The Balanced Scorecard: Snapshot of a Business “Classic”

BalancedScorecardOpinions vary as to what defines a “classic” business book. My own opinion is that it offers insights and counsel that are of timeless value. To paraphrase Bernard of Chartres, a 12th century monk, their authors are the shoulders upon which each new generation of leaders stands. For example:

The Balanced Scorecard: Translating Strategy into Action
Robert S. Kaplan and David P. Norton
Harvard Business Review Press (1996)

Imagine trying to drive a vehicle in rush hour traffic while wearing a blindfold. That’s how many business leaders felt more than 25 years ago…and how many also feel today.

Kaplan (then a professor at Harvard Business School) and Norton (then CEO of Renaissance Solutions) recognized an urgent need for more reliable financial performance measurement. They devised the Balanced Scorecard (BSC), a tool that serves as “the central organizing framework for important managerial processes” including individual and team goal setting, compensation, resource allocation, budgeting and planning, and strategic feedback and learning.

“Organizations are competing in complex environments to achieve their financial objectives,” write Kaplan and Norton. That requires “an accurate understanding of their goals and the methods for attaining these goals.”

It was true then. It’s true now.

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