The Balanced Scorecard translates a company's vision and strategy into a coherent set of performance measures. The four perspectives of the scorecard--financial measures, customer knowledge, internal business processes, and learning and growth--offer a balance between short-term and long-term objectives, between outcomes desired and performance drivers of those outcomes, and between hard objective measures and softer, more subjective measures. In the first part, Kaplan and Norton provide the theoretical foundations for the Balanced Scorecard; in the second part, they describe the steps organizations must take to build their own Scorecards; and, finally, they discuss how the Balanced Scorecard can be used as a driver of change.

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BUT companies that enacted BSc's started to tie them to corporate strategies, making them strategic management tools and not just measurement tools. One of the advancements was to tie define measures that measured the success of strategic intent as defined by specific objectives and goals. Another was to create cause and effect maps of the objectives, called "strategy maps."

Measurement is, of course, still an important part of the BSc, but the process of determining what to measure begins higher up the strategic ladder. KAPLAN AND NORTON THEMSELVES CHRONICLE THE GROWTH OF BSc INTO A STRATEGIC MANAGEMENT TOOL IN THEIR SUBSEQUENT WORK.

So, this book is a bit outdated, though it is still a useful introduction. However, I recommend that you try:
* Strategy Maps: Converting Intangible Assets into Tangible Outcomes by Kaplan and Norton

* The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, also by Kaplan and Norton

* Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results by Paul R. Niven

And a good introductory article to the idea of strategy mapping is "Using the Balanced Scorecard as a Strategic Management System", a Harvard Business Review article by Kaplan and Norton that is also available on Amazon.

57 of 60 found the following review helpful:

Not quite as easy as it looksMay 07, 2000
By Michael Gering
Many organizations are in the process of implementing the `Balanced Scorecard', yet some are struggling. Either they fail to implement the measures, or the measures fail to have the expected impact.

Organizations execute four 'mission critical' activities, for a scorecard to succeed. Each is more difficult than might appear and must be performed by a different part of the organization.

1. Articulating the strategy: Top management must articulate and disseminate the strategy. More than measuring success, a performance system communicates a strategy. Without a strategy, the performance measures become an `anything goes' exercise. `Anything goes in theory' means that `everything stays in practice'.

2. Designing the measures: A core task team must design the measures to avoid uneconomic behavior. Poorly thought out measures create counter productive activity.

3. Operationalizing the measures: Once measures are defined, programmers operationalize and automate them.

Even revenue can be complicated in practice: When is it recorded, and what does it include. The task team may well find themselves getting what they asked for, and not what they wanted.

4. Getting the buy-in: Change management skills are needed to align the changes and create buy in. Dilbert cynically states that there are two steps to a great performance measurement system. 1) Gather information and 2) ignore it. For performance measurement to work, the system must be accepted, understood, and aligned to the reward.

The book, `The Balanced Scorecard' by Kaplan and Norton has become compulsory reading for middle management. It is very good, with the one weakness that it makes performance measurement look deceptively simple.

68 of 73 found the following review helpful:

Overcome Poor Communications and Bureaucracy for New ActionsApr 12, 2000
By Donald Mitchell "Jesus Loves You!"
The Balanced Scorecard looks at the important issues of alignment, coordination, and effective implementation. Most business thinkers like to start with the big picture, and end there. As a result, most ideas for going in a new direction are quickly diluted by misunderstanding, falling back on old habits, and lethargy. Since Peter Drucker first popularized the idea of business strategy, there have been vastly more strategies conceived than there have been strategies successfully implemented as a result. Much attention has been paid to devising better strategies in the last four decades, and little to implementing strategies. The big pay-off is in the implementation, and The Balanced Scorecard is one of handful of books that provide important and valuable guidance to explain what needs to be done to successfully execute strategy. You must have more measures, and different measures than the accounting system provides. You also need to link measures and compensation to the key tasks that each person must perform. This book is simply the Rosetta Stone of communicating and managing strategy. The Balanced Scorecard is the beginning of the practical period of maturity in the field of business strategy. Read this book today to enjoy much more prosperity! I also recommend that you read The Fifth Discipline, The Fifth Discipline Handbook, and The Dance of Change to understand more about the context in which you are trying to make positive change. These four books are excellent companions for each other.

57 of 61 found the following review helpful:

How Do You know if Your Organization Is Winning or Losing?Jul 06, 2001
By Robert Morris
I read this book when it was first published (1996) and recently re-read it. As Kaplan and Norton explain in their Preface, "the Balanced Scorecard evolved from an improved measurement system to an improved management system." The distinction is critically important to understanding this book as well as The Strategy-Focused Organization which they later wrote. Senior executives in various companies have used the Balanced Scorecard as the central organizing framework for important managerial processes such as individual and team goal setting, compensation, resource allocation, budgeting and planning, and strategic feedback and learning. When writing this book, it was the authors' hope that the observations they share would help more executives to launch and implement Balanced Scorecard programs in their organizations.

The material is organized within two Parts, preceded by the excellent Preface and then two introductory chapters: "Measurement and Management in the Information Age" and "Why Does Business Need a Balanced Scorecard?" Logically, Part One examines measurement of business strategy; Part Two examines management of business strategy. Having read all of the 12 chapters, each concluded with a Summary of key points, readers are then provided with an Appendix: "Building a Balanced Scorecard." That process consists of a series of specific "tasks": (1) selection of the appropriate organizational unit, (2) identification of the SBU/corporate linkages, (3) completion of the first round of interviews during which key executives are briefed on the Balanced Scorecard program, (4) evaluation by the program's "architect" and other members of design team of feedback from various interviews, (5) conducting a "first round" workshop for the top management team, (6) conducting meetings during which the "architect" works with several subgroups, (7) conducting a "second round" workshop for members of the top management team, their direct subordinates, and an appropriate number of middle managers, (8) formulating the implementation plan, (9) conducting the "third round" workshop, and finally (10) Finalizing the implementation plan. Kaplan and Norton guide their reader through each stage of the process, suggesting all manner of strategies and tactics for consideration without inhibiting their reader from determining what is most appropriate for her or his own organization.

Although decision-makers in larger organizations will derive substantial benefit from this book, it would be a mistake to assume that the Balanced Scorecard would not be appropriate to small-to-midsize organizations. On the contrary, it may be even more valuable to them because they have relatively fewer resources available; therefore, the consequences of a failed strategy have greater (in some instances fatal) impact. The two concepts of "balance" and "scorecard" are critically important. All organizations must formulate and then effectively manage those strategies which enable them to achieve an appropriate balance of various resources while taking full advantage of measurement devices by which to obtain relevant as well as accurate and timely data for their strategies' scoreboard. Kaplan and Norton obviously have all this in mind when suggesting, in the Appendix, "core" measures for finance (e.g. ROI/EVA), customer relationships (e.g. customer retention), and learning and growth (e.g. employee satisfaction). Those who share my high regard for this book are urged to read Kaplan and Norton's sequel to it, The Strategy-Focused Organization. It continues their rigorous excamination of what a Balanced Scoreboard can help all organizations to accomplish with effective management of a correct strategy.

22 of 23 found the following review helpful:

Read it--Implemented it--Reaped the Rewards!Sep 19, 2000

This is one of those books, you can read and get "aha's" from start to finish. It's not the touchy-feely stuff non-quality believers think when they hear quality and measurements. The authors provide a step by step roadmap that is very well described and visually enhanced with some of the most outstanding charts I've seen. Between the well organized thought and flow of the book--the connections between strategy, tactics, CEO level, worker level, financial, customer, internal business processes, and organizational learning aspects are crystal clear. If you want to change your organization--or just improve what's important in your organization--this one is a must. And, it is not just a balanced measurement program--it leads to a balance management program--with everyone connected.

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