The full title of this book by Robert Kaplan and David Norton is
The Balanced Scorecard: Translating Strategy into Action
In my review posted on Amazon.co.uk, I gave it Three Stars.
Here is my review.
Sensible idea backed by brilliant marketing.
Back in the early 1990s I was thinking a lot about performance measurement in a manufacturing business and I wanted to reflect more non-financial factors that provided a more balanced view and cascaded our main business objectives down the organisation.
When I read the book I found that the authors shared many of the same ideas as I did. This was no surprise when much of it is common sense when you take the time and trouble to think about it. The problem at that time was few people were really thinking beyond financial measures and a few productivity based volume metrics.
What they did, that I didn’t, was 1) come up with a catchy name and 2) swing a brilliant marketing campaign behind it.
The strength is that when this is explained, it all seems so logical. Of course you need to link KPI to your strategic objectives with a good balance of leading measures that predict future performance with the all important, but lagging, financial numbers.
The weakness is that it’s much harder to do in practice. There’s a cost involved in measuring and reporting anything and the value of monitoring has to come from corrective and supporting actions.
The balanced scorecard has gone on to be extremely popular with big companies and the logic of a balanced set of performance metrics needs to be rippled down into the independently owned SMEs. While this book began it all, there are better books that update the ideas and give you a clearer idea of how to implement eg Paul Niven’s book “Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results“.
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