Is the 4G BSC (fourth-generation BSC) is replacing 3G BSC (third-generation BSC) developed by 2GC people?

asked Nov 10 '10 at 09:30

Paul's gravatar image

Paul
1113


Interesting question. The answer is currently no, but I would like to think that one day the answer will be yes.

To understand why this is so, a couple of things in your question need a bit of clarification / qualification.

First up, 3rd Generation Balanced Scorecard is a label that was coined by 2GC in a research paper on Balanced Scorecard design published originally in 2004. It is used in this research paper to describe a form of Balanced Scorecard that is a clear evolution of earlier forms, and explains both why this evolution happened, and likewise characterises the 1st and 2nd Generation designs. Simply put, a 3rd Generation Balanced Scorecard design has more component parts in its documentation than is found in designs based around earlier design generations. Think of it in the same way it is used in the mobile phone business - a whole host of vendors produce "3G" telephone handsets. The handsets are each different and have particular attributes, but all share a common way of working. So also with Balanced Scorecard design generations.

One of the key points in the research paper was the observation that the changes in design over time have been in response to design flaws and weaknesses in earlier work. Insofar as 3rd Generation Balanced Scorecard builds on these earlier design efforts, the design methods it embodies are indeed 'better' (i.e. contains fewer known flaws) than what went before. It is encouraging therefore that over time, the additional elements that define 3rd Generation Balanced Scorecard are increasingly being introduced by performance management designers to the various proprietary takes on 2nd Generation Balanced Scorecard designs used by some firms (e.g. Palladium, API, others). This migration is also evidenced in the recent 2GC 2010 Survey of Balanced Scorecard Usage - where the proportion of firms reporting using 3rd Generation Balanced Scorecard style Balanced Scorecards is considerably larger than even ambitious determinations of 2GC's 'market share'.

I and my colleagues at 2GC (which has been closely involved in the conceptual and theoretical development of Balanced Scorecard for over a decade) wrote the original research paper in which the 3GC term was used. So it is perhaps unsurprising that the versions of Balanced Scorecard we deploy in our work for clients usually have 3G characteristics.

While we at 2GC and others look forward to someone writing an updated version of the 2GC 'evolution' research paper, and characterising a further improved '4G' Balanced Scorecard design, to the best of my knowledge no such paper has yet been written. Not to say it won't be, or can't be, but simply just that it hasn't yet been. We look forward to the development, and to using the improved methods in our work.

However, as you point out, there are various people out there promoting "4G" Balanced Scorecards (we at 2GC have spotted at least four different promotions using this term so far). In the absence of the research definition of the term, what do they mean by 4G? For the most part the offerings we have seen claiming to be '"4G" comprise a fairly standard "2G" Balanced Scorecard but with some other function bolted onto the design process - messing around with computer based analytics for various purposes being one such. Further, there is no consistency between the various promotions. We conclude that really the term is simply a weak attempt to 'differentiate' their offerings. I hope you can see that their use of the 4G label is of a different nature to that behind the use of the 3G label we first coined.

I hope all this makes some sense.

answered Nov 15 '10 at 05:28

Gavin%20Lawrie's gravatar image

Gavin Lawrie
1315

Your answer was helpful Mr. Lawire, It's pretty clear to me now that 4G Balanced Scorecard is not actually replacing 3G Balanced Scorecard (advanced by 2GC) yet. I have noticed, like you said, some performance management (or BSC) consultants have been promoting their own versions of 4G BSC without strong theoretical and research backups. I have just began my interest in possible application of BSC at college and university almost nine months now (I am a college teacher myself). From my internet search I found that some universities in the U.S., Canada, the UK, and Australia have adopted BSC as performance management tool but most are still limited to departmental or (SBU) level only; very few have gone institutional-wide adoption of BSC. Besides these institutions were still using 1G or 2G Balanced Scorecard; I haven't come across any of them using 3G Balanced Scorecard yet. It seems to me that education industry sectors have not shown much enthusiasm in BSC application. I would like to hear your opinion on this matter. Also a friend of mine, a doctoral student, who is doing her doctoral dissertation on BSC application in academic department performance management in Thailand is still unable to decide if she should go for 3G or 4G Balanced Scorecard for her dissertation research. I recommended her to read papers from 2GC and compare them to those papers (if any) advanced by other consultants (mostly based in the UK, Australia, or North America). By the way, I have downloaded all 2GC papers and still reading them. I hope to be able to read more of 2GC papers. Paul

answered Nov 21 '10 at 04:12

Paul's gravatar image

Paul
1113

edited Nov 21 '10 at 04:15

Hi Paul

Thanks for the feedback. I'm glad you found the 2GC materials useful.

You need to be cautious about reports of Balanced Scorecard usage - not only are there very many types of Balanced Scorecard in use, and used for diverse purposes, but the reporting of use is patchy at best. Merely because a Balanced Scorecard is written about doesn't mean it is used (or in some cases, even exists): partly this is because it is in the interests of some parties to claim Balanced Scorecards where there are none (e.g. for marketing reasons), and partly because Balanced Scorecard is a transient thing - typically a management team will choose to use one, but as that team changes so focus may drift to other tools / methods etc.

Although education has not shown huge interest in apply Balanced Scorecard to itself, education has not held back on the topic of performance management more generally - there appears to be an unrelenting drive towards ever more data collection on student and teacher performance. Whether this data collection is purposeful or not is unclear, and the extent to which it has improved performance is clearly still the subject of much discussion.

I know some interesting work to apply Balanced Scorecard to an academic institution is going on right now in IIUM in Malaysia: your friend might find it helpful to talk to someone from the team there. If you contact 2GC directly I would be happy to let you have a point of contact there for her to approach - you can find contact email addresses for 2GC on our web site (click on the "general enquiry" link) - and quite possibly through this forum system too.

Hope this helps.

answered Nov 24 '10 at 09:33

Gavin%20Lawrie's gravatar image

Gavin Lawrie
1315

I think the best study (i.e., least controversial) study on Balanced Scorecard usage in the annual Bain & Company report on management tools. You can find it on Bain's website. Bain has no "skin in the game" on the usage (or lack thereof) of the Balanced Scorecard, unlike Palladium and some of the other surveyors out there. Balanced Scorecard has been pretty regularly in the top 10 for the past 5 years or so (maybe even 10, I'd need to go back and review past reports.)

As for the use of the Balanced Scorecard in education, we're seeing (and working with) a number of K12 public school systems here in the United States on implementing the Balanced Scorecard. A write-up the work in Atlanta (that I co-authored with Bob Kaplan) is available on the School Administrator website. There's also been some well-publicized work on the implementation of the Balanced Scorecard at the University of Leeds in the UK.

answered Dec 01 '10 at 14:05

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Dylan ♦♦
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Asked: Nov 10 '10 at 09:30

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Last updated: Dec 01 '10 at 14:05

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