What Is a Balanced Scorecard? (Example & Template Included)


Coming up with long-term goals for a business or organization is just the beginning of a five-year project. Making sure your daily operations are working towards achieving those strategic goals and that they’re clearly communicated throughout the business or organization greatly improves by using a balanced scorecard.

If you’re not familiar with a balanced scorecard, we’ll define the term and show the four perspectives it tracks as well as explain what should be included in a balanced scorecard. To better illustrate how a balanced scorecard works, we’ll also show an example of one and then share a free template to help you get started with yours.

What Is a Balanced Scorecard?

A balanced scorecard is a strategic planning model. It’s used to identify and improve internal business functions and their external outcomes. The balanced scorecard is also a means to measure and provide feedback to businesses and organizations. It’s a common management tool worldwide, used across industries, including government and nonprofit organizations.

Relatively new, the balance scorecard was introduced in 1992 by David Norton and Robert Kaplan, by taking existing metric performance measures and adapting them to include nonfinancial information. The balanced scorecard measures four aspects of a business or organization: finance, customers, business processes and learning and growth. This was originally used for nonprofit organizations but later expanded to for-profit businesses and government agencies.

The purpose of using a business scorecard is to have one place in which to pool information about a business to help improve its operational efficiency. It’ll define the strategic goals and then explain how these goals will be met throughout the daily operations of the business or organization across the four perspectives listed above. The balanced scorecard is also a communication tool to ensure everyone understands the objective and participates in reaching it.

Once you’ve made a balanced scorecard, you’ll need project management software to fulfill the strategic goals and the plan to get you there. ProjectManager is award-winning project management software that helps you plan, manage and track your projects to meet your strategic goals on time and within budget by monitoring real-time data.

Build your plan on our robust Gantt charts that organize tasks, resources and cost, scheduled on a visual timeline to see the whole project in one place. Then link task dependencies to avoid delays, filter for the critical path to identify essential tasks and set a baseline to track your planned progress against your actual progress to help you stay on schedule. Get started with ProjectManager today for free.

ProjectManager's Gantt chart
ProjectManager’s Gantt charts turn your balanced scorecard into actionable plans. Learn more

Balanced Scorecard Perspectives

What makes a balanced scorecard unique is the four perspectives. This is a way to look at the performance of a business or organization from several different viewpoints. By looking at performance from these different lenses, a business or organization can put its strategy in context.

The four balanced scorecard perspectives help to understand the business or organization as a system of elements that need to work together to create value and move toward operational excellence. In the past, the financial perspective was the only metric, but the balanced scorecard broadens that lens for a fuller measurement of the strategy of the business or organization. Let’s define the four balanced scorecard perspectives.

Financial Perspective

This is looking at the return on investment for the business or organization and the key risks involved in its operations. Financial goals will include all involved, from shareholders to customers and suppliers. Some ways to achieve financial goals include introducing new products and services, improving the value proposition and cutting business costs.

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Balanced Scorecard Template

Use this free Balanced Scorecard Template for Excel to manage your projects better.


Customer Perspective

Here, the perspective is on the value being given to its customer base. It’ll also measure the level of customer satisfaction, which is one of the indicators of the success of a business or organization and its profitability. Therefore, the balanced scorecard will compare the reputation of the business or organization to its competitors and get the perspective from the customers’ point of view. To improve their customer perspective, businesses or organizations can improve quality, enhance customer experience or adjust pricing.

Business Process Perspective

When you’re looking at the internal business processes, you’re determining how well the business or organization is performing. This perspective can help you run the business or organization more effectively. But you’re also looking at any products or services to ensure they’re meeting the standards of your customers. It’s looking at what you as a business or organization are good at and then creating marketing strategies to create new and improved ways of doing that.

Learning & Growth Perspective

With this perspective, you’re looking at the people in your business or organization. You want to support a culture that delivers on your objectives and also nurtures your employees. This can be accomplished by training and a corporate culture focused on self-improvement. It can also view how much the business or organization has learned and improved over the past year. You can take measures such as using a lessons learned template after every project.

What Should Be Included In a Balanced Scorecard?

We’ve looked at the four perspectives through which a business or organization will be viewed on a balanced scorecard. Now, let’s take a look at the elements that make up the metrics and other things that are included in a balanced scorecard.

1. Metrics & KPIs

For each objective, you’ll want to have a metric to measure it. Key performance indicators (KPIs) will help you see if you’re making progress towards your goals. Strategic KPIs will measure the difference between your actual and planned performance, evaluate organizational effectiveness and measure operational efficiency.

2. Four Balanced Scorecard Perspectives

We’ve already mentioned the four balanced scorecard perspectives of financial, customer, internal business processes and learning and growth. These are the different ways to view your strategic goals and how you’re reaching them across all aspects of your business or organization.

3. Strategic Objectives

Strategic objectives are high-level goals, such as increasing sales by 15 percent, reducing production costs by 10 percent, etc. The balanced scorecard will illustrate and communicate the strategic objectives for the business or organization.

4. Strategic Initiatives

A strategic initiative would be any action step or project taken to achieve a strategic objective. Those strategic objectives and initiatives can vary from one organization to another, but they’ll impact the entire business or organization. In other words, there needs to be a project plan, schedule, resources, etc.

5. Targets

Targets are the goals you want to achieve. You have to define where you want to be over one year, two years, etc. This can be a percentage increase or a certain number of new customers. Whatever it is, your metrics will measure your progress towards achieving that target.

Free Balanced Scorecard Template

We’ve made it easier for you to reap the rewards of a balanced scorecard by offering a free balanced scorecard template for Excel that you can download right now. It features all four perspectives and the KPIs to track your progress over five years.

ProjectManager's free balanced scorecard template

Benefits of Using a Balanced Scorecard

Balanced scorecards are a lot of work. Why should one use it? They’re mostly used to track progress as a business or organization works towards achieving its goals and objectives. But that’s only one of the benefits of using a balanced scorecard.

It’s also a fine communication tool to share the strategy of a business or organization with all its employees. You’ll also find that the balanced scorecard will help you align your day-to-day operations with the overall strategy of the business or organization.

The balanced scorecard brings everyone together for the strategic planning process. It’ll also set metrics to track progress and measure performance in a way that takes into account both financial and non-financial indicators.

Balanced Scorecard Example

Let’s look at a real-life example. Coca-Cola uses a balanced scorecard to align its sustainability goals with its overall business strategy and monitor its progress. This was done in the early 2000s as the company was dealing with increased competition and declining sales.

In terms of metrics, it tracked market share, customer loyalty, employee engagement and other relevant performance indicators. This was done through the four perspectives so financial, customer, business processes and learning and growth would all factor in on achieving Coca-Cola’s goals.

Through the balanced scorecard, they identified areas that could be improved and executed strategic projects that delivered their desired results of regaining market leadership. This improved their financial performance, increased customer satisfaction, optimized internal processes and enhanced learning and growth opportunities.

Balanced Scorecard vs. Strategy Map

A balanced scorecard deals with your strategic goals, but it differs from a strategy map. A strategy map is often used with a balanced scorecard to translate the strategy into actions that model the relationship between the drivers and desired outcomes. They share the same perspectives, but a strategy map is used to identify key goals and uncover gaps in your strategy before you initiate the execution of that strategy.

Who Invented the Balanced Scorecard?

As mentioned, the balanced scorecard was developed in the early 1990s by Robert Kaplan and David Norton, who led a research study of many companies to uncover new methods of performance measurement. Kaplan is a senior fellow and the Marvin Bower Professor of Leadership Development emeritus at Harvard Business School. Norton is a founder and director of the Palladium Group.

How ProjectManager Helps With Strategic Management

The balanced scorecard is a great tool to define strategy across your business or organization and then come up with a plan to implement it in your daily operations. However, the balanced scorecard stops there. To manage those projects, you’ll need project management software.

ProjectManager is award-winning project and portfolio management software that helps you plan, manage and track your projects in real time. Use our software to plan your projects on powerful Gantt charts and execute them on kanban boards, task lists, sheet and calendar views, which all update together so everyone is on the same page.

Manage Resources and Control Labor Costs

To meet your strategic goals, you’re going to have to plan and manage your resources. Our Gantt chart helps you organize tasks and their associated human and nonhuman resources and costs. You can manage labor costs with our secure timesheets.

They help streamline payroll processes and track how much each team member is spending on completing their tasks. To keep teams working at capacity and staying productive, toggle to the color-coded workload chart, which makes it easy to see your team’s allocation. You can balance their workload right from the chart.

ProjectManager's worklooad chart
Monitor Progress With Real-Time Dashboards

The balanced dashboard helps to track performance, but our real-time dashboard provides you with more metrics to help you stay on schedule and within your budget. The dashboard collects live data and displays it in easy-to-read graphs and charts that give you a high-level overview of your work. You can see KPIs, such as time, cost and more. There’s no time-consuming and complicated setup as you’ll find with lightweight competitors. Our dashboard is ready when you need it.

ProjectManager's dashboard

For more detailed information, use our customizable reports. You can quickly generate status and portfolio reports, as well as reports on timesheets, workload, variance and more. All reports can be filtered to show only the data you want to see and shared in a variety of formats to keep your executive team updated.

ProjectManager is online project management software that connects teams whether they’re in the office, out in the field or anywhere else. They can share files, comment at the task level and stay updated with email and in-app alerts. Join teams at Avis, Nestle and Siemens who use our software to deliver successful projects. Get started with ProjectManager today for free.