Balanced Scorecard

 What’s it all about?

A technique for monitoring your organisation’s performance by focusing on the most important measures.

What you measure is what you get.

What gets measured gets managed.

What gets measured gets manipulated.

The most important thing to know.

The main point to grasp is that a Balanced Scorecard is a list of measures, not a list of things you should do.

Measures, not Actions.

Assume that we decided that I needed to lose weight. My OBJECTIVE  = lose weight.

There are several ways I could do that. Diet, exercise, liposuction, amputation.

We decide on exercise as the method. This is then my STRATEGY.

We then have to decide how I am going to exercise from the long list of exciting things I could do. We decide on walking. That’s the ACTION I am going to take.

We could set a TARGET, say 10,000 steps a day.

What would we record in the Balanced Scorecard?

We would record our success against the Action; that is, we measure what we have done not just say what we are going to do.

The Balanced Scorecard wouldn’t say ‘Lose weight’ or ‘Exercise’ or ‘Go for a daily walk’. Those are Actions, not Measures.

We do show the Measure and the performance against the Target in the reporting period.

Essentially we would show in the report ‘Number of  steps I have walked’, or ‘Percentage of target achieved’, or ‘Steps not walked’, or ‘Number of days target achieved’ or whatever measure gives you the most useful information for your decision making. You will see that each gives a slightly different emphasis. 

 

Introducing the concept.

The Four Perspectives.

These are the aspects of the overall ‘business’ that we look at.

Financial.

The financial performance of the organisation.

It doesn’t mean that every number reported has to have a £ sign in front of it. Non-financial measures could appear here too.

For example you could record sales in £’000 or in units.

Both would tell us about the financial performance, but the units version is non-financial. A measurement in units might also be easier to compare over the years as it is not affected by inflation/exchange rates as numbers recorded in a currency would be.

Internal Business

Monitoring the practical activities of the organisation.

The measures obviously depend on the nature of your work, but would be focused on the things you actually do.

Customer

This is about how the customer sees us. Customer can be drawn fairly widely, so it is anybody we are providing a service to.

Learning and Growth

This is about the knowledge and capabilities of the organisation.

It encompasses the level of qualification/experience of the employees, the patents and other rights owned by the organisation.

Remember though, it is about us, not about any learning or groth we give to anybody else.

When a student at a university gets a degree, it doesn’t aid the university’s Learning & Growth. The student is a customer, not part of the organisation.

If I, as a lecturer, get another qualification, it does count as Learning & Growth as the employer gets to use my new knowledge to improve their business.

Measures that tell you more than one thing.

As you look at measures you will often find that they could go under more than one perspective.

We wouldn’t put them in the Balanced Scorecard twice though a that would eb a waste of an opportunity for another measure. But any measure that tells about more than one thing is very useful.

For example a measure of number of first year students passing to the second year would tell us about three of the four perspectives.

Financial – students going into the second year will be paying fees next year.

Internal Business – good pass rates indicate the university is teaching to standard.

Customer – presumably students who pass will be happy customers and students who don’t are likely to be unhappy.

It doesn’t tell us about our Learning & Growth though, as the students are not part of the organisation.

Using the Balanced Scorecard in non-commercial situations.

“These four traditional BSC perspectives work fine in the commercial world, neatly capturing a company’s long-term value creating business model, which is why it has proven to be so popular with businesses. And with minor modification, strategy maps and scorecards have also proved helpful in the public sector, particularly by introducing non-financial metrics that enable a government agency or NGO to be accountable for its performance for citizens and constituents.”                                                       Kaplan and McMillan 3/2/21

https://hbr.org/2021/02/reimagining-the-balanced-scorecard-for-the-esg-era

Problems with designing measures.

Measures that tell you facts that don’t help you with your decision making.

  1. The McNamara Fallacy.

Named after a senior American politician who used one quantitative measure to determine whether the USA was winning the Vietnam War. (Spoiler alert, they didn’t). He had made his name working for motor manufacturer Ford by analysing data to improve production.

The measure he developed for determining success in the Vietnam War was ‘body count’. That’s how may of the Viet Minh were killed in comparison to members of the US forces killed. A ratio of how many of ‘Them’ killed, compared to how many of ‘Us’.

The Americans killed many more, but that was not an indication of winning the war. The Viet Minh had more troops, more committed troops and the support of a large proportion of the population. The American public, didn’t care about the number of ‘Them’ killed, they cared about the “Us” figure as that was their sons.

The Americans made many policy errors on the assumption they were winning the war just because they were killing more people than they lost.

https://images.app.goo.gl/tw32Ca6GTp5QWLLJ9

https://en.wikipedia.org/wiki/McNamara_fallacy

Deaths in the Vietnam War:

“In 1995 Vietnam released its official estimate of the number of people killed during the Vietnam War: as many as 2,000,000 civilians on both sides and some 1,100,000 North Vietnamese and Viet Cong fighters. The U.S. military has estimated that between 200,000 and 250,000 South Vietnamese soldiers died. The Vietnam Veterans Memorial in Washington, D.C., lists more than 58,300 names of members of the U.S. armed forces who were killed or went missing in action. Among other countries that fought for South Vietnam, South Korea had more than 4,000 dead, Thailand about 350, Australia more than 500, and New Zealand some three dozen.” 

https://www.britannica.com/event/Vietnam-War 8/1/21

Implications of this fallacy for our businesses.

I don’t want you to think that I am obsessed by the Vietnam War, I am not, but I am fascinated about how easy it is to completely misunderstand what is going on by counting the wrong things.

Interesting reading on the problems of the ‘McNamara fallacy and its implications for recording data in this article (link at foot of quote).

“…the approach of reducing deeply human processes to a mere figure became known as the McNamara Fallacy, a term coined by the sociologist Daniel Yankelovitch. Yankelovitch described the fallacy in four points:

  1. Measure whatever can be easily measured.
  2. Disregard that which cannot be measured easily.
  3. Presume that which cannot be measured easily is not important.
  4. Presume that which cannot be measured easily does not exist.

The implications of each of the 4 steps of the fallacy are as follows:

  1. This is ok as far as it goes.
  2. This is artificial and misleading.
  3. This is blindness.
  4. This is suicide (at least as it applies to war).

In a nutshell, the McNamara fallacy is when a decision is based solely on numbers (e.g. metrics or statistics) and all qualitative factors are ignored. Doing this makes us blind to what is really going on, and it applies to many more situations that just war.”

https://expertprogrammanagement.com/2017/07/the-mcnamara-fallacy/8/1/21

McNamara couldn’t measure South Vietnamese morale, so he ignored it.

 

McNamara produced a damning, secret report on the Vietnam War which revealed that American presidents had been lying for years. The exposure of this was the subject of the 2017 film The Post.

 

 

 

 

 

 

A good summary in this video, even if he can’t pronounce McNamara properly.

 

2. Setting targets leads to manipulation.

Goodhart’s Law is essentially “When a measure becomes a target, it ceases to be a good measure.”

This is the ‘what gets measured, gets manipulated’ adage, which is almost as if we are making light of it.

However, it can lead to serious dysfunctional behaviour. Here are a few examples.

https://images.app.goo.gl/RwuhX8qoh1xYKXPdA

https://images.app.goo.gl/y4hmxFasmQ2VRfx2A

Discussion of the impact of Goodhart’s Law.

They discuss Call Centres. That’s also made it into the comics.

 

 

April 2020

I have seen plenty of examples over the years through working, but the most worrying example I have seen is the recent blatant manipulation of the Covid 19 testing statistics by the Government.

Now clearly we all realised that testing needed to increase which lead to Matt Hancock (Health Secretary) announcing that the target would be 100,000 daily tests by the end of April 2020.

It is a good thing to have a target, it gives the people doing the work a focus to plan to, but then meeting the target became more important politically than actually doing the testing and protecting people.

The last day of April lead to an announcement of 122,347 tests having been completed even though this included 40,000 that had only been put in the post!

Up until then it had been the actual tests completed. These tests will be counted twice now as they will be counted again when they are returned. Bear in mind that several thousand of the tests went out without any address to send them back to for actual testing! Many of the tests sent out won’t actually be used either.

Blatant manipulation of the measure, though it is unusual for the person setting the target to be the manipulator.

https://www.bbc.co.uk/news/health-51943612

https://www.standard.co.uk/news/uk/david-spiegelhalter-covid19-statistics-coronavirus-government-a4436471.html

https://en.wikipedia.org/wiki/Goodhart%27s_law

Discussion of the testing in the BBC statistical podcast More or Less (always worth listening to these podcasts).

Testing truth, fatality rates, obesity risk and trampolines.

Did the UK really carry out 100,000 coronavirus tests in one day?
06 May 2020, 28 minutes

https://www.bbc.co.uk/programmes/p08ccb4g

July 2020

 

A disturbing example of ‘Goodhart’s Law’. “When a measure becomes a target, it ceases to be a good measure.”

A target…

Posted by Management Accounting Info on Thursday, 16 July 2020

 

 

3. Oranges and Lemons. Measures that try to count too many things.

There’s no point having a measure that counts two different things into one total.

100 ‘oranges and lemons’ could be anything from 100 oranges and no lemons to no oranges and 100 lemons.

If you add unrelated things together you can end up hiding the information about both.

You can present information on more than one number in a measure though, you just have to be careful.

Let’s assume we wanted to show student progression rates.

You could add up all the students moving from the first year to the second, all the second years moving to the third and all the third years graduating and have one grand total of students who have progressed.

It wouldn’t give you any picture at all though about any one of the years. That’s the ‘oranges and lemons problem’. The same problem if you gave an overall percentage, it just doesn’t tell us about the three different things.

We could present it as three numbers in one measure if we are clear.

Percentage of students progressing each year: First/Second/Third =78%/82%/87%

See the note below about why we have used a percentage rather than absolute numbers.

4. Adding things together when the scales are different.

Sometimes we give a total of activities that doesn’t reflect correctly the total amount of work. Another measure might give more information.

For example I teach two modules a semester, one with 150 students on, another with 20 students. If we counted my work as the number of modules I teach = 2, then it doesn’t really reflect the work involved.

Would the number of students taught tell us more about the workload? Perhaps, perhaps not. Much of the work done is the same whether one person is taught or a thousand (preparation of materials, writing assessments, maintaining VLE sites), but other work definitely increases with the number of students (marking, dealing with queries).

Is the activity you are looking at one where just totaling doesn’t give enough information for decision making?

5. Numbers when percentages would be better. And vice versa.

We often want to show what the difference is since the last Balanced Scorecard, say a month ago.

If we use absolute numbers we often don’t know if they are good or bad.

20 people since last month.

Might be good or bad, depending upon the context.

Was it 2 people last month or 2,000 people?

If we showed it as a percentage of target it might tell us more information and enable us to see if we are going in the right direction.

6 Heads and Tails. Using two measures when one would tell us the same information.

If we said what percentage of coin tosses came down as Heads we don’t also need to state what percentage came down as Tails.

If 60% were heads, then it must be 40% that were tails.

There is no need to use up our precious twenty Balanced Scorecard measures on things that we can infer from another measure.

Percentage of staff completing compulsory training = 60%. We know what percentage haven’t.

Notice that this is one where telling me how many staff have completed compulsory training really doesn’t help. Only a percentage really tells me anything.

7. Comparing this month to last in percentage terms.

So, we might show the percentage increase since last time. If this is the only number we show, it is fine as long as things are on the same sort of scale, but….

Sales month 1 = 100, month 2 = 110, month 3 = 1,000, month 4 = 1,020.

The increase from month 1 to 2 is 10%, from 2 to 3 is 809% and from 3 to 4 is 2%.

The smallest percentage increase is actually twice as big in pounds terms to the increase from month one to two, but looks much smaller. Just quoting percentage changes without the reference value can be misleading.

Another issue arises when a constant increase looks smaller and smaller because of the way percentages work.

Look at this example where over just one year the rate of increase reduces to half of the initial rate even though the actual income is constant.

Balance £ Income £ Increase
1000 100  
1100 100 10.00%
1200 100 9.09%
1300 100 8.33%
1400 100 7.69%
1500 100 7.14%
1600 100 6.67%
1700 100 6.25%
1800 100 5.88%
1900 100 5.56%
2000 100 5.26%
2100 100 5.00%
2200 100 4.76%
2300 100 4.55%

You might decide things are going badly when perhaps they aren’t.

Another problem arises when you compare against a target expecting a constant percentage increase in results.

I have used a big target increase of 20% here to illustrate how quickly the required amounts build up over (here) just twelve months. You can see how, after just one year, you need to be making five times as many as you did in the first month.

units target increase required extra units
1,000 20%                                  200
1,200 20%                                  240
1,440 20%                                  288
1,728 20%                                  346
2,074 20%                                  415
2,488 20%                                  498
2,986 20%                                  597
3,583 20%                                  717
4,300 20%                                  860
5,160 20%                               1,032
6,192 20%                               1,238

If you were actually making 400 a month after a year, you would have doubled production but a Balanced Scorecard measure based solely on percentages might look like you were only achieving 400/1238 = 32% of your target.

If the 20% target was continued, after just five years, you would need to be making 1,820,088 units a month. Good luck.

I am sure you know the story of putting one grain of rice on the first square of a chess board and doubling it on the next square and so on. A classic example of exponential growth. One grain on the first square, then two on the second, four on the third and 18 quintillion on the 64th square.

8/1/21 https://www.forbes.com/sites/alexknapp/2011/11/17/the-seduction-of-the-exponential-curve/?sh=367053882480

We need to make sure that we consider targets sensibly and that Balanced Scorecard measures reflect sensible targets.

In our own example above, after six years, by the way we would say that we were going to produce over 16 million units a month!

“grains of rice on the chess board” by y3rdua is licensed with CC BY-NC-SA 2.0.

8. Problems with using averages.

Sometimes using an average can be useful. It is quite common in visitor attractions such as zoos and museums to monitor the average spend per visitor as a way of comparing income from retail sales over months.

You do have to make sure that the average makes sense though.

To give an extreme example, assume you wanted to work out the average weight of a person in the UK.

You could weigh everybody and divide the total weight by the number of people, but adding men, women, babies and adults all into the same calculation. Mathematically accurate but of little use. That’s probably not how teh Office for National Statistics (ONS) does it.

“The ONS said the average man in England was 5ft 9in (175.3cm) tall and weighed 13.16 stone (83.6kg). The average woman in England weighed 11 stone (70.2kg) and was 5ft 3in tall (161.6cm).”

8/1/21 https://www.bbc.co.uk/news/uk-11534042

9. Not counting properly.

I would assume that in this case it was a question of the patients not being counted rather than being deliberately left out. But…

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https://inews.co.uk/news/analysis/covid-19-hospital-patients-end-up-intensive-care-second-wave-823566

The impact is that important data is wrong. If you are making decisions absed on teh reports in your Balanced Scorecard, are you sure that the numbers are right?

Justifying your measures.

You may not need to write down for someone else what the value of a measure is, but I think you should at least go through the exercise for yourself as it will help you hone down what you really want from a measure.

What is the value of the measure? That’s really what aspect of the ‘business’ the measure is shedding a light on.

Each measure is recording something about an action that the organisation is taking. That means it will show you if you are doing enough, too little/too much of the activity; if the activity is working; if you are achieving what you thought the activity would achieve.

Each measure is under a different perspective, but it may tell you about more than one perspective. That, of course, is very helpful. 

Short introduction with an illustration from practice.

An American, so some differences in terminology, but these two videos go into the four perspectives in a bit more detail.

Notice the reference to KPIs, that is, Key performance Indicators – the things we measure to see if we are on track to meet our objectives.

 

The origins of the Balanced Scorecard as explained by Bob Kaplan himself.

 

Videos from the Balanced Scorecard Institute

Several useful videos produced by this body.

https://www.youtube.com/c/BalancedScorecardInstitute

Balanced Scorecard. Key Performance Measures.

Discussion in this podcast of the most important metrics in a real small business. The whole podcast is interesting, but the practical examples are around minute 18 onwards.

Using a Strategy Map to help you determine the measures.

Here it is principally about the important actions, but remember, you need to know what you are going to measure to see if the action is having the desired effect.

Healthy Snacks And Healthy Business Growth With Sean Kelly

Identifying appropriate measures.

Sometimes it can be quite straightforward. Here the strategy is to improve train punctuality with new targets. The measure could be the % meeting target, the number of trains not meeting punctuality target, all measured per hour, day, week etc. depending upon what is most meaningful.

https://www.itv.com/news/2019-03-22/rail-firms-face-tougher-punctuality-measures-from-next-month/

Strengths and Weaknesses of Measures

This journal article on the use of performance measures in Madeira has a useful discussion of the strengths and weaknesses of traditional and Balanced Scorecard approaches.

This extract from Men’s Health magazine from September 2019 discusses measures to use when you take up running. Notice how each measure tells you something, or more than one thing, about your performance but fails to tell you everything. this indicates that even for something as straightforward as measuring your improvement as you train in running, you would need to consider more than one Balanced Scorecard measure.

Download the PDF file .

Problems in practice with the Balanced Scorecard.

Time and time again these issues come up in research and reports on the use of the Balanced Scorecard.

  1. Too many measures. It is getting easier and easier to measure things automatically. This means organisations have access to a great deal of data. The temptation is to use it all as it all must be important. It can be important without being important enough to be on the Balanced Scorecard. Overwhelming the Board with data means poor decision making; more doesn’t always mean better.
  2. Focusing on the measure (metric) rather than what it means for the business as a whole. This can lead to measures being reported that are not actually important to the business as a whole (sometimes just because they look good!).
  3. Not producing the information in a manner that will be understood by those making the overall decisions. You can’t assume everyone is going to understand the data in the same way as the people generating it. The whole point of the Balanced Scorecard is to ensure that those making the decision shave the information they need to make the best decisions. It had better be in the way they need it, even if it does mean that the raw information has to be processed first rather than just plugged into the Balanced Scorecard.

We (me) tend to be enthusiastic about the Balanced Scorecard. This research identifies the weaknesses.

https://www.msm.nl/dba-defense-at-msm-extending-the-balance-scorecard-approach-to-performance-management/

What perspective would you put these under?

From the Annual Report of the charity Butterfly Conservation. The measures are reported as annual totals, but could have been measured monthly.

Which perspective(s) would you record them under? Some could go in more than one.

Some are very similar in the aspect of the ‘business’ that they measure, so in practice not all would be in the final version of a Balanced Scorecard.

Download the PDF file .

Not just financial

Discussion of research here which shows the Balanced Scorecard might fail as a tool if there is insufficient emphasis on Corporate Responsibility in it.

http://www.hcamag.com/hr-news/balanced-scorecard-not-so-balanced-says-study-225568.aspx

Do the wrong things get emphasised in the Balanced Scorecard?

Evaluators of Employees Tend to Favour Financial Performance Over Contributions to Corporate Ethics

A Johns Hopkins Carey Business School study finds evaluators using a Balanced Scorecard tended to award high ratings and bonuses to employees who performed well financially, rather than to those who scored well in corporate social responsibility.

Discussion of the use of the Balanced Scorecard in companies in this journal article on Human Resource management.

This is a journal article written in 1997, just a handful of years after the development of the concept and shows how companies initially used the concept in business planning.

 

 

Example of a very precise target: First-class Post Delivery

10/7/20

Balanced Scorecard and Key Performance IndicatorsSometimes it can seem that broader targets are more common than very…

Posted by Management Accounting Info on Monday, 13 July 2020

 

Balanced Scorecard and Key Performance Indicators

Sometimes it can seem that broader targets are more common than very…

Posted by Management Accounting Info on Monday, 13 July 2020

 

The Balanced Scorecard is something that can be applied to industries too and is often seen in research  as is in this example

Environmental Sustainability in Viticulture as a Balanced Scorecard Perspective of the Wine Industry: Evidence for the Portuguese Region of Alentejo

Example of a measure: Gender Balance in American Business Schools.

This is just one measure that they are reporting on, but it does show how something can be monitored. This is probably not a monthly measure though as the figures are only likely to change at induction periods/graduation periods.

Interesting how they have used a visual, although, in reality, it probably obscures the ‘picture’ rather than clarifying it.

How measures can lead to further investigation if they show an issue.

Interesting, not for the Scorecard itself, which we don’t see, but for how the data on one measure – teacher absences – leads to discussion.

That is what the Balanced Scorecard is for, to alert us to possible problems, trends etc. Are we doing what we need to do?

 

What gets measured gets manipulated.

Interesting article about examples of where target setting has lead to dysfunctional behaviour. people will do what they need to do to meet targets, not always what the company actually wants them to do.

Using the Balanced Scorecard to improve company performance.

Endorsement for the method from this company.

http://www.mediamaxnetwork.co.ke/business/279526/new-four-year-strategy-drive-britam-revenues/

Constructing a Balanced Scorecard.

The organisation behind the Balanced Scorecard has a favoured approach for developing a BS in an organisation.

http://www.managementaccounting.info/constructing-a-balanc…/

An example of a format,

…although I don’t think the objectives and initiatives (actions) should be listed on the front sheet. Much better to give the space to targets/measures.

https://www.visual-paradigm.com/features/balanced-scorecard-tool/

Watch this

From the Balanced Scorecard Institute (consultants) on linking company objectives and measurements. Includes a practical example of choosing the best measures.

How you can construct a Balanced Scorecard Dashboard (visual representation of the BS) in Excel.

Proposal for its use in a service industry to reward employees.

Concern over commissions for mortgage brokers in Australia is leading to proposal of change. Instead of paying commissions (based on value of mortgages/sales), reward will in part be based on a Balanced Scorecard.

https://www.canstar.com.au/home-loans/home-loan-interests-rates-go-mortgage-broker-commissions-axed/

Further Reading

10,000 steps.

https://inews.co.uk/news/health/walking-10000-steps-improve-bone-strength/

Missed Targets – examples of Balanced Scorecard Measures.

We often hear of Balanced Scorecard measures when ‘targets are missed’ as here with patients waiting in ambulances.

http://www.dailymail.co.uk/wires/pa/article-5339307/Increase-patients-having-wait-ambulances-A-E.html

An example of a simple measure that gained prominence when a scandal hit an organisation.

Oxfam normally has 600 direct debit cancellations a month. Following a ‘sex scandal’ the cancellations rose hugely. Clearly they are monitoring cancellations as a BS measure.

http://www.bbc.co.uk/news/business-43057238

Discussion of the importance of the Customer Perspective for charities.

Measuring satisfaction: why charities ignore the customer at their peril

Using The Balanced Scorecard when changing an organisation’s strategy.

 

Balanced Scorecard.

Discussion of how the Balanced Scorecard can be used as part of developing a new strategy. About…

Posted by Management Accounting Info on Friday, 7 August 2020

 

An example of an Internal Business Perspective Scorecard.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/602140/DBS_Service_Standards_Feb_17.pdf

Download the PDF file .

Linking measures to objectives.

The measures (KPIs) need to be closely linked to your objectives. Failure to do this is a common mistake.

https://balancedscorecard.org/Resources/Blog/ArtMID/2701/ArticleID/1042/Broken-Linkages-Are-you-SURE-you-are-Executing-Strategy

What’s measured gets managed …… and the problems that can cause

Police control phoning 999

Here is a recent example of how setting targets/performance measures can adversley effect actual performance. By penalising performance below a certain level, an organisation can encourage dysfunctional behaviour. A police control room phoning 999 to improve their own response rate!

https://www.theguardian.com/uk-news/2016/may/23/g4s-police-control-room-staff-suspended-claims-bogus-999-calls-lincolnshire-force

Airlines deliberately leaving luggage behind….

Another example of how setting targets can lead to dysfunctional behaviour. To avoid fines for late departures airlines deliberately leave luggage behind! It is cheaper to compensate a few for the delayed arrival of luggage than all the passengers for the flight delay.

http://www.independent.co.uk/travel/news-and-advice/airline-passenger-rights-eu261-compensation-flight-delay-a7037616.html

See how Key performance Indicators (Balanced Scorecard measures) are considered by these online marketers. Discussion around minute 37. Note the proxy measure (one that tells you mkore than one thing).

http://eventualmillionaire.com/matthewpaulson2/?inf_contact_key=66f42a604a5f12b9580c5fbbfe45af45367eb57d2b653139f300f244846b8d40

Organisations (here the UK Government) can use a Balanced Scorecard to evaluate possible suppliers.

http://www.agg-net.com/news/cpa-introduces-new-procurement-tool

Examples of very specific measures.

Lists some of the measures used in a hospital. These are clearly ones that are specific to the nature of this hospital.

http://thecourier.com/breaking-news/2018/03/08/blanchard-valley-receives-top-100-hospital-award/

An example of a detailed Balanced Scorecard for an organisation.

Download the PDF file .

When might a Balanced Scorecard not be appropriate?

This article argues against the use of a specific Balanced Scorecard in Financial Services. I am not sure the use of inappropriate measures (here some that ware manipulated) means that the Balanced Scorecard shouldn’t be used. Surely it just means more effort required in determining the measures?

http://theconversation.com/how-not-to-police-financial-services-balanced-scorecards-dont-work-for-bankers-120899

How the Government is using the Balanced Scorecard in making purchasing decisions.

“The guidance, developed by the Crown Commercial Service, introduces a balanced scorecard approach, which government departments should use in designing major works, infrastructure and capital investment procurements where the value is more than £10 million.”

https://www.gov.uk/government/news/launch-of-the-procuring-for-growth-balanced-scorecard

On the Folly of Rewarding A, While Hoping for B.

A classic business paper by Steven Kerr, originally from 1975 on how setting targets usually leads to encouraging the opposite, unwanted, behaviour.

Download the PDF file .

 

An explanation of how the Balanced Scorecard can be used in developing the marketing and branding of an organisation.

They use slightly different terminology (e.g. KPI for measures), but note the emphasis on measuring things that are already happening to see if things are moving in the right direction and how measures/KPIs can tell you about more than one area of activity.

How a Balanced Scorecard is being used to overcome dysfunctional targets.

I have worked in organisations where rewards were based on sales. Not surprisingly, other people sold products not necessarily in the best interests of our customers. These concerns have lead to a Balanced Scorecard being introduced in these banks with greater emphasis on other measures.

https://www.stuff.co.nz/business/industries/103541588/kiwi-banks-made-changes-to-staff-sales-incentives-after-australian-revelations

How a consultancy helps non-profits with the Balanced Scorecard.

See how in their advert they describe how a Balanced Scorecard wil help.

http://www.gcn.org/Nonprofit-Consulting-Group/BalancedScorecard

Video lecture on Balanced Scorecards that emphasises the strategic role of the Balanced Scorecard.

https://pt.coursera.org/learn/business-intelligence-tools/lecture/tovKt/balanced-scorecards-versus-six-sigma-video-lecture

Balanced Scorecard for evaluating performance.

An example of using the Balanced Scorecard to judge organisations. Here an award granting body uses performance against an external Balanced Scorecard to judge caterers.

http://eatoutmagazine.co.uk/soil-association-partners-carbon-trust-new-industry-standard

An example of just the Internal Business Perspective given as a Balanced Scorecard.

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Journal article outlining how the Balanced Scorecard could be used in an unusual  context.

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Examples of Balanced Scorecards.

There are plenty of organisations that have adapted the Balanced Scorecard, here is an example. Interesting to read there analysis of the original BS and their explanation on why their variant is an improvement. Things can always be improved of course.

Their website: http://www.rolandberger.be/publications/local/2015-07-21-ecosystem_based_balanced_scorecard.html

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Use of a Balanced Scorecard within a Department.

It doesn’t just have to be the company’s Balanced Scorecard as a whole, as long as they are in line with a company’s objectives, areas of the business can have their own.

http://www.insidearm.com/opinion/top-3-metrics-that-must-be-on-your-talent-acquisition-scorecard/

Further Reading

Balanced Scorecard – Learning and Growth Measures
 
L&G is about the knowledge and expertise of the organisation and its employees.
 
Here is an example of something that could have been a Balanced Scorecard measure – recruitment/training of pilots to a certain standard. A measure indicating that required levels are not being achieved.
 

An interesting example of how a school in America has used the Balanced Scorecard. Look at the issues that are important to them.

http://mdjonline.com/view/full_story/26952737/article-Board-of-Education-reviews-school-s–balanced-scoreboard-?instance=home_top_bullets

How Many Types of KPIs Are There?

Using the standard Kaplan and Norton model we would say twenty; five each a cross four perspectives. An article that considers different approaches to KPIs.

http://www.information-management.com/blogs/bi-data-discovery/how-many-types-of-kpis-are-there-10027475-1.html

Manipulation of University data in the Balanced Scorecard going to happen?

‘What gets measured, gets managed’ is what we are told is one of the justifications for Balanced Scorecard measures. It’s also said that what gets measured, gets manipulated’. This is particularly the case when the consequences of meeting certain levels are significant.

You may be aware that there is discussion of universities that teach well (as measured under the Teaching Excellence Framework, will get to charge higher fees.

There is concern that there will eb manipulation of data as the rewards of high performance are so significant (being able to charge higher fees).

https://www.timeshighereducation.com/news/naive-tef-metrics-could-undermine-widening-participation-v-c-warns

Possible Written Questions.

(No indication of marks – the more marks a question gets, the more you are expected to write – detail that is, not just words!) If you can’t answer these, you need to do some more reading. I do ‘find’ questions elsewhere, so these aren’t all questions I have used myself.

Discuss the rationale behind the development of the Balanced Scorecard and how it is used to overcome some of the problems associated with traditional performance measurement.

Describe Kaplan and Norton’s Balanced Scorecard approach to performance measurement.

With regard to the Balanced Scorecard framework, highlight possible objectives which could be utilised in measuring the performance of a university.

What are the weaknesses in using a Balanced Scorecard approach?

Discuss the use of  Kaplan & Norton’s Balanced Scorecard approach to performance measurement and how it could benefit an organisation to adopt a Balanced Scorecard.                                              

Outline the weaknesses of using a Balanced Scorecard to monitor a business’s performance.

Briefly explain the main principles of the Balanced Scorecard and the four perspectives.

List and explain the areas of a business covered by the four perspectives of the Balanced Scorecard.

Dr. R. Kaplan and Dr. D. Norton celebrated 20 years of The Balanced Scorecard in 2012.  Has this strategic performance management review tool remained relevant in 2013 and has it a place in modern business. (Obviously, the time period is now different, look out for 30 year anniversary questions).

Research papers.

Journal articles etc. related to this topic.

Here’s the original idea..

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Download the PDF file .

Download the PDF file .

Download the PDF file .

Download the PDF file .

Discussion of the use of a Balanced Scorecard in evaluating a transport system

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Download the PDF file .