The Balanced Scorecard (BSC) was created by Drs Robert Kaplan and David Norton of the Harvard Business School as performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to provide leaders more ‘balanced’ view of organisational performance. The Balanced Scorecard is strategic planning and management system (not just measurement system) that helps organisations translate strategy into operational themes that then drive behaviour and ultimately greater performance.
The adoption of the BSC has often been criticised as being too cumbersome and not appropriate for smaller sized entities such as we have in New Zealand. The economic turmoil of the last few years has reminded leaders that greater organisational performance is required. However, this performance is more than just bottom line financial tracking, rather, more mature and balanced consideration of other elements important to today’s need for more dynamic organisation.
It’s now time to re-consider the BSC but in more flexible manner that has less objectives, targets and measures to give ‘lite’ version. From change management perspective ‘lite’ version is more likely to be successful via stakeholder buy-in and therefore sustainability, leading to greater and longer lasting organisational performance.
The close compatibility between BSC and portfolio management lends itself well to organisations that are seeking more mature contributions from their existing programme or portfolio management offices. These can provide valued contribution by working closely with finance, those involved in strategy planning and others as required to provide central collation and analysis service to the entire organisation. Ownership of the BSC can also be within the project management officer but only if the leadership and staff have the maturity, capability and vision that are required to operate effectively at portfolio level or programme level.
The BSC takes four perspectives or themes and breaks those down, in much the same way as work breakdown structure does of scope, to determine objectives, measures and targets. From those comes series of initiatives (projects) that together provide the linkages and thereby breaks down the barriers. The organisational objectives can be viewed as programmes of work, the measures and targets as benefits and the initiatives as projects. Overall BSC can be seen as single organisational portfolio of work or perhaps group of portfolios – portfolio for each strategic theme. M
• The Balanced Scorecard is part of Project Plus’ selection of reporting solutions for New Zealand businesses.
Forming partnerships with Māori business
Guest Contributor
November 18, 2024
Broadcaster and journalist Mike McRoberts (Ngāti Kahungunu) will be speaking to directors and the business community at an Institute of Directors’ event Te Ōhanga Māori: Connecting with the Māori economy.
