The name “balanced scorecard” already suggests an important characteristic for the successful implementation of business strategies: the right balance. So far, we have only considered one aspect of the scorecard: the measurement of values within selected perspectives. However, the perspectives are not chosen in an arbitrary manner. Instead, they need to be balanced to enable as complete an evaluation as possible.Analysis using abalanced scorecard is intended to prevent an excessively one-sided assessment of the company’s performance – for instance, by only considering returns. Experience has shown that such a restricted view only has limited benefits. In many cases, financial aspects alone do not appropriately reflect the success of business strategies.
Besides, simply measuring key indicators is not enough to make a strategy successful. The balanced scorecard method provides management information on aspects that require work in future and on which changes are necessary in order for a suitably adjusted strategy to move the company forwards. Balance therefore not only plays a role in assessing the company but also in its development. To prevent the development of the company from only progressing within a small area, it is important to not only define multiple perspectives but also formulate goals from the different perspectives. This ensures that an actual measured value is always accompanied by a target value. If it becomes clear that a goal will not be achieved in a certain area, swift action can be taken, avoiding a situation in which individual business areas remain underdeveloped.
Apart from the goals, responsibilities must also be defined. Especially in larger companies, it is almost impossible for a single person to manage the entire business and take care of all business areas; it is therefore necessary to define who is responsible for ensuring the business goals are achieved in each of the areas.