Putting the Balanced Scorecard to Work: 11 Great Tips

Editor's Note: Take a look at our featured best practice, Balanced Scorecard (34-slide PowerPoint presentation). What is the Balanced Scorecard (BSC)? The Balanced Scorecard is a strategy performance management tool--a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their [read more]

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Putting the Balanced Scorecard to work can be quite a challenge.

Yes, the Balanced Scorecard has been around for a long time.

Yes, there are many Balanced Scorecard example out there.

But that doesn’t change the fact that most organizations struggle to put the Balanced Scorecard to work and get all the promised benefits.

This article wants to change that!

Here’s a list with 11 Balanced Scorecard tips to help you putting the Balanced Scorecard to work in your organization.

Putting the Balanced Scorecard to Work: 11 Tips

Once you have a solid business strategy, it’s time to break down the strategy into smaller bits for the N-1 organizational level.

The process stops at the lowest organizational level, the teams.

In the end, the size of your company defines the cascade.

In addition to cascading the strategy, you need to select the right KPI’s – key performance Indicators −  to track the objectives.

The Balanced Scorecard is the best know technique to achieve this.

BSC  Tip 1: Don’t use the initial Balanced Scorecard book as a reference

Knowledge evolves.  The first Balanced Scorecard book is not the reference. New best practices have emerged so start your project with up-to-date knowledge.

BSC Tip 2: Watch out for the Balanced Scorecard expert

Many people tried to take advantage of the Balanced Scorecard hype. Amazon has over 4,000 books related to the Balanced Scorecards. Take some time. Digg in. Listen to different ideas. Build your own view. Remember, just because a scorecard approach works well in one company, it doesn’t mean it work well I yours.

BSC  Tip 3: Manage the Balanced Scorecard as a change event

A Balanced Scorecard always impacts the way leaders manage their business – so the implementation effort will therefore demand a change effort from everyone. To increase your success rate, focus a lot on the change management side of putting the Balanced Scorecard to work. It will drastically increase your success rate.

BSC Tip 4: Managing change requires strong leadership

There is no change without strong leadership. Simple, right?

BSC Tip 5: Communicate the Balanced Scorecard process first

Start immediately to communicate the benefits of the Balanced Scorecard. Provide training and information sessions. No-nonsense communication prevents misunderstandings and creates buy-in.

BSC Tip 6: What kind of Balanced Scorecard do you want?

A Balanced Scorecard offers four distinct benefits. It’s impossible to go after them at the same time. Know what is the most important for your company. Choose carefully. Once you make a choice, stick to it. Deliver first before moving on. I like to focus on the cascading and learning part first, on the communication second, moving onto the measuring part last.

BSC Tip 7: Define your Balanced Scorecard architecture

It’s crucial to select a cascading approach before you start. There are several options.  Your choice will depend on the overall ambition. For example, cascading by regions will help you empower a geographical approach, cascading by business lines will help you achieve higher autonomy and accountability for your profit centers. Cascading themes, like innovation, customer experience or green economy, will help you improve the coordination between several apparently disconnected organizational units around a particular theme.

BSC Tip 8: Avoid ‘basic’ mistakes

There are thousands of companies that have struggled with putting the Balanced Scorecard to work in their organization. Take advantage of their learnings and avoid classic pitfall. Here’s a short list:

• Senior leaders are not convinced yet (so get them on board first!)
• The Balanced Scorecard is developed by ‘the happy few’ (do a pilot first but involve all managers as soon as possible)
• The internal team have limited Balanced Scorecard experience. (get an experienced, no nonsense Balanced Scorecard member in your team)
• The Balanced Scorecard is only used by top management (see point 2)
• The Balanced Scorecard stays too long at the development stage before being launched and used. (It takes time to get it perfect, but the best way forward is by doing. So get out there, involve your managers and improve next year)
• There are not enough links to the strategy and planning processes (connect the dots)
• The content of the Balanced Scorecard is unrealistic (challenge it)
• The Balanced Scorecard is only used for remuneration purposes (go beyond, have a look at the 4 benefits (BSC tip 6), pick one and move forward)

BSC Tip 9: Use the right words

There’s a big difference between an objective, a measure and a target. A short overview of the key words and what they mean helps to avoid confusion. Choose the right words that fit your company and stick to them.

BSC Tip 10: What’s your Balanced Scorecard ambition?

Your ambition should not be the Balanced Scorecard hall of fame. Your ambition is to successfully execute the strategy. If that works with a ‘boring’ Balanced Scorecard, that’s too bad.

BSC Tip 11: Set the Scorecard expectations right from the start

Be honest with everyone involved about the possibilities of the Balanced Scorecard. Starting may take a few weeks, but getting to the real benefits will take longer. Don’t oversell yourself. Make your stakeholders aware upfront that implementing a Balanced Scorecard is a change journey to be approached as a marathon not a sprint.

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Performance Management (also known as Strategic Performance Management, Performance Measurement, Business Performance Management, Enterprise Performance Management, or Corporate Performance Management) is a strategic management approach for monitoring how a business is performing. It describes the methodologies, metrics, processes, systems, and software that are used for monitoring and managing the business performance of an organization.

As Peter Drucker famously said, "If you can't measure it, you can't improve it."

Having a structured and robust Strategic Performance Management system (e.g. the Balanced Scorecard) is critical to the sustainable success of any organization; and affects all areas of our organization.

Learn about our Performance Management Best Practice Frameworks here.