The Balanced Scorecard (BSC) is an approach to performance measurement introduced by Dr. Robert Kaplan and Dr. David Norton of Havard Business School in 1992. The approach combines traditional financial measures with nonfinancial ones that drive business outcomes, so that organizations focus on the future and act in their long-term best interest. The BSC approach also involves a strategic management system enabling managers to focus on the important performance metrics that drive success and balances the financial perspective with customer, process, and employee perspectives. The BSC helps overcome some weaknesses of previous management approaches and provides a clear prescription of what should be measured to link individual, department, and overall performance with company strategy.
Kaplan and Norton suggest that we view organizations from the four perspectives shown in the figure below and develop metrics, collect data, and analyze them relative to each of these perspectives.