A management system developed by Richard Kaplan and David Norton, the balanced scorecard methodology is fundamentally a value-based management philosophy. The approach highlights four specific elements of success. A company can advance its vision and strategy by focusing on these four elements, which must be carefully balanced with each other.
The first is the financial perspective, which asks how the company should appear to shareholders to continue garnering support. Included in this perspective is traditional financial data. The second is the customer perspective, which focuses on how customers perceive the company and the image that it wants to portray. Companies need to focus on customer satisfaction to achieve success.
The third element is the internal business perspective. Shareholders have certain expectations, and it is important to identify the business processes involved in meeting them. The final element is the learning and growth perspective, as leaders must figure out how to sustain change and improve over time. Employee training is vital for success in this area. This perspective also involves creating a supportive corporate culture.
