100 Great Business Ideas: From Leading Companies Around the World (100 Great Ideas)

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100 GREAT BUSINESS IDEAS • 189

In The Balanced Scorecard Robert Kaplan and David Norton
highlight several ways entrepreneurs can increase the long-
term value of their business. The balanced scorecard offers a
measurement and management system that links strategic
objectives to improved performance.


The idea


The balanced scorecard approach enables managers to generate
objectives in four business areas, providing a framework for
action, with progress being regularly assessed. Its success lies in
its ability to unify and integrate a set of indicators that measure
the performance of key activities and processes at the core of the
organization’s operations. This presents a balanced picture, and
highlights specifi c activities that need to be completed.


The balanced scorecard takes into account four essential areas—
traditional “hard” fi nancial measures are only one part. The three
“soft,” quantifi able operational measures comprise:



  • Customer perspective—how an organization is perceived by
    customers.

  • Internal perspective—those issues in which the organization
    must excel.

  • Innovation and learning perspective—those areas where an
    organization must continue to improve and add value.


84 The balanced scorecard

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