The Balanced Scorecard has been used for a long time in North America and Europe. From your observations how popular is it in other parts of the world?

Naresh Makhijani, Managing Director, OTI Indonesia

According to a 2005 survey of 960 organizations by the US-headquartered consultancy Bain & Company, fully 64% of North American and 62% of European companies deploy a Balanced Scorecard. Latin American usage closely follows at 58% and the concept is fast growing in Asia, now at 43%.

So as we can see, there are still more companies in North America and Europe using the Balanced Scorecard than elsewhere. This is not surprising, as the scorecard has been a key management tool in the west since the early 1990s. And the finding that it is still so popular in North America and Europe speaks volumes about the efficacy of the approach – if the scorecard was no more that a passing fad (as many still claim) it would have long since been consigned to that corporate ‘ideas dustbin’ that is overflowing with decades worth of  ‘great management solutions’.

But it is heartwarming to see that other parts of the world are fast catching up  with the west as scorecard users. From Latin America, for example, there is an emerging cadre of best practice case studies that provide insightful learnings for other scorecard adopters. These learnings are equally applicable to other Latin American companies and organizations in other parts of the world.  Consider the Mexican movie-theatre chain Cinepolis, a 2005 inductee into the Balanced Scorecard Collaborative (BSCol) Hall of Fame. In the two years since launching the scorecard in 2002 Cinepolis saw EBIDTA (earnings before interest, depreciation, taxes and amortization) rise 48% and box-office revenues significantly outstrip the competition. And another 2005 Hall of Fame inductee, the Brazil-based Polibrasis Resinas saw net income after tax rise 126% after just one year of scorecard usage.

Also from Asia there is a growing band of showcase scorecard performers. For instance the India-based Tata Motors Commercial Vehicles Business Unit witnessed a revenue growth of 40% in its first two years of scorecard usage. And it also substantially contributed to its parent company, Tata Motors Corporation, turning a US $108.62 million loss into a US $65.17 million profit in the same two years. Other exemplary Asian companies that I have studied include Korea’s E-Land, Hong Kong’s MTR Corporation, Subordinate Courts, Singapore, and Thai Carbon Black, among others.

Therefore, as a community we are truly able to now draw from a rich database of Balanced Scorecard best practices from diverse industries and sectors, and from across the globe.

What is also interesting is that being on the whole, newer to the scorecard concept, the non-western companies are implementing the scorecard with the benefit of much learning already available. They are also able to launch their scorecard efforts with a goal to become a full-fledged Strategy-Focused Organization, rather than looking to implement a simple balanced measurement system, as was the case for many of the early scorecard adopters.

Specifically with reference to Asia, where I do a lot of work,  I strongly believe that the Balanced Scorecard will become even more enduring in that continent than it has even proven to be in the West. As one Asia-based commentator recently said to me:

“In Asian organizations, and in sharp contrast to Western companies, once something becomes a process it tends to stick. It might take a bit longer to get embedded into the fabric of Asian management, but the psyche is much more process-driven. And many of the cultures in Asia are willing to take a longer-term view.”

Western organizations should take note.