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Linking The Balanced Scorecard To Strategy

The objective of any measurement system should be to motivate managers and staff to implement the organization's strategy. By translating strategy into measures within the Balanced Scorecard, objectives and targets can be communicated to everyone. They can then focus on the critical drivers and align initiatives and actions to the meeting of strategic goals.

Why is it important for a Scorecard to communicate the strategy?

  • It describes the organizational vision to all departments

  • It ensures that the meeting of performance targets contributes to achieving strategic objectives

  • It focuses effort on the key objectives and measures


How can we build a Scorecard that translates a strategy into action?

  • By establishing cause-and-effect relationships between measures

  • By creating a framework against which underpinning objectives and actions can be assessed, valued and prioritized

  • By ensuring that cause-and-effect paths link through to on-going financial strength


An effective Scorecard enables an organization's strategy to be inferred simply from the cause-and-effect links between measures. Outcome measures signal the ultimate objectives of the strategy and performance drivers indicate actions or initiatives that are required in order to create future value. Ultimately, the Scorecard retains a strong emphasis on outcomes and financial outcomes in particular.
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