balanced scorecard

Strategic management and measurement system that links strategic objectives to comprehensive indicators. Acknowledging that companies tend to attach importance just to a few measurements, the balanced scorecard focuses management attention on a range of key performance indicators in an attempt to provide a balanced view.

The concept was developed by two Americans, David Norton, co-founder of consulting company Renaissance Solutions, and Robert Kaplan, from Harvard Business School. Kaplan and Norton suggest that four elements need to be balanced: the customer perspective (companies need to ascertain how customers perceive them); the internal perspective (companies need to know those things at which they must excel); the innovation and learning perspective (how companies can improve and create value); and the financial perspective (how companies are perceived by their shareholders).