Balanced Scorecard

A balanced scorecard (BSC) is a strategic management tool used to measure and enhance business performance. It evaluates key areas such as financial outcomes, customer satisfaction, internal processes, and learning and growth.

Is a balanced scorecard a KPI?

No, a balanced scorecard (BSC) is not a KPI itself — but it includes KPIs.

Here’s the difference:

• A KPI (Key Performance Indicator) is a specific metric used to measure performance (e.g., customer retention rate, revenue growth).
  
• A Balanced Scorecard is a strategic framework that organizes multiple KPIs across four key perspectives:
  
  1. Financial
     
  2. Customer
     
  3. Internal processes
     
  4. Learning and growth
     

So, the balanced scorecard uses KPIs to track progress toward strategic goals across different areas of a business. Think of it as a dashboard that helps leadership view performance from multiple angles — with KPIs as the instruments providing the data.

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Why is a balanced scorecard important?

A balanced scorecard is important because it gives a 360° view of performance—not just financials. It aligns strategy with execution by tracking key metrics across four areas: financial, customer, internal processes, and learning & growth. This helps teams focus, stay accountable, and make better, data-driven decisions.