The concept was first introduced by David Norton and Robert Kaplan in a 1992 Harvard Business Review article called ‘The Balanced Scorecard’. The article was based on a multi-company research project to study performance measurement in companies whose intangible assets played a central role in value creation. Norton and Kaplan believed that if companies were to improve the management of their intangible assets, they had to integrate the measurement of intangible assets into their management systems.
After the publication of the 1992 HBR article, several companies quickly adopted the Balanced Scorecard giving us deeper and broader insights into its power and potential. During the next 15 years, as it was adopted by thousands of private, public, and nonprofit enterprises around the world, we extended and broadened the concept into a management tool for describing, communicating and implementing strategy.
What are the benefits
The Balanced Scorecard is more than just a performance measurement tool. It is also one of the best strategy communication tools that a manager can have. Translating the strategic objectives into specific measures (KPIs) and targets, allows the managers to have a clear, quantifiable goal, behind each little piece of its strategy. For employees, the Balanced Scorecard is also the reference to align their personal objectives, activities and special initiatives towards the Company’s Vision.
Acting as a GPS, the Balanced Scorecard is used today by managers who want to monitor progress against the strategy. In an annual cycle, the Balanced Scorecard has two main roles to play. At the beginning of the strategic planning cycle, the Balanced Scorecard serves as the repository of the ultimate measures and goals of the strategy. Then, during the execution phase, the Balanced Scorecard serves as a continuous platform to report progress against the plan.
How we do it
Our consultants have more than 16 years of experience developing and implementing the Balanced Scorecard, all over the world. We have worked with hundreds of private and public organisations implementing their Balanced Scorecard. Today we look at the Balanced Scorecard as one of the most important performance monitoring tools that a manager should have.
We understand that managers cannot make decisions looking at dozens of KPIs. As experienced practitioners in this field, we know that one of the most common problems when implementing the Balanced Scorecard is COMPLEXITY. In today’s world managers have limited attention and time bandwidth. Remember, it is not about measuring everything; it is about measuring what really matters. Working closely with your team, our consultants can help you design the Balanced Scorecard that is right for your organisation; one that can really boost your decision making capabilities with simplicity and soundness.
How can we help you?
ShiftIN Partners has no vested interest in any given methodology; we are guided only by our expertise in choosing the solution that best meets the client’s needs. Some of our most popular services around the Balanced Scorecard are:
Balanced Scorecard at a large Government Ministry in the Middle East
The Ministry is in charge of the Judicial Sector across the country, whereby enhancing its strategy and execution capabilities was a fundamental aspect to deliver its government outcomes: ‘Accessible Justice for All’.
Working closely with the Ministry’s team, we developed the first Strategy Map and Balanced Scorecard, set up the Strategy Delivery Office, supported a number of strategic initiatives for the whole Judicial Sector, facilitated the implementation of the Enterprise Performance Management Technology System and created automated reporting to the Board, Management and Stakeholders.
Using the Balanced Scorecard to boost agility in a logistics operator
For this Oil & Gas logistics multinational leader, winning is all about speed and quality of service. After developing an ambitious Vision whereby revenues were expected to multiply by 2.5x in 5 years, the leadership team needed a framework to communicate and measure the new strategy. Using the Balanced Scorecard as a platform to operationalise strategy, our consultants established BU-specific goals that were linked to the compensation of each head of business. A Strategy Delivery Office was also established to monitor, facilitate and report the business performance. After 3 years since, the company has been growing in line with the target defined while there is strong evidence of higher cross-business collaboration, accountability and increased customer focus.
Acquire the capabilities
To develop these key managerial skills and competences, ShiftIN Partners offers an array of education and training opportunities to help your organisation bolster its execution strengths, at all levels of the leadership pipeline, from senior-most managers to the strategy leaders of tomorrow.
Professor Bob Kaplan discusses the importance of the Balanced Scorecard. In this video he presents the importance of intangible assets and the challenges in measuring its value. If you can’t measure something you can’t manage it. Learn how by using the Balanced Scorecard, organisations can establish a comprehensive framework whereby it can measure intangible assets such as customer loyalty, employee engagement and innovation.