPIs with governance, ownership, update routines, reviews, and reporting
Cascading and Alignment
Strategy Cascading Methods
— Four approaches for linking corporate, business unit, departmental, and functional strategies
Connected Departmental Scorecards
— Practical structure for preserving local accountability while aligning shared priorities
5-Step Strategy Implementation System
— A complete architecture for moving from strategy core to aligned scorecards and execution
Implementation, Review, and Audit
Strategy Execution Capability Building
— Readiness, workshops, roles, training, review practices, and software rollout
Strategy Review Meeting Guide
— Review KPIs, initiatives, risks, performance gaps, and corrective actions
Strategy Audit Checklist
— Audit objectives, measures, initiatives, risks, ownership, and cause-and-effect logic
Designing the Balanced Scorecard
Formulating Execution-Ready Objectives
Within the Balanced Scorecard framework, we work with the strategic objectives of your organization. But how should those objectives be formulated?
Start with an analysis of stakeholders and their needs, analyze the operating environment, and then convert high-level aspirations into tangible objectives quantified by leading and lagging metrics. The Strategy Execution Canvas is a one-page template that will help start the discussion about objectives in your organization.
Balanced Scorecard Step by Step
Learn how to create your own maps or check out live examples of the Balanced Scorecard below.
Four Perspectives of the Balanced Scorecard Framework
The perspectives of the Balanced Scorecard help to establish a cause-and-effect logic for the strategy map. Learn how to properly map business goals into the Finance, Customer, Internal Processes, and Learning and Growth perspectives.
Why these four perspectives? What do we map inside? How to come up with the relevant goals? Part 1 >
The difference between perspectives. Examples of the goals and indicators for each perspective. Part 2 >
Evaluate and Improve the Framework
Advantages and Disadvantages of the Balanced Scorecard Framework
Any business framework has its area of recommended application, its advantages and drawbacks. Check out the details of the analysis.
Balanced Scorecard Audit Checklist – 12 Control Points
Even the best business systems need to be revised and updated regularly.
Use the checklist below to audit your Balanced Scorecard, find possible problems, and fix them during the early stages before they result in bigger issues.
We divided possible situations into the green, yellow, and red zones so that you can quickly learn if your Balanced Scorecard is at risk and how to fix it. Continue to the Balanced Scorecard checklist.
Balanced Scorecard and Related Frameworks
The Balanced Scorecard occupies the strategy execution layer of the broader strategic planning ecosystem. It can complement frameworks used for environmental analysis, strategy formulation, prioritization, and goal setting.
Goal-Setting and Execution Frameworks
OKR vs. Balanced Scorecard
— When each framework is most useful for strategy execution
Hoshin Kanri vs. Balanced Scorecard
— Comparison of deployment, alignment, and measurement logic
Management by Objectives vs. Balanced Scorecard
— Differences in goal setting, measurement, and organizational alignment
Related Strategy Management Concepts
Results-Based Management vs. Balanced Scorecard
— Comparison of results chains, outcomes, indicators, and implementation
Dashboard vs. Balanced Scorecard
— Why operational reporting is not the same as strategy execution
Comparison of Strategic Planning Frameworks
— Positions the Balanced Scorecard within the wider strategic planning ecosystem
Balanced Scorecard Examples and Templates
Review examples to see how the framework is adapted to different functions, sectors, and stakeholder contexts. The examples library includes corporate, functional, GRC, supply chain, marketing, talent, nonprofit, government, education, healthcare, financial, and other scorecards.
Examples by Function
Explore scorecards for corporate governance, cybersecurity, compliance, safety, customer service, IT, quality, project management, supply chain, procurement, marketing, HR, and innovation.
Examples by Industry and Organization
Review examples for nonprofit, government, higher education, healthcare, banking, insurance, construction, energy, hospitality, venture capital, and other contexts.
Balanced Scorecard in Practice
Balanced Scorecard in Practice
As a part of free strategic planning course we discussed how to describe a strategy using Balanced Scorecard framework and its key components – strategy map, business goals, KPIs, and initiatives. Find below a complete video of the Lesson 6:
For the complete methodology, continue to the strategic planning process, the strategy map guide, and the guide to calculating KPIs and scorecards.
From Templates to Balanced Scorecard Software
Templates are useful for initial design, but maintaining connected scorecards across an organization requires governed ownership, automated calculations, permissions, evidence, review history, integrations, and consolidated reporting.
Manual / Automated
| Templates and spreadsheets | Balanced Scorecard software |
|---|---|
| Separate files for strategy maps, KPIs, initiatives, and reports | Objectives, KPIs, initiatives, risks, evidence, and owners connected in one environment |
| Manual calculation and report preparation | Automated formulas, performance scales, dashboards, and scheduled reporting |
| Limited control over updates and historical changes | Permissions, approvals, audit trail, evidence, and historical performance records |
| Difficult consolidation across departments and business units | Aligned scorecards with shared objectives, synchronized indicators, and consolidated reporting |
Ready to Try a Balanced Scorecard Pilot?
Share your current strategy document, KPI spreadsheet, strategy map, or reporting template. We’ll discuss how a focused pilot can turn a representative part of your existing process into a working BSC Designer scorecard.
Discuss a Balanced Scorecard Pilot
Your team can test objective structure, KPI ownership, targets, initiatives, risks, strategy maps, reviews, and reporting before deciding on a broader rollout.
- The Balanced Scorecard—Measures that Drive Performance, by Robert S. Kaplan and David P. Norton, 1992, HBR ↩
- “What Is a K&N Balanced Scorecard and the Role of Its Perspectives,” Alexis Savkín, BSC Designer, February 22, 2019, https://bscdesigner.com/four-perspectives.htm ↩
- “Success Factors and Leading Metrics vs. Lagging Indicators,” Alexis Savkín, BSC Designer, May 11, 2018, https://bscdesigner.com/leading-vs-lagging.htm. ↩
- Strategy Cascading: 4 Methods to Link Corporate and Functional Strategies, Alexis Savkín, BSC Designer, https://bscdesigner.com/cascading.htm, visited July 20, 2024 ↩
- “5-Step Strategy Implementation System,” Alexis Savkín, BSC Designer, May 20, 2024 ↩
- “Comparison of Strategic Planning Frameworks,” Alexis Savkín, BSC Designer, January 26, 2020, https://bscdesigner.com/strategic-frameworks-comparison.htm. ↩
BSC Designer is strategy execution software with the Balanced Scorecard at its core. It helps organizations turn strategic plans into a connected strategy architecture by aligning objectives, KPIs, initiatives, risks, and strategy maps in one place. Our strategy implementation system explains how to put strategy into practice, and the strategy execution workshop template helps teams apply it in internal strategy sessions.