News from the attic: The balanced scorecard

We are now used to the idea of the balanced scorecard – the idea of trade-offs between different measures of performance rather than the single-minded pursuit of just one measure. The idea was presented in the Jan-Feb issue of Harvard Business Review in 1992 by Robert S Kaplan and David P Norton. They suggested four perspectives:

The financial perspective – how do we look to shareholders?
The customer perspective – how do customers see us?
Innovation and learning perspective – can we continue to improve and create value?
Internal business perspective - what must we excel at?

They suggested that there should be goals set under each one of these perspectives and measures identified for each goal. This could then be used to create a “dashboard” to provide managers with information about the critical areas of business performance.

This seems a great idea; but how many businesses 20 years on use it? Does it survive outside business school courses? I’d be interested to hear if you use it in your organisation and to what effect.

News from the attic: The balanced scorecard

Calvert Markham