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Thursday, March 22, 2007

Balanced Scorecard as the Next Big Thing?

Many corporate managers have been introduced to a corporate management system called the Balanced Scorecard. Developed at the Harvard Business School by David Norton and Robert Kaplan in the early 1990s, the Balanced Scorecard (BSC) represents the newest and most prolific performance measurement system since Total Quality Management (TQM) and Management by Objectives (MBO).

A growing number of organizations are achieving great financial success through the BSC framework, thereby solidifying the BSC a "here to stay" rather than just another passing fad.

According to studies, the BSC is being implemented in nearly two-thirds of North American corporations. Indicative of the system's growth, many of these implementations are less than six months old.

Thus, as a manager or business leader, if the system has not yet been encountered, it most likely will be in the near future.

According to the Balanced Scorecard Collaborative ( almost 75% of companies implementing a BSC will also implement a software solution to automate the process.

BOTTOMLINE: While balanced scorecards are an effective way to get alignment, by themselves are not enough. The solution needs to address the barriers of economic, expertise and human factors. Software is just one element - it helps to encourage new habits. Your organization also needs to adopt a systematic business-building methodology - one that is based on prove best-practices. And, we also need coaching/encouragement to continue to make the new change initiative "stick" - just like fitness or dieting, it's hard to do it by ourselves. Balanced scorecards are useful - and not surprisingly, they're built right into the Six Disciplines system.

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