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Balanced Scorecard

A performance management framework that links projects and metrics to the organization's strategic goals to ensure execution supports strategy.

Key Points

  • Translates strategy into concrete objectives and measures across perspectives (financial, customer, internal process, learning and growth).
  • Guides project and portfolio selection by showing how each initiative advances strategic goals.
  • Combines leading and lagging indicators with targets and initiatives to track outcomes and drivers.
  • Establishes a regular review cadence to realign resources and adjust projects based on performance.

Example

A PMO builds a Balanced Scorecard that includes targets for customer satisfaction, defect escape rate, release cycle time, and training hours. Agile teams prioritize backlog items that improve cycle time and quality, and the portfolio board approves only those projects that move the scorecard metrics toward the strategic targets.

PMP Example Question

Which tool best helps a portfolio manager ensure that selected projects directly support organizational strategy and are measured with both leading and lagging indicators?

  1. Risk register
  2. Balanced Scorecard
  3. Kanban board
  4. Work breakdown structure

Correct Answer: B — Balanced Scorecard

Explanation: The Balanced Scorecard links initiatives and metrics to strategic objectives, enabling selection and oversight of projects based on strategic contribution and performance measures.

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