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Is the Scorecard a busted flush?

Twelve years on and four books later, Kaplan and Norton’s Balanced Scorecard is probably the single-most successful business methodology, based on global adoption. And yet results appear to be disappointing, despite the plethora of documentation, consultancy and training available. Is the Scorecard a busted flush, or can it be redeemed?

I looked at this problem a couple of years ago and undertook a Masters research project to investigate why the BSC outcomes are so widely variable. My project dissertation was entitled: “a systematic approach to balanced scorecard evaluation.”

From my research, and from direct experience with BSC adopters, I believe that there are inherent weaknesses in the methodology but I have identified ways of significantly improving BSC evaluation by taking a Systems-based approach that wraps around the Balanced Scorecard and forges the missing links.

So there is no need to throw the baby out with the bathwater, maybe adopters just need to add the right mix of complementary solutions. 

Are you happy with your Balanced Scorecard, or is it fated for the trashcan?

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  • Philip Standing

    I have always thought that the K&N book could have been written in about 30 pages. It is, however, a brave attempt to condense into simple format what Operations Researches have known for decades, that is, optimisation. What K&N do not appear to address well is the fact that any BSC is a snapshot. As such, it is of limited use next month when business conditions have changed and the optimal position actually changed with them. Of course, like any journey, things get difficult from the start if you don’t actually know where you are starting from, this makes the subsequent navigation rather hard. In many entreprises, considerable rigour is actually needed to know the initial point, then more of the same to establish where it has just moved to, and the direction it’s going in. In most capital and major engineering fields, these techniques are well known and proven, but not alas in many others. The dynamic aspects of optimisation management mean it is a process of continuous change and – dare I say it – of continuous improvememt. The quarterly, or worse yet annual, reviews of where the business is are really inadequate if the business environment is dynamic. An out of date scorecard is more hindrance than help.

    • http://www.colin-beveridge.com colinb

      thanks for your time and contribution, Philip.

      Your points are extremely well made, especially the dynamic perspective. I share your view that the BSC lacks fundamental features. Unfortunately most BSC implementations that I have seen have not really grasped even the basics.