Any business owner or leader understands the organization can be busy without making consistent progress toward important goals. Therefore, performance indicators are a valuable measurement of the organization's overall health. By using objective and external performance indicators, a school can measure its performance. External performance indicators provide accountability and give a school a consistent yardstick to measure success. Internal evaluations performed by staff on its own efforts tend to be colored by emotional and subjective values that may not identify areas requiring change. External indicators provide valuable information for important policy decision-making decisions.
One of the ideas forming the basis of the No Child Left Behind Act of 2001 was that school is responsible to parents as a business is responsible to its customers. The school's customers are not its students. Parents pay for schools with tax dollars and expect their children will be educated and prepared for transition into adulthood. The customer perspective is one of the domains introduced in the balanced scorecard. Organizations should view activities from a customer's point of view. When schools embrace this perspective, staff becomes more in tune with the school's strengths and weaknesses.
Comparing a school to a business is a bit like comparing apples and oranges. A business must be profitable and produce items or services beneficial to its customers. These transactions are much simpler to identify than the value and process of educating students. Students entering elementary education will not be a "completed product" until graduation from high school 12 years later. Students posses various levels of scholastic aptitude, both unique gifts and individual learning styles, that must be taken into consideration. If a static, objective scorecard is used to measure a school's progress, this scorecard may miss the subjective nuances necessary to measure individual academic achievement.
A balanced scorecard is an excellent tool for education administrators to use in separating the ideas of the school's overall objectives and performance, and it gives the tools necessary to reach performance metrics. By using external, objective scorecards, school administrators can separate the school's subjective, altruistic objectives from performance. Staff are able to clearly see if one area of the school's performance is lagging behind local or national standards. The value of an objective, balanced standard is it increases the staff's ability to evaluate its own performance, leading to improvements benefiting students and the community.