Explore the wider topic in our business growth strategies guide.
Download: Balanced scorecard worksheet (CSV)
Edit the worksheet for your business and use it alongside the steps below.
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The four balanced scorecard perspectives
Robert Kaplan and David Norton introduced the balanced scorecard in Harvard Business Review in 1992.
The financial perspective asks what economic results the strategy needs to produce. The customer perspective examines the value and experience customers receive. Internal processes focus on the work that must perform well. Learning and growth considers the people, information and capability needed to sustain improvement.
The four perspectives help prevent a review from becoming only a retrospective profit report. They are not a requirement to give every category the same number of measures. Start with the strategy and the relationships you believe connect actions with results.
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A balanced scorecard example
Imagine a hypothetical service business whose strategy is to win repeat work by delivering reliably. The figures below are illustrative planning targets, not industry benchmarks or a client case.
| Perspective | Objective and measure | Illustrative baseline → target |
|---|---|---|
| Financial | Improve operating margin, measured consistently each month. | 10% → 12% |
| Customer | Increase repeat customers as a share of customers eligible to return. | 55% → 65% |
| Internal process | Complete jobs by the agreed delivery date. | 82% → 92% |
| Learning and growth | Ensure critical jobs have two trained people able to perform them. | 50% → 80% |
The proposed connection is that broader capability supports reliable delivery, which supports repeat work and financial performance. That is a hypothesis to test, not a guaranteed causal chain.
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How to build a balanced scorecard
- State the strategic choices. Name the customers, value proposition and operating priorities.
- Map the intended relationships. Explain which capabilities and processes should support customer and financial outcomes.
- Choose a small useful set of measures. Keep those that inform decisions.
- Define each measure. Specify the numerator, denominator, source, period and exclusions.
- Set baselines and targets. Use actual information and realistic assumptions.
- Assign owners and review dates. Agree what happens when a measure changes.
Our strategy map guide helps make the relationships visible before the scorecard is populated.
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Balanced scorecard vs a KPI dashboard
A KPI dashboard can show important operating measures without explaining their relationship to strategy. A balanced scorecard is intended to connect measures with strategic objectives across perspectives. A list of twenty numbers placed into four boxes is not enough.
For example, training hours are an activity measure. The ability to perform a critical task reliably is closer to the capability the business needs. Both may be useful, but the team should know why each is included and what action a change would trigger.
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Use the template without creating reporting burden
Download the CSV worksheet and open it in your spreadsheet software. Create one row per objective and measure. Add the definition, baseline, target, owner, review date and action. Keep a record of changes to definitions so trends remain interpretable.
Use information the business can collect reliably. If a measure is important but unavailable, assign a practical way to establish it. Do not fill the gap with a confident-looking estimate and then treat it as a baseline. Review whether the effort to collect the measure is justified by the decisions it supports.
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Review exceptions and assumptions
Look at the measures together. If delivery improves but repeat work does not, investigate the assumed connection: customer need, quality, price or the measurement itself may be different from what the team expected. If margin improves while service deteriorates, a short-term saving may be creating a future problem.
Record the action, owner and review date rather than only changing a traffic-light colour. Connect agreed work with a 90-day action plan. Refresh the scorecard when the strategy changes, while preserving enough history to understand performance.
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Make it useful for owners and the board
The board and management may need different levels of detail. A board reporting pack should explain the implications, decisions and risks behind the measures. Operational teams need the detail required to act.
We help owners connect business growth strategies with measures and a review rhythm that supports decisions. The aim is a clearer view of progress, not more reporting for its own sake.
Common questions
Does a balanced scorecard need specialist software?
No. A clearly defined spreadsheet can be enough to start. Reliable definitions, ownership and review matter more than the software.
How many KPIs should it contain?
Use the smallest set that explains the strategy and informs decisions. There is no universal number; remove measures that add reporting work without changing action.
Can non-financial measures be leading indicators?
Yes, if there is a plausible connection with later outcomes. Test that relationship over time rather than assuming an activity measure predicts results.
Your next move
Connect your strategy with useful measures
Bring your strategy, current reports and the measures the team struggles to use. We can help choose a clearer set of objectives, definitions and review actions.
Connect your strategy with useful measures