Founding fathers of the Balanced Scorecard offer insight into how it can be used to maximize opportunities

Wednesday, 15 February 2012 10:53
The Execution PremiumIn their fifth and most recent book, "The Execution Premium" Kaplan and Norton, founding fathers of the Balanced Scorecard (BSC), show how this instrument has now become the number one management system for helping organizations execute their strategies. Furthermore, they offer five guidelines for the future:
  1. Collaborate with external constituents, such as key suppliers, customers and alliance partners, to develop a strategy map that describes and communicates the strategic relationship; once developed, the map and scorecard are used to govern and guide the relationship. Companies or public-sector enterprises that operate in networked organizations can develop a holistic strategy map to describe the collective and shared value-creation process they are engaged in.
  2. As citizens around the world demand more transparency, accountability and performance from their governments, the benefits of using the BSC to focus and align public-sector entities will become even more compelling in the years ahead.
  3. Use the strategy map as a jumping-off point for risk management, especially the identification and management of strategic risks. For each strategic objective on their map, company managers should identify the risk events that could lead to failure to achieve the targeted performance, quantify the likelihood and consequence from each identified risk event and develop key risk indicators.
  4. Use the strategy map as a central change management tool. Some of the most successful BSC implementations have happened as new chief executives and agency leaders have attempted to transform the performance of the enterprises they now head. 
  5. Expand the role for analytics in the strategy execution system. Use BSC data to distinguish when disappointing performance is caused by poor execution of a good strategy, as opposed to when it has been caused by very good execution of a poor strategy.

Since Bizzscore supports all five points mentioned here, we fully agree with Kaplan and Norton!