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Happy 20th Birthday Balanced Scorecard

Posted June 25, 2012 9:17 AM by Dylan Miyake

Twenty years ago, in 1992, Harvard Business Review published "Balanced Scorecard -- the Measures That Drive Performance." Seemingly obvious now, the article argued that companies need to measure more than just financial and operational measures to succeed. By looking at a "balanced scorecard" of financial, customer, process, and people measures, organization could more accurately understand the drivers of performance.

It's hard to overestimate the contribution of the Balanced Scorecard concept to modern management theory. Like the balance sheet and P&L statement, it's become more than just "another good idea" and become part of the way that all organizations operate -- whether or not they call it a "Balanced Scorecard," every organization now understands that they need to look beyond lagging financial indicators to succeed.

At 20, the Balanced Scorecard movement is as strong as it ever was, having easily surpassed ideas like reengineering, customer value mapping, value innovation, etc., etc., etc. The Balanced Scorecard is consistently listed on the Bain survey of management tools, and consulting organizations throughout the world have practices dedicated to the Balanced Scorecard.

The reason for this success is twofold: One, Drs. Kaplan and Norton have continued to advance the theory of the Balanced Scorecard, and have integrated ideas such as strategy maps, linkage to personal evaluations, linkage to budgeting, and a framework for communication. But equally important to the Balanced Scorecard movement is the fact that there is a global community dedicated to advancing the state of the art and sharing those ideas broadly.

I personally have been extremely fortunate to work in the Balanced Scorecard space (and with Drs. Kaplan and Norton) for the past 15 years, and I'm looking forward to the next 15 years. The past five years working in the mission-driven space have been especially rewarding, as the team here at Ascendant has been working on "high leverage" projects -- where if we can help a school district improve its management, we can help 1,000s of kids improve their educational outcomes. Or if we help the World Bank improve their management, by extension we help 1,000,000s of people escape poverty.

It's been a great ride, and I'm incredibly thankful to Drs. Kaplan and Norton for giving me the opportunity to participate, my partners at Ascendant for building a firm that's helping to change the world, and the global Balanced Scorecard for continuing to advance the theory and practice of the Balanced Scorecard.

Happy Birthday Balanced Scorecard!