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THE FOUR PERSPECTIVES IN A
BALANCED SCORECARD
Sensei Ndlovu- MBA Director: Kaizen Academy
THE FOUR PERSPECTIVES IN A BALANCED SCORECARD
Financial performance
Customer knowledge
Internal business
processes
Learning and growth
THE FOUR PERSPECTIVES IN ABALANCED SCORECARD
Vision
and
Strategy
Financial
‘To succeed
financially, how
should we appear to
our shareholders?”
Customer
“To achieve
our vision,
how should
we appear
to our
customers?”
Internal
Business
Process
“To satisfy our
shareholders
and
customers,
what business
processes
must we excel
at?”
Learning and Growth
‘To achieve our
vision, how will we
sustain our ability to
change and
improve?”
BSC MEASURES
• Strategic question:
“To succeed financially, how should we appear to our shareholders?”
• Examples (measurable indicators):
Cash flow
Sales growth
Operating income
Return on Equity (RoE)
Return On Investment (ROI)
Return on Capital Employed (RoCE)
Financial Results (Quarterly/Yearly)
• Value Outcome:
Financial performance/profitability
FINANCIAL PERSPECTIVE
• Strategic question:
“To achieve our vision, how should we appear to our customers?”
• Examples (measurable indicators):
Percent of sales from new products
On time delivery
Share of important customers’ purchases
Ranking by important customers
Delivery performance to customer
Quality performance for customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate
• Value Outcome:
Customer satisfaction
CUSTOMER PERSPECTIVE
• Strategic question:
“To satisfy our shareholders and customers, what business processes must we excel at?”
• Examples (measurable indicators):
Cycle time
Unit cost
Yield
New product introductions
Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in the right department?)
Process bottlenecks
Process automation
• Value Outcome:
Efficiency
BUSINESS (INTERNAL) PROCESS PERSPECTIVE
• Strategic question:
“To achieve our vision, how will sustain our ability to change and improve?”
• Examples (measurable indicators):
Time to develop new generation of products
Life cycle to product maturity
Time to market versus competition
Is there the correct level of expertise for the job?
Employee turnover
Job satisfaction
Training/Learning opportunities
• Value Outcome:
Organizational knowledge and growth capacity
LEARNING, INNOVATION AND GROWTH PERSPECTIVE