Balanced Scorecard and ISO 9001

Since early 2000, the Balanced Scorecard has found a wider application in ISO 9001 QMS.
Can it still be playing an important role also in 9001:2015 version?

Fig 1 – The Balanced Scorecard

Balanced Scorecard is a measure method proposed by Kaplan and Norton at the beginning of the 90 ‘.  Since then, this method was so widely accepted and effective that the Hardward Business Review hailed it as one of the 75 most influential ideas of the twentieth century.

The main objective of this method is to align measurements to strategy.  The measures are organized around four distinct perspectives: financial, customer, internal process, innovation and learning and it is composed by financial and nonfinancial measures.
The measures can be core outcomes (lag indicators), performance drivers (lead indicators).
The method is called “Balanced” as it balances external measures for stakeholder (financial and customer perspective) with internal measures (internal process, innovation and learning). Moreover, it is considered “Balanced’ as it balances the outcome measures (the results from past efforts) with performance drivers (measures that drive future performances).
The method says:
1) Express your strategy as a chain of cause and effect following 4 perspectives (Financial, Customers, Internal Business Process, Learning and Growth);
2) For each Perspective identified the Strategic Objectives that matches the strategy
3) for each Outcome identify the performance drivers.

Fig 2 – The method

In this method, diagnostic measures are considered measures that monitor whether the business remains in control and should activate an alert only when a threshold is overcome.
Enhance Strategic Feedback and Learning is a key concept of this method. The Balanced Scorecards enables Top Management to monitor and adjust the implementation of their strategy, and, if necessary, to make fundamental changes in the strategy itself (Fig 3).

Fig 3 – Strategic Feedback

This method starts from an established Strategy. So, it can be perfectly integrated with any method or technique used to support the strategy phase.  For exemple, the SWOT analysis.

The Balanced Scorecard was developed totally independently from the ISO 9001 system. In their book, Kaplan and Norton never mention the term Quality Management System.
How to explain that since early 2000 this method is gaining more and more space in the best practices suggested by ISO 9001 literature?
I think that, first of all, the Balanced Scorecard respects the PDCA model (a true pillar of the ISO 9001 system – Fig 4)

Fig 4 – The PDCA structure in the Balanced Scorecard

Second, it matches perfectly the requirement of the clause 8.1 of ISO 9001: 2008, particularly point b) and c) (Fig 5).

Fig 5 – Clause 8 of ISO 9001:2008

It matches as well the requirement of the clause 9.1 of ISO 9001:2015 (Fig 6).

Fig 6 – Clause 9 of ISO 9001:2015

To Know more:
Balanced Scorecard: a tool to support BIT strategy.
Balanced scorecard measures and statistical control charts.
Balanced scorecard and diversity.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.