The Balanced Scorecard is a business framework that helps to manage the gap between strategy planning and execution. Learn more about the facts of the framework, typical pitfalls and the expected performance improvements.
- The most common use scenario of the Balanced Scorecard is to implement organizational strategy
- 56% of organizations use some kind of automation software
According to Management Tools & Trends – 2018 by Bain & Company
Business tools ranking based on usage:
- Strategic Planning (48%)
- Customer Satisfaction (38%)
- Mission and Vision Statements (32%)
Among 25 most popular tools:
- Agile Management (2nd place)
- Balanced Scorecard (3rd place)
- Complexity Reduction
- Mission and Vision Statements
- Strategic Planning
According to the Balanced Scorecard Collaborative
- 95% of a typical workforce does not understand its organization’s strategy
- 90% of organizations fail to execute their strategies successfully
- 86% of executive teams spend less than one hour per month discussing strategy
- 70% of organizations do not link middle management incentives to strategy
- 60% of organizations do not link strategy to budgeting
According to Balanced Scorecard Forum
- 80% of organizations using balanced scorecard reported improvements in operating performance
- 66% of these organizations reported an increase in profits
According to Bain & Co
- About 70 percent of organizations had at least partially implemented a balanced scorecard by 2006.
- 50 percent of Fortune 1,000 companies are using the balanced scorecard
According to Microsoft Business Intelligence Conference
- 30% of companies think that the most important to their company today is performance management
According to the Indeed.com Salary Survey
- For the title “Balanced Scorecard,” average Yearly Salary as of 2012 is $112,000.00
- Average balanced scorecard salaries for job postings are 84% higher than average salaries for all job postings.
According to the 2014 Global State of Strategy and Leadership Survey Report
- 72% of the survey’s executives answered that their business model “will be under threat in the next five years.”
- 54% of respondents reported poor vertical alignment.
- For strategy description, executives use: 61% SWOT, 55% Financial Modeling, 49% Balanced Scorecard
According to the annual BSC Usage Survey for 2014
- 64% of participants responded that they use the BSC for their strategic management.
- 44% of the participants also responded that they report according to the BSC monthly.
According to a study by Cranfield University
- More than 50 percent of large enterprises use some type of a balanced scorecard
According to the BSC Frustration and Challenges report
- 30% of BSC frustrations and challenges are associated with Balanced Scorecard motivation aspects
According to the 2GC Balanced Scorecard usage survey:
- 31% of companies reported the Balanced Scorecard as extremely helpful, 42% as very helpful
- 34% of interviewed companies use BSC for strategic management, 35% for reporting, 17% for operational management
- 29% of companies used external consultants to design Balanced Scorecard
- The most significant impacts of BSC implementation were found in business actions (83%) and behaviors (58%); appraisal has impact of 63%, and reward system has lower impact (about 30%)
- Most Balanced Scorecards were used for the purpose of planning (79%), budgeting (70%), goal setting (51%)
According to the Annual Business/Balanced Scorecard Survey:
- 37% of respondents are not satisfied with the way they measure their organization
- 67% of respondents use spreadsheets
Editor's note: check out spreadsheet vs. specialized software analysis
- 19.5% use specialized performance management software
- 19.5% answered that their business scorecard provides the right level of information to make strategic decisions
- 31.2% have 11-20 KPIs on their scorecards, and 37.7% have 1-10 KPIs
- 40.3% of respondents confirmed that scorecard has a commitment from executive management, only 18.8% responded that there is a commitment from departments
- For 44.2% of participants, a business scorecard is still a measurement, not a management tool
- 20% of companies successfully implemented performance management software products and reported a positive influence of their scorecards on the ultimate business performance.
What the Experts Say
We interviewed a number of performance management experts. Check out what they think about BSC, KPIs, and other popular business tools.
When we do a presentation of BSC Designer software, people often ask: Who is the typical user of the BSC Designer? I’d formulate this question wider: Who is the typical user of the Balanced Scorecard concept?
While most business professionals can benefit from this concept, there are certainly some specialists that are in our main user profile.
- CEOs, company founders
- Business Strategy and Strategic Planning professionals
- Change Management, Process Improvement and Business development specialists
- Process Management managers
- Business Analysis and Management Consulting professionals
- Quality Assurance managers
- HR specialists
- Supply chain managers
- Marketing managers
- Operations directors
Advantages and Disadvantages
We also analyzed some advantages and disadvantages of the Balanced Scorecard framework. You can find the results of this analysis here.
Balanced Scorecard Among Other Frameworks
When it comes to strategic planning, the Balanced Scorecard framework is not the only option. Check out this article to learn more about the additional/alternatives tools.