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The Balanced Scorecard and its development
The Balanced Scorecard was first introduced in the early 1990s through the work of Robert Kaplan and David Norton of the Harvard Business School. ...
By combining financial measures and non-financial measures in a single report, the Balanced Scorecard aims to provide managers with richer and more relevant information about activities they are managing than is provided by financial measures alone. Kaplan and Norton proposed that the number of measures on a Balanced Scorecard should also be constrained in number, and clustered into four groups. Beyond this, the original definition of Balanced Scorecards was sparse.
In essence the Balanced Scorecard has remained unchanged since these early papers, having at its core a limited number of measures clustered into groups, and an underlying strategic focus. But modem Balanced Scorecard designs also have a number of features that clearly differentiate them from earlier examples. This paper describes these changes as an evolution through three distinct generations of Balanced Scorecard design.
First generation Balanced Scorecard
The Balanced Scorecard was initially described as a simple "4 box" approach to performance measurement. ...
Definition of what comprised a Balanced Scorecard was sparse, and focused on the high level structure of the device. ...
Kaplan and Nortons original work makes no specific observations concerning how the Balanced Scorecard might improve the performance of organisations; the implication is that the provision of accessible relevant measurement data itself will trigger improved organisational performance. However, they do imply that the source of these improvements is changes in behaviour: In the light of this, the basis for selecting the goals represented by the Balanced Scorecard is of some importance. But in their first paper Kaplan and Norton say little about how a Balanced Scorecard could be developed in practice beyond a general assertion that design involved "putting vision and strategy at the centre of the measurement system". Later writing includes increasing amounts of proscription about development methods, concluding with a lengthy description of one such process in their first book on the subject published in 1996
Practical Experiences with first generation Balanced Scorecards
The authors professional experience suggests that First Generation Balanced Scorecards are still being developed, and that they probably still form the large majority of Balanced Scorecard designs introduced into organisations.
Approximate Word count = 1866
Approximate Pages = 7.5
(250 words per page double spaced)
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