The concept of Balanced Score card was introduced by Kaplan and Norton in the year 1996, and is defined as "integrated management method based on key performance indicators which analyzes the strategy of a company or company unit as well as relevant external and internal aspects and identifies how these interact." (Glossary, 2008)
The balanced scorecard includes qualitative insights in addition to quantitative measures like financial statements to give the decision makers a bird's eye view of the past health and also the future course of action of the company.
While financial measures like Return on Investment, sales and profit values, continue to be critical, new units like quality measures (warrantee/replacement/return/refund costs), employee skill and satisfaction measures (attrition/training/redeployment cost), future growth measures (R&D costs) are also taken into account.
Wells Fargo and company is a diversified financial services company based at San Francisco, California and offers a range of financial products. The company has been termed as one of the safest banks in the world. (The World's Safest Banks 2007, October 2007)
Wells Fargo bank used Balanced Score Card to identify its future growth path. Within 3 years of implementing the insights it got from a BSC, it was voted as the best online bank. As a result of the BSC, it increased its customer base by 4.5 times, and also decreased its cost per customer by as much as 22%. Additionally, it was able to add over 750,000 online customers over a 2 year period. (Beiman I. and Johnson J.C., n.d.)
The conventional manufacturing strategy model states that there i ...