The Balanced Scorecard was introduced by Harvard Business School professor Robert Kaplan and management consultant David Norton in a 1992 Harvard Business Review article. It quickly became one of the most well-known approaches to performance management in the private sector. It was developed out of a concern that companies were placing too much emphasis on short-term financial indicators, without enough attention to longer-term drivers of organizational success. As a result, the Balanced Scorecard tracks indicators in four categories: 1) financial; 2) customer (or stakeholder) satisfaction; 3) internal processes; and 4) learning and growth.
Since then, many government agencies have adopted the balanced scorecard as well. To learn more, we’re joined by a leading expert, Kenneth Thompson, a professor of management at the Kellstadt Graduate School of Business at DePaul University. He is the co-author, with Nicholas Mathys, of an IBM Center for the Business of Government report focused on applying the Balanced Scorecard to government agencies. As the authors explain, the Balanced Scorecard is a tool “for translating an organization’s strategy into action through the development of performance objectives and measures in order to fulfill its mission.”
Web extras: Kenneth Thompson discusses the four traditional components of the Balanced Scorecard, plus he adds a suggested additional fifth component. [click here] Also, he provides the example of Motorola to explain the motivation behind the Balanced Scorecard. [click here]