A recent report co-produced by INSEAD and the UK-based Chartered Institute of Management Accountants (CIMA) details the most recent developments in Balanced Scorecard (BSC) applications, particularly in the key role of strategy mapping. Due to its widening use and constantly changing operating conditions, the BSC has developed considerably since its introduction. The report focuses on how less tangible company assets, (i.e., personnel, systems, processes and innovative abilities) can be integrated into the BSC.
The report gives detailed consideration to Kaplan and Norton's five guiding principles. It also ponders both alternative and complimentary approaches involving strategy mapping with intangible assets as a primary feature, and support for the guiding principles using the "Business Modelling Approach".
It goes on to evaluate the versatility of the scorecard framework and its adaptability according to the needs of a given organisation, including NGOs and non-profit bodies. INSEAD Research Associate Francesco Zingales provides information on the value of the BSC as a strategic management framework, specifically as a vehicle for re-orienting strategic thinking and integrating environmental and social issues into strategy and scorecard design.
Zingales briefly discusses the research conducted together with INSEAD Professor Luk Van Wassenhove in partnership with three leading French and Italian corporations, and the four reasons the INSEAD researchers came to conclude that the scorecard approach might be an appropriate integration tool.
The report mentions research done at Cranfield University involving more than 80 companies attempting to choose the best performance measurement software for their purposes. It also reflects upon certain criticisms the scorecard approach has attracted, and the various reasons why BSCs have sometimes failed.
Two case studies are presented. The first, based on the world's second largest defence contractor BAE systems, examines the application of the BSC approach as part of the firm's ongoing culture change programme, and the steps in support of this that originated.
The second concerns developing and applying a scorecard for the public sector Health Action Zones, recently established in Britain as partnerships between the government-headed National Health Service and various local authority, voluntary, and business agencies. With so many different actors from both the private and public sector coalescing in ways unfamiliar to all, the board of governors and functional heads of the HAZ formed an executive team and, using scorecard principles, decided strategies and priorities which then cascaded down through the organisation.
The report offers valuable insight into the BSCs practicality for both private and public sector bodies in this instance. Project teams were formed for specific tasks, which had been designed so that those individuals best placed to ensure delivery of specific targets were both capable of, and motivated towards doing so.