Balanced Scorecard FAQs

Everything you need to know about Balanced Scorecard.

FAQs

Balanced Scorecard is simple in principle, but practical design and implementation require a good deal of art, craft and science.

To help others navigate the minefield, 2GC analysed questions submitted to various online discussion forums over the past few years. Here are our concise answers to the most common FAQs about Balanced Scorecard, Strategic Implementation/Control and Performance Management.

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What is a Balanced Scorecard?

The Balanced Scorecard approach to performance measurement combines traditional financial measures with non-financial measures. This provides managers with more relevant information about the activities they are managing, increasing the likelihood of organisational objectives being achieved. In this FAQ, 2GC provides an overview of the Balanced Scorecard and describes how it is designed, implemented and used.

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What are the main benefits of a Balanced Scorecard?

The potential benefits of a Balanced Scorecard depend on its application and implementation. There are two distinct uses: Management Control and Strategic Control. Although similar visually, these two applications of Balanced Scorecard require substantially different design and development processes, and provide different benefits to a management team which we summarise in this FAQ.

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What is ‘state-of-the-art’ Balanced Scorecard design?

Balanced Scorecard has developed from a tool for organising measures to a strategic management mechanism. It has evolved in terms of design characteristics, processes and usage patterns into what is now referred to as 3rd Generation Balanced Scorecard. In this FAQ, we outline the evolution and highlight the characteristics of best practice Balanced Scorecards.

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How do I successfully implement Balanced Scorecard?

The practical value of a Balanced Scorecard can only be realised if it is implemented successfully. In this updated FAQ, we discuss four things to consider when you are planning the design of a Balanced Scorecard, each of which if done well will improve the chances that your Balanced Scorecard will deliver its full potential.

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How do I create a strategic Balanced Scorecard?

In developing a Balanced Scorecard the biggest challenge is deciding the most relevant measures to include - particularly for Scorecards to be used for strategic management purposes. In this FAQ, 2GC outlines the eight steps your Strategic Balanced Scorecard design and implementation process should follow, and explores how best to deliver these steps.

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