Why do Organizations develop a Balanced Scorecard?

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What are the top reasons that organizations implement the Balanced Scorecard?

asked Mar 24 '10 at 21:08

Dylan's gravatar image

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A survey conducted by CFO Magazine in the early 1990’s found that only 10% of company strategies are successfully executed. The reasons for the lack of success were grouped into four main categories:

  1. The Vision Barrier: Only 5% of the workforce understands the strategy
  2. The People Barrier: Only 25% of managers have incentives linked to strategy
  3. The Resource Barrier: 60% of organizations do not link their budgeting process to the strategy
  4. The Management Barrier: 85% of Management team spend less than one hour/month discussing strategy

The Balanced Scorecard is designed to address these barriers to successful strategy implementation.

answered Mar 24 '10 at 21:09

Dylan's gravatar image

Dylan ♦♦
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Simply put, organizations implement the Balanced Scorecard to better align their measurement system to their strategy. There are a lot of fancy ways of saying this, but it all boils down to the fact that people respond to what they are measured on. And so if you measure them on things that help you achieve strategy, that's a good thing.

answered Apr 08 '10 at 14:13

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Matt Jensen
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