THE PROMISE AND PERILS OF THE BALANCED SCORECARD

The balanced scorecard, the methodology developed by Drs. Robert S. Kaplan and David Norton, recognises the shortcomings of executive managements' excessive emphasis on after the fact, short-term financial results. It is one of the underpinnings needed to complete the full vision of the performance management framework. This chapter explores why there are so many people familiar with the term balanced scorecard but so few are familiar with the term strategy maps. The peril that threatens the success of this methodology is executive teams that are anxious to assign measures with targets to employees and hold them accountable. There are two key distinctions of scorecards: Each key performance indicators (KPI) must require a pre-defined target measure, and KPIs should comprise both project-based KPIs and process-based KPIs. The balanced scorecard and dashboard components of commercial enterprise practice management (EPM) software should have some, but not many, pre-defined KPIs.