In the Bridgespan Summer 2008 Knowledge Letter, released today, Kirk Kramer, a partner at Bridgespan, talked about a recent report from Bridgespan and Bain on how effective organization achieve superior results. In this research, Bridgespan compares assessment results of 30 nonprofits against Bain's database of over 500 for profits.

The study is interesting and shows lots of detailed information, but I was intrigued by one key area. Kramer presented a slide talking about leadership in nonprofits. He showed that the study group excelled at having a vision, but struggled in two areas. The first was setting, translating, and resourcing of priorities, and the second was communicating the priorities.

The Balanced Scorecard was designed expressly for this purpose, to help translate the strategy into a format that the entire organization can understand. Not only does the strategy map within a balanced scorecard depict the strategy on one page, but it also allows an organization to align initiatives or key programs to the strategy. Advanced BSC users align their budgeting process to the themes within the strategy map to further support the resourcing of priorities.

Further, our experience has shown that organizations who implement the Balanced Scorecard immediately report on the benefits of being able to clearly communicate the strategy and strategic priorities. Kramer's study also shows the need for alignment across nonprofit organizations. Specifically, it shows that nonprofits struggle to coordinate across organizational boundaries. Norton and Kaplan's book called Alignment specifically addresses this issues. It is nice to see that this Bridgespan study highlights the need for a Balanced Scorecard within the nonprofit sector.