Balanced Scorecards vs. Dashboards

The terms “Balanced Scorecard” and “Dashboard” have become increasingly popular as organizations discover their ability to communicate complex information visually and as more and more software packages boast versions of one or the other. The terms are sometimes used interchangeably, but there are important distinctions between a Balanced Scorecard and a Dashboard.

Components of a True Balanced Scorecard
While both Balanced Scorecards and Dashboards display performance information, a Balanced Scorecard is a more prescriptive format; a true Balanced Scorecard should always include these components: Perspectives (groupings of high-level strategic areas), Objectives (verb-noun phrases pulled from a strategic plan), Measures (also called Metrics or Key Performance Indicators/KPIs), and Stoplight Indicators (red, yellow, or green symbols that provide an at-a-glance view of a Measure’s performance). These specific components help ensure that a Balanced Scorecard is inherently tied to the organization’s critical strategic needs.

Dashboards – More Loosely Defined
The design of Dashboards, on the other hand, is much more open to interpretation. Most Dashboards are simply a series of graphs, charts, gauges, or other visual indicators that a user has chosen to monitor, some of which may be strategically important, but others of which may not. Even if a strategic link exists, it may not be clear to the person monitoring the Dashboard, since the Objective statements, which explain what achievement is desired, are typically not present on Dashboards.

However, there are ways to ensure that Dashboards include the critical connections to strategy. For example, ActiveStrategy software enables a business user to easily design and save their own personalized Balanced Scorecard Dashboard, which is an all-in-one view that contains both a complete Balanced Scorecard as well as critical graphs, gauges, and measure trend information, as shown in the screenshot to the left.

A Simpler Dashboard View
Organizations have many types of users – some may need to monitor specific metrics or KPIs closely, but do not need to view the level of strategic detail found on the Balanced Scorecard on a day-to-day basis; for them, customized Dashboard views may be designed that contain only relevant charts and graphs, as seen in the screenshot to the left. Building these in ActiveStrategy software allows these charts and graphs to be linked up to strategic Objectives, so business users at various levels may drill up or down to these details when needed.

• Turning a Strategy into a Scorecard
• Building a Top-Level Scorecard
• See examples of Balanced Scorecards