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Balanced Scorecard

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Bob Kaplan and David Norton established the Balanced Scorecard in the mid 1990s using their companies to build case studies and develop a series of books that explain aspects of the methodology, now consulting and continuing the research into strategy methodology using Palladium.  Robert Twiddy worked for Renaissance Solutions with the Balanced Scorecard team and was one of the contributors to the early Balanced Scorecard and IT Scorecard.

If you look at McKinseys 7-S Framework model Kaplan/Norton have created nearly all the elements that are required to build an holistic strategy management system. Structure: “Office of Strategy Management”, Systems:  “Balanced Scorecard, Strategy Maps,” Style: “SMS”,  Shared Values: “Alignment” Strategy “Intangible assets, Human, Information and Cultural Capital”, Staff: “Certification of methodology professionals”.  They have also provided tools and the recommendation of tools to monitor the strategy process.  For me linking Strategy into action by identifying the key initiatives and working them as programmes and projects is key to implementing the strategy.  Having a Strategic Feedback System from the top to the bottom of the organisation both ways closes the loop for all strategy objectives to meet the challenges set.

Kaplan/Norton have created the only published holistic approach to establishing, maintaining and renewing strategy for an organisation.   It encourages cascading aligned to the organisation’s structure and it encourages a feedback loop process to ensure that the strategy by the leadership is connected to the strategy in every operational area including with 3rd parties and the end customer. Moreover you can integrate and use other methodologies to build or monitor the causal effect perspectives that are key to an organisation.

In creating their case studies they have also enlisted a “hall of fame” approach to those companies who carry out a good strategy process and have succeeded in producing good strategy.

The balanced scorecard is a proven methodology both in the business world and public entities. Over 1200 case studies, including senior executive quotations, all achieving outstanding results. The disciplines of balanced scorecard have evolved over the past 15 years: we can learn from the lessons of others. Balanced Scorecard has been used by good companies to become great; it is a discipline they see as essential. Balanced Scorecards integrates well with other best practices such as ABC accounting, HR regulatory compliance and common functional business tools. Because it’s a discipline as well as a tool, Balanced Scorecard can improve capability internally and 3rd party contracts to become strategic, rather than just operational. Once you have Balanced scorecard capability internally, you can confidently offer strategy advice/consultancy to your suppliers – climbing the food chain right to the top.

Office of Strategy Management provides a process for carrying out the strategy process using the methodologies, maps, tools around the Balanced scorecard in a closed loop environment.

All the books that have been created by Kaplan/Norton link each element that is necessary to create good strategy.

For more:  Palladium

                        Balanced Scorecard Institute