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Why Consider the Balanced Scorecard?

Posted March 4, 2008 3:22 PM by Ted Jackson

The Balanced Scorecard is a management tool that's becoming very popular in the non-profit and government markets. Why? Because the Balanced Scorecard allows mission-driven organizaions to clearly state their strategy and gives them a measurement framework that shows if they are acheiving their strategy.

Bob Kaplan, in an article he wrote for the Balanced Scorecard Report noted that:

By adopting strategic performance measures, nonprofits can bring focus and discipline to their mission and much-needed information to donors and supporting organizations. The result: a more efficient marketplace that rewards effectiveness, thereby bringing bigger benefits to society. And in the post-Enron era, the stewardship and accountability that the Balanced Scorecard can help nonprofits achieve is just as relevant to the private sector as it is to the public sector.

I would argue, actually, that the Balanced Scorecard is even more important to non-profit organizations than it is to corporations. The number of constituencies that non-profits must work with on a daily basis is typically higher, the push for results (with no overhead!) is intense, and the requirements for transparency and accountability are ever increasing.

How does the Balanced Scorecard address these issues? First, by using the Strategy Map, an organization can place its strategy one page (as opposed to one binder). Second, the Balanced Scorecard integrates the measurement and management systems so that measures are driving appropriate behavior. Finally, the Balanced Scorecard integrates project management with strategy management (as projects are how strategies get accomplished).

This secret to the success of the Balanced Scorecard in non-profits (and corporations, for that matter) is this relatively simple process. If you'd like to learn more about how Ascendant helps organizations execute strategy with the Balanced Scorecard, please do not hesitate to contact us. Or, if you agree or disagree, please comment below.

Filed Under Balanced Scorecard