Summary

A large number of companies successfully use some form of Balanced Scorecard to drive their performance management. One reason for this probably lies in the fact that the bottom line of a company is actually fairly easy to describe.

However, building and implementing a Balanced Scorecard Management System within a public sector organization presents a challenge that is different from what private sector organizations encounter. For instance, public sector organizations typically need to place ‘customer’ as the top strategic perspective as opposed to ‘financial’.

Summary

Over the years, a number of business excellence models have been developed to serve as performance management frameworks. Some examples are the Malcolm Baldrige Model, the European Foundation for Quality Management (EFQM) Excellence Model, the Australian Business Excellence Framework and the Singapore Quality Model.

This article seeks to examine the key question of which framework organizations should use and concludes that organizations should use a combined approach.

As part of the argument, the article first takes an-depth look at the Malcolm Baldrige Framework, the seven criteria that form part of the framework and organizations that have successfully used the Baldrige model. Then, the article looks at the EFQM Business Excellence Model and looks at successful practitioners.

Summary

Businesses and organizations are fundamentally re-evaluating their approach to planning and performance management. As part of this process, many have chosen the Balanced Scorecard as an appropriate strategic management tool for delivering more sustained performance improvements.

This article examines another powerful emerging idea – Beyond Budgeting – and describes how it is proving to be a superior alternative to the conventional budgeting approach. Leading this paradigm shift is the Beyond Budgeting Round Table, which has brought much clarity to the debate about the value and validity of the budget. In doing so, argues the author, it has generated practical insights for those involved in Balanced Scorecard initiatives. In support of this argument, the author examines the key dimensions of the Beyond Budgeting movement and how organizations are freeing themselves from the limitations of the budget mechanism. Interestingly, many of these aspects find echo in the Balanced Scorecard philosophy. The author summarizes the six external factors of change identified by the Beyond Budgeting Round Table.

Summary

In this article, Peter Ryan, Corporate Performance Manager for the Christchurch City Council of New Zealand and expert on performance management in the public sector, points out that the science of successful creation and use of the Balanced Scorecard methodology is widely understood in the case of the private sector and government agencies with narrow regulatory fields. However, points out Ryan, government agencies in charge of complex and diverse services have no body of best practices to draw on when they use the Balanced Scorecard. After dwelling on the challenges involved in developing such a body of knowledge, Ryan seeks to fill the gap and point out the differences between a successful and a failed scorecard implementation through an extensive comparative study of the scorecard implementation experiences of two cities – New  Albany (a hypothetical case of failure built around actual scorecard implementations) and Christchurch (a highly successful and much-acclaimed real case).

Summary

The Balanced Scorecard was introduced in 1992 and has since, given rise to a wealth of material that describes the concept’s preeminence for enterprise performance management (or corporate performance management, as it is also referred to). The material also covers themes like scorecard implementation and cascading the scorecard. However, very little has been written about the roles and responsibilities of the Balanced Scorecard Manager. This article seeks to fill the gap because expertise in strategy management is the most critical prerequisite for success in today’s dynamic business environment. Acknowledging this prerequisite, experts have proposed new concepts like the Office of Strategy Management.

Summary

This article examines the challenges of creating effective links between the Balanced Scorecard on the one hand and compensation and incentives on the other hand. Monetary incentives are, in principle, a powerful motivator for aligning employee efforts to Balanced Scorecard objectives. In fact, Robert Kaplan and David Norton, creators of the Balanced Scorecard, recommend the incentive-compensation link as a sub-component of the principle that calls for making strategy everyone’s everyday job. However, establishing a clear incentive-compensation link that actually works is one of the most challenging aspects of a Balanced Scorecard approach to enterprise performance management.

Summary

The world over, demand for performance transparency, responsibility and accountability of organizations is increasing – issues that form the core of corporate governance. This article argues that legislative and regulative interventions are not adequate to improve the corporate governance standards. In fact, a major analysis reveals that lack of compliance with accounting/financial rules and regulations is only a minor cause of poor performance. The analysis finds that strategic failure, such as misjudging consumer demand or competition, is a greater cause – pointing to the fact that corporate governance and corporate performance management are closely linked.

Summary

The US Postal Service has over 700,000 employees and delivers 212 billion pieces of mail annually to over 144 million destinations. Surprisingly, the strategic performance of such a huge organization is managed through a corporate Balanced Scorecard with only five goals and 10 measures.