Why Balanced Scorecard doesn't work*

*...for some organisations.

In his excellent blog "the unfulfilled Promise of the Balanced Scorecard" well-known performance management expert Gary Cokins suggests some of the reasons why Balanced Scorecard has failed to live up to the promise.

In my view, there are two key problems:

Number One: Consultants. Particularly the big firms, who grabbed the new Balanced Scorecard (BSC) methodology when it was first published in 1991 by Professor Robert Kaplan & David Norton, and sought to implement it the way they implement most new, technology-based tools, by selling it in to large firms at C-level, but implementing it using a busload of freshly minted MBAs working at mid-management to grass-roots level. BSC has always been about creating a top-down strategic model, and you can't ever start to make the bottom-up changes happen until the first full top-down pass has been fully completed. Which means the project must be led by a very experienced, C-level facilitator-consultant.

Two, and this is especially true where the methodology is implemented internally, the quality of the strategic thinking often goes unchallenged and untested. Garbage In, Garbage Out may be cruel and unkind, but even if the garbage is reasonably good garbage, it's still nowhere near good enough. You need independent facilitation to challenge the thinking.

In summary: The firms that have made BSC work for them have used senior-level, independent facilitation with close involvement all the way from the top level of the organisation. If you are planning to implement BSC any other way, please save yourself the time and trouble and scrap the project before you start.

More on Balanced Scorecard, including second and third-generation versions, coming soon.