What is the Balanced Scorecard?

A performance framework that measures an organization across four perspectives — financial, customer, internal process, and learning and growth — not financial results alone.

Who created the Balanced Scorecard?

Robert Kaplan and David Norton, in a 1992 Harvard Business Review article, later extending it into a strategy-management system.

Why balance financials with other measures?

Financial metrics are lagging indicators; customer, process, and capability measures are leading indicators that predict future financial results.

Growth Marketing Glossary

Balanced Scorecard

bal·anced score·card/ˈbælənst ˈskɔɹˌkɑɹd/noun

Financial numbers tell you where you've been — the scorecard adds the measures that tell you where you're going.

Schematic — four balanced-scorecard perspectives in a quadrant

Term: Balanced Scorecard
Created by: Kaplan & Norton, 1992
Published in: Harvard Business Review
Four views: Financial, customer, process, learning

Forms & parts of speech

balanced scorecard · noun

A four-perspective performance framework.

"The balanced scorecard stopped us optimizing this quarter's revenue at the expense of customers and capability."

Definition in plain terms

The Balanced Scorecard is a strategy and performance-measurement framework that judges an organization across FOUR perspectives rather than financial results alone — Financial, Customer, Internal Process, and Learning & Growth. Robert Kaplan and David Norton introduced it in a 1992 Harvard Business Review article, arguing that financial metrics are lagging indicators of past decisions, so balancing them with leading measures of customers, processes, and capability gives a fuller, more forward-looking view of performance.

The mechanics

The four perspectives connect in a causal chain — investing in LEARNING & GROWTH (people, capability) improves INTERNAL PROCESSES, which improves the CUSTOMER experience, which drives FINANCIAL results. By setting objectives and measures in each, the scorecard stops an organization from over-optimizing short-term financials at the expense of the customer relationships and capabilities that produce future financials. Kaplan and Norton later extended it from a measurement tool into a strategy-management system (strategy maps, cascaded objectives). For marketing, it is a reminder to balance the financial metrics with customer and capability measures that lead them.

When it matters

The Balanced Scorecard matters for translating strategy into a balanced set of measures and resisting the gravitational pull of financial-only thinking, which rewards squeezing the current period at the cost of the future. For marketing teams it frames a healthier dashboard — revenue and efficiency alongside customer (satisfaction, retention, brand) and capability (skills, systems) measures whose health predicts tomorrow's revenue. The risk is turning it into a bloated checklist of metrics with no causal logic; its value comes from a few connected measures per perspective that genuinely link cause to effect, not a wall of numbers.

Worked example. A marketing organization is run almost entirely on this quarter's revenue and cost, so it quietly underinvests in customer experience and team capability to hit short-term numbers — and growth stalls as those neglected foundations erode. It adopts a balanced scorecard, adding customer measures (retention, satisfaction, brand health) and learning-and-growth measures (skills, tooling) alongside the financials, linked in a causal chain. Decisions change: the team protects the customer and capability investments that lead future revenue rather than sacrificing them for the current period. Performance becomes more durable, because the scorecard made the leading indicators of financial results visible and accountable.

Failure modes to watch. Turning the scorecard into a bloated wall of disconnected metrics; keeping the four perspectives without the causal links between them; still optimizing financials alone while paying lip service to the others; and measuring what is easy rather than what leads results.

Synonyms & antonyms

Synonyms

balanced scorecardBSCfour-perspective scorecard

Antonyms

financials-only measurementsingle-metric management

Origin & history

Created by Robert S. Kaplan (Harvard Business School) and David P. Norton in their 1992 Harvard Business Review article 'The Balanced Scorecard — Measures That Drive Performance', based on a multi-company research project; it spread to thousands of organizations and the authors later extended it into a full strategy-management system.

Etymology: source.

Usage trends

Search interest for this term over the last five years:

View interest-over-time on Google Trends →

Common questions

What is the Balanced Scorecard?: A performance framework that measures an organization across four perspectives — financial, customer, internal process, and learning and growth — not financial results alone.
Who created the Balanced Scorecard?: Robert Kaplan and David Norton, in a 1992 Harvard Business Review article, later extending it into a strategy-management system.
Why balance financials with other measures?: Financial metrics are lagging indicators; customer, process, and capability measures are leading indicators that predict future financial results.

Related tools & calculators

toolA/B test sample size

Resources & people to follow

referenceKaplan & Norton (1992), Harvard Business Review
referenceBalanced Scorecard Institute resources
referenceRGM analysis — a few causally-linked measures, not a wall of numbers

Curated, non-competitor resources verified per term.

Related training

modulePerformance marketing

Disciplines

Areas of marketing where balanced scorecard is a core concern:

Performance marketingGrowth strategy

Sources

trendsGoogle Trends — "balanced scorecard"