Measure and Improve with HBR’s Balanced Scorecard
Building on the early work of Art Schneiderman, Robert Kaplan and David Norton developed a tool for strategic management that they called the Balanced Scorecard in a 1992 Harvard Business Review article. Their approach represents a fundamental change in performance management. Prior approaches to measuring success in a company arose from financial departments. These managers had what Kaplan called a “control bias” – they focused on specifying desired behaviors and measuring to see if those behaviors were happening. That’s all very well and good for an industrial age company driven by an engineering mentality. But a more modern company seeks to pursue a more dynamic vision. Rather than focus on measuring adherence to a predefined procedure, a balanced scorecard allows managers to establish broad goals and measure progress towards those goals no matter how it is achieved. This approach allows a more flexible approach to success based on continuous improvement rather than adherence to existing procedure. The HBR balanced scorecard combines financial with operational measures to give a more clear picture of flexible progress towards a goal in a typically dynamic contemporary business environment.