Scorecard Best Practices

What Is a Scorecard System?

The terms scorecard and Balanced Scorecard are often used interchangeably. Popular definitions include: A strategic management tool that helps measure, monitor, and communicate your strategic plan and goals throughout the organization in a way that is understood by everyone (The Financial Gazette, July 3, 2003). A balanced scorecard is a framework for implementing strategy that translates an organization's mission and strategy into a set of performance measures (Cost Accounting: A Managerial Emphasis. Horngren, Datar, Foster 2005).

Some believe that a scorecard system is one that relies solely on the concepts of the Balanced Scorecard introduced in 1992 by Robert Kaplan and David Norton.¹ Originally, these two pioneers combined the notion of explicitly stating and communicating strategy with tracking important metrics through a standard organizing framework. Subsequently, other scorecard practitioners have recognized the need for alternatives to the original Balanced Scorecard framework to reflect differences among organizations in their structure and competitive environment. Even Norton and Kaplan recognized that their original “one‐size‐fits‐all” framework model, although an excellent staring point, often needed to be tailored for specific organizations. Chapter 5 will examine popular organizing frameworks and also the idea of not working within a framework at all.

Although it may be important to consider the use of software, scorecard systems are ...