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The Balanced Scorecard came into being in the late 1980s and early 1990s as
a method to help companies manage their increasingly complex and
multi-faceted business environments.
Kaplan and Norton perceived that employees throughout
a company often did not understand how their role related to strategy and
financial measures, leading employees to feel powerless to impact the things
that were being measured.
So, Kaplan and Norton introduced the Balanced
Scorecard as a way for companies to measure and report performance in a way
that balanced:
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Multiple perspectives.
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Both leading and lagging indicators.
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Inward-facing measures, like productivity, and also
outward-facing measures, like customer loyalty.
The results of their initial research work with 12
companies were published in 1992 in the Harvard Business Review.
Fueled by the positive response to their initial article and successful
consulting work, Kaplan and Norton continued to develop the concept of the
Balanced Scorecard, and published the book, The Balanced Scorecard in
1996. By that time, the focus of the Balanced Scorecard had evolved from an
emphasis on measures and reporting, to a methodology for promoting strategic
management of the organization.
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As more and more organizations began to embrace and
experiment with the Balanced Scorecard concept, a growing number of tools
and techniques emerged, building on many of the initial concepts. In 2000,
Norton and Kaplan released their second book, The Strategy Focused
Organization, which describes that evolution to a broader concept of
enterprise strategic management.
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