Results-Based Management vs. Balanced Scorecard for Strategy Implementation

Results-Based Management (RBM) framework follows disciplined performance measurement and highlights clear causality between implementation and results.

Results-Based Management in the non-profit/governmental sectors is the counterpart of the Balanced Scorecard framework popular in the private sector.

A Results Chain map in the Results-Based Management framework. Source: Results-Based Management.

In this article, we’ll discuss:

• Background of the RBM framework;
• RBM’s implementation process;
• How the RBM framework compares to the K&N Balanced Scorecard and OKRs, and
• Practical examples of implementation.

History of Results-Based Management

Results-Based Management (RBM) is a framework derived from the Logical Framework (see LogFrame template in BSC Designer), which was originally adopted by the US Agency for International Development from the US Department of Defense in the 1960s¹. The practical implementation of the RBM framework on a larger scale began in the 1990s within UN agencies ², with adoption among Non-Governmental Organizations (NGOs) and Development Organizations.

Independently, in the private sector, a similar trend of expanding existing reporting frameworks beyond the financial perspective led to the creation of the first version of the Kaplan and Norton Balanced Scorecard, presented in 1992³.

Both frameworks have undergone significant development stages, evolving from performance measurement tools to comprehensive strategy management and execution frameworks. While there are certain differences in terminology and target audience, they coincide ⁴ in their base principles.

For references and examples of formal implementation, see:

• The UN Results-Based Management Handbook
• Canada’s Global Affairs pages

For the Balanced Scorecard framework, you will find some references on our website:

• What’s Balanced Scorecard
• Balanced Scorecard implementation in a complex business environment
• Balanced Scorecard in nonprofit organizations

For a comprehensive understanding of the strategy frameworks and their unique functions, I recommend reviewing the framework ecosystem article⁵.

Implementation of Results-Based Management

Below we review the implementation of the Results-Based Management Framework at the process, design, measurement, and alignment levels, following the UN’s approach to RBM (see the references above).

Process Level

At the process level, the Results-Based Management framework features an approach similar to the classical PDCA (Plan-Do-Check-Act) cycle, formulated in this framework as:

• Planning
• Implementation/monitoring
• Evaluation
• Learning

Strategy Description Level

At the strategy description level, the framework is visually represented in the Results Chain diagram, which features the cause-and-effect logic between:

• The implementation segments: inputs and activities
• The results according to segments of various scopes: outputs or operational results, development results or outcomes, and impact.

A Results Chain map in the Results-Based Management framework. Source: Results-Based Management.

The strategy analysis and subsequent description include the following components:

• Stakeholders
• Priorities or focus areas (e.g., strategic themes)
• Goals with measurements (detailed on the measurement level as explained below)
• Assumptions (rationale and strategic hypotheses)
• Risks
• Strategies (action plans)
• Expected results/accomplishments

A Results Chain map in the Results-Based Management framework. Source: Results-Based Management.

Measurement Level

In its performance measurement part, the framework requires the use of performance indicators with defined:

• Baseline
• Target
• Data collection methods
• Frequency
• Responsibility
• Data source to verify the indicator

Alignment Level

The UN Results-Based Management Handbook emphasizes the need to align with other tools for strategy analysis:

• Stakeholder analysis
• Environmental scan (for example, PESTEL analysis)
• Problem Tree analysis
• SWOT matrix

Position in the Ecosystem

According to the decomposition methods employed and the rich strategy description toolkit, the position of the framework on the ecosystem diagram is next to the K&N Balanced Scorecard within the cause-and-effect decomposition segment and application area in strategy execution and description areas.

Results-Based Management vs. Balanced Scorecard

As noted above, both frameworks have similar historical backgrounds. In their latest versions, the frameworks share:

• Cause-and-effect logic between the perspectives
• Strategy description components (goals, performance indicators, risks, initiatives)
• An emphasis on the need for strategy cascading and alignment with outputs of other strategy tools

Below, we discuss some differences in implementation.

Finance/Stakeholder Perspective vs. Outcomes

The expected long-term behavioral changes in Results-Based Management are grouped under the Outcomes segment. Following a similar cause-and-effect logic, the long-term outcomes within the Balanced Scorecard are mapped in the Finance perspective.

The ability to formulate strategies in domains without financial outcomes is often cited as an advantage of the RBM framework. The Financial perspective of the Balanced Scorecard might make the framework appear applicable only to the private sector.

In practice, following the overall trend of shifting from shareholder value to stakeholder value, the Finance perspective in the Balanced Scorecard is often renamed the “Stakeholder” perspective to map a wide range of stakeholder needs. The causality between the perspectives remains the same, but the revised version is suitable for non-profits.

Causality is More Obvious within Results-Based Management

As visualized in the Results Chain diagram, the causality in the RBM framework is straightforward:

• Inputs (budget, resources) lead to activities
• Activities lead to direct outputs (operational results)
• Direct outputs lead to outcomes
• Outcomes lead to impact

The causality in the Balanced Scorecard is similar:

• There are “driver” perspectives (Learning and Growth, Internal Business Processes), and
• There are “outcome” perspectives (Customer and Stakeholders).

However, my two decades of practice with the Balanced Scorecard framework show that causality is frequently overlooked. One of the reasons is that business professionals often use the first-generation Balanced Scorecard, focusing on its performance measurement aspect, grouping goals/indicators into perspectives for sorting purposes, and simply ignoring the cause-and-effect logic. This is one of the notable factors in failed Balanced Scorecard implementations.

The name of the “Customer” perspective is also a typical source of confusion. Following the cause-and-effect logic, the company should map the needs of the customers in this perspective, which, once satisfied, would lead to expected results for the stakeholders. In practice, companies often formulate their own aspirations about customers in this perspective, which don’t always make sense in terms of cause and effect.

Another approach popularized within the Balanced Scorecard is the definition of leading indicators to quantify success factors and activities, in addition to lagging indicators that quantify outcomes. This is another way to integrate causality into the strategy. In practice, leading indicators are often overlooked, especially when no specialized software is used.

The bottom line is that both frameworks suggest mechanics to reflect the causality of strategy.

The approach of Results-Based Management is more visually clear “by design.” This helps avoid some common mistakes often seen in Balanced Scorecard implementations.

Results Chain Diagram Lacks Supporting Details Compared to Strategy Map

The Balanced Scorecard has a strategy map as its core visualization tool. A similar visualization tool in the RBM framework is the Results Chain diagram, which shows the causality between inputs and outputs.

The notable difference is that in most official guidelines for the RBM framework, the supporting components of the strategy are formulated in separate matrices/tables rather than directly in the Results Chain diagram. For example, in the UN Handbook:

• Performance indicators are listed in the “Results matrix” and “Indicators” table.
• Risks are listed in a separate “Risk Matrix.”
• Rationale, expected outcomes, and key challenges are also formulated in separate tables.

This is explainable by the legacy of paper-based workflows. In the practical section below, we’ll discuss an example of how the mentioned components can be implemented directly into the Results Chain diagrams, making them more effective for internal discussions and presentations to stakeholders.

Difference in Terminology

There are certain differences in terminology between the frameworks:

• “Priorities” or “Focus Areas” in RBM are very similar to the Balanced Scorecard’s strategic themes.
• The guiding questions suggested in the UN’s RBM for “strategies” (“How do we get there? What are the risks and assumptions? How much will it cost?”) are very similar to initiatives in the Balanced Scorecard.

Results-Based Management vs. OKRs

At first glance, the Objectives and Key Results (OKRs) framework might seem like an alternative to Results-Based Management (RBM) because both focus on “results” in their names.

In practice, the mechanics of causality within these frameworks are quite different:

• In RBM, causality links lower-level operational inputs and outcomes to higher-level impacts.
• In OKRs, causality is narrowly focused, typically with a short-term (quarterly) planning cycle.

The primary use of OKRs is in goal setting, which can effectively complement the operational aspects of the RBM framework, but not replace it.

Practical Implementation with BSC Designer

The Results-Based Management framework is available as a template along with other strategy tools from the ecosystem.

To create an empty template:

1. Navigate to Strategy Workspace
2. Select New > New Scorecard > More templates
3. Select “Results-Based Management”

If your organization uses a different design or names for the perspectives, consider customizing the default templates to follow established standards.

Adding Goals

Following the logic of the framework:

• Fill in the implementation perspectives (inputs and activities).
• Fill in the results perspectives (outputs/operational results, outcomes/development results, impact).

Each perspective includes its guiding questions in the description.

The template also includes an example of how a goal can be mapped.

To add a new goal within each perspective:

1. Select a perspective.
2. Click Add.
3. Enter the name of the goal.

Adding Supporting Details

According to RBM, the supporting details for the goals include:

• Performance measurement. Use the “Add” button to add a new indicator to a goal.
• Risks. Use Add > Add Risk button to add a new risk item and adjust risk estimations via Probability and Impact indicators.
• Expected results. Use Initiatives > Add > Change type to Expected outcomes.
• Assumptions. Use Initiatives > Add > Change type to Rationale.
• Strategies (action plans). Use Initiatives > Add > Initiatives.

For performance indicators:

• Switch to the “General” tab to adjust its name, use the description field to specify the measurement method used, and reference the data source to verify the indicator.
• Switch to the “Data” tab to adjust its properties (current value, baseline, target). If data is available via an accessible data source, consider connecting to the data source directly for automatic data updates.
• Click on the “Values Editor” button to adjust its update interval.

Responsibles

For all items (goals, initiatives/strategies, indicators), there is an Owner field to define the person or team responsible for execution.

Stakeholders

Via the Owner control, stakeholders can be assigned to the goal. In a different article, we explained the recommended workflow for conducting stakeholder analysis and syncing the results of stakeholder analysis with the stakeholders in the account.

Supporting Documentation

For all items (goals, initiatives/strategies, indicators), there is an option to upload supporting documentation.

Strategy Presentation

The platform will automatically generate the Results Chain map. By default, the map will feature all relevant information, including performance indicators, risks, initiatives, rationales, etc.

The level of detail on the map can be limited via the map settings. For example, the display of performance metrics can be disabled.

Another way to control the level of detail on the map is by using the “Display on map” property available on the “View” tab for Goals, KPIs, risks, and in the Initiatives dialog for the initiatives.

The designed map can be exported to an image file in high resolution for possible use in presentations or printing.

Data Visualization

The data associated with performance indicators and risks can be visualized on the dashboard. A general logic for adding an item to the dashboard is:

1. Switch to the Dashboard tab and click the Add button.
2. Select the item that will be the data source for the diagram.
3. Select the type of diagram and its settings.
4. Click OK to finish.

In a different article, we discussed best practices for designing dashboards.

Alignment with Other Tools

The UN’s RBM emphasizes the need to align the RBM with other strategy tools, such as stakeholder analysis and analysis of external factors (see the Alignment level of the implementation process).

In BSC Designer, you will find templates for popular business tools. The templates also include links to informational articles (once a template is added to your account, look for the green “i” button) that explain how to use the template on a conceptual level.

On a practical level, the alignment/connection between the goals within the Results Chain and outputs of other strategy tools is important. This connection can be logical (by context) or direct (by data).

In both cases, to create a connection between the Results-Based Management framework and the strategy tool:

• Have two tabs open (one with the RBM framework and another with the strategy tool).
• Copy and paste the required output of the framework into the RBM framework.
• When asked, select to connect by data or by context.

In the case of a data connection, the output indicators of the strategy tool will be connected to the selected item in the Results Chain. In the case of a contextual connection, the linkage between outputs and the Results Chain item will be displayed on the “Context” tab.

This connection mechanism is valid for all components of strategy frameworks: indicators, goals, risks, and initiatives.

Executive Summary

With proper automation tools employed, the Results-Based Management framework with its Results Chain diagram is an effective strategy implementation and execution tool.

It matches the well-known Balanced Scorecard framework in its core principles:

• The causality of the strategy
• Quantification of goals
• Alignment with sub-strategies and other strategy tools

While there are nuances in terminology and implementation, both frameworks effectively address the challenge of managing an organization’s strategy beyond the financial aspect.

Alexis Savkín

Alexis is the CEO of BSC Designer with over 20 years of experience in strategic planning. He has a formal education in applied mathematics and computer science. Alexis is the author of the “5 Step Strategy Deployment System”, the book “10 Step KPI System”, and “Your Guide to Balanced Scorecard”. He is a regular speaker at industry conferences and has written over 100 articles on strategy and performance measurement. His work is often cited in academic research and by industry professionals.