I missed these off an earlier posting so I must come back to them...

Key principles of a good balanced scorecard

1. It is about balance

The reason it was called the ?Balanced Scorecard? is precisely because that is what it was trying to address. Its origins back around 1992 were to get organisations to focus on more than the financial measures and the processes. To redress the balance with measures of what the customers think and want. To add to this measures that reflected how the organisation was to learn, develop, change and grow.

That council is not alone. Research indicates many organisations that say they have implemented a ?balanced? scorecard have measures that are predominantly financial and process. As a consequence they are measuring what they are doing, rather than measuring what is making them change.

Which lead us to the second key principle

2. It is about cause and effect

It wasn?t long in the development of the scorecard, that it was realised that the old four-box model was a mistake. You have probably seen it around.

Financial Customer
Learning & growth Process

This model of the scorecard is all over the web from people who think of this as a scorecard. But just ask yourself, ?How do you choose what to put in each box?? ?How do these boxes relate to one another??

You are all smart people so you know, like, our client, that that changing what they did should end up affecting both costs and their customers. So a better way of thinking about things would be.

Financial
Customer
Process
Learning and growth

Of course this is what, by 1994 had become the basis of the strategy map. Sometimes, it was called the performance driver model in its early years.

As you will have spotted, this makes a major difference to how you think about the measures. For one, you are asking the question, how do these measures change behaviour and cause the higher pieces to behave differently? For another you start to ask what are the right measures in each of these perspectives?

We?ll cover more of this in the next newsletter

If you want to move your balanced scorecard on, bring it up to date and make it more effective. Whether that is to change behaviours, focus people of strategy, make management meetings more effective or just get a clearer view of performance in your organisation, in just a day, just go to Strategic Performance Management Specialists

By paying attention to just these two basic pieces, you will start to improve the value of your balanced scorecard in your business. Of course, you realise, there are other key principles that will make a difference. In your next few newsletters we will look at how strategy, people, focus and ownership affect things.

In subsequent newsletters we will set out

?Ten top tips for successful implementation and operation?.

Of course if you are impatient, we can do on-site seminars and workshops to help your organisation make sure your investment in performance management and its strategy make a real difference.

More soon

Phil Jones
Strategic Performance Management Specialists

P.S. As you think of others who would benefit from this report, please pass this on, or to get their own copy point them to Strategic performance management specialists

Our MD worked for the originators, Norton & Kaplan, for over 4 years. As you can imagine, not all of the underlying keys to success are explained in the books. We have helped clients improve their strategy and performance in organisations ranging from FTSE100 and international companies to dot.coms and a whole variety of public sector organisations.