What is a "balanced scorecard"?

A balanced scorecard is a strategic planning and management tool that helps organizations measure their performance across multiple perspectives, providing a more comprehensive view of overall organizational health. This approach typically incorporates financial metrics as well as non-financial dimensions, including customer satisfaction, internal processes, and employee learning and growth.

By looking at a variety of factors rather than focusing solely on financial performance, a balanced scorecard enables organizations to align their business activities with their strategy and objectives. This multidimensional perspective fosters better strategic alignment and helps identify areas needing improvement, thereby enhancing long-term performance and success. The balanced scorecard ultimately acts as a framework for translating an organization's vision and strategy into a set of coordinated actions and metrics, making it a vital tool for comprehensive performance management.