Balanced Scorecard

When Robert Kaplan and David Norton published “The Balanced Scorecard: Measures that Drive Performance” in the Harvard Business Review in 1992, the idea of measuring business performance from financial and nonfinancial perspectives was novel. Their original balanced scorecard significantly advanced the notion that effective performance measurement must provide a view of both. Today, the balanced scorecard is one of the most widely used and hotly debated management tools in the executive arsenal. Countless permutations of the original Kaplan and Norton framework, in an equally varied multitude of applications, have been tried by all kinds of organizations. Although the original balanced scorecard concept was meant to assess the health of an entire business, the basic concept has been adapted to fit business units and support organizations. When it works, the scorecard is a powerful resource to help executives understand past and current performance, and plan for the future.

Do scorecards fail?

As is the case with any business tool, however, the scorecard is not a magic wand; its value depends heavily on how it is implemented and an incorrect / careless implementation could take the organization for a ROYAL RIDE!