How to Build a Balanced Scorecard Step-by-Step – Intrafocus

Creating a Balanced Scorecard (BSC) is not just about filling out a spreadsheet with metrics — it’s a structured process that connects strategy to what is the balanced scorecard outcomes. When done correctly, the BSC becomes a living tool that drives alignment, focus, and execution across an organisation. Intrafocus recommends a step-by-step approach to ensure clarity and adoption.

Step 1: Clarify Your Mission, Vision, and Strategy

Before you choose measures, you must know what you’re trying to achieve. This means defining:

Mission – Why the organisation exists.

Vision – Where you want to be in the future.

Strategic Themes – High-level focus areas (e.g., customer excellence, operational efficiency, innovation).

Without this foundation, your scorecard risks being a disconnected set of numbers.

Step 2: Identify Strategic Objectives

Strategic objectives are broad, continuous goals that sit within the four BSC perspectives:

Financial

Customer

Internal Process

Organisational Capacity (Learning & Growth)

For example, under the Customer perspective, an objective might be “Increase customer retention.” Each objective should be specific enough to guide action but broad enough to inspire multiple initiatives.

Step 3: Create a Strategy Map

A strategy map visually links objectives across perspectives, showing cause-and-effect relationships. For instance:

“Enhance staff training” (Organisational Capacity)

→ “Reduce service response time” (Internal Process)

→ “Improve customer satisfaction” (Customer)

→ “Increase market share” (Financial)

This map becomes a communication tool, making strategy clear to everyone.

Step 4: Define Measures (KPIs)

For each objective, identify Key Performance Indicators (KPIs). Good KPIs are:

Specific – Exactly what’s being measured.

Measurable – Quantifiable with clear data sources.

Actionable – Can influence decision-making.

Example: For “Increase customer retention,” a KPI might be “Annual churn rate (%)”.

Step 5: Set Targets

Targets turn KPIs into performance expectations. They should be ambitious yet achievable.

For example:

Baseline churn rate: 15%

Target churn rate: 10% within 12 months

Targets provide a benchmark for tracking progress and identifying gaps.

Step 6: Link to Initiatives

Initiatives are projects or programs that drive progress toward objectives.

For example:

Objective: Improve operational efficiency

Initiative: Implement automated workflow system

Each initiative should clearly link back to a strategic objective, ensuring resources are used effectively.

Step 7: Review and Refine

A Balanced Scorecard isn’t static. Intrafocus recommends quarterly reviews to:

Assess KPI progress

Evaluate initiative impact

Adjust objectives or targets as business conditions change

The Payoff

Following this process transforms the BSC from a theoretical tool into a practical strategy execution system. It aligns daily activities with long-term goals, improves transparency, and ensures everyone understands their role in achieving the vision.