Mar 3, 2003

On the Balanced Scorecard:

My opinion is that companies after taking these quadrants of the Balanced Scorecard get back into the old rut of managing by metrics.

Let's take the example of the focus of the BSC on Customers. Many instances can happen as to how companies can interpret this quadrant. For example, one company can say it will measure "the number of times we meet our customers" which is at a very basic activity level kind of measure. While, another can choose to measure "Customer Satisfaction level" and while it is a
more 'evolved' method than the first one, it can still deteriorate into meaningless number crunching. While a third company can say "Using the Pareto principle, let's see which 20% customers contribute 80% of our business , take their feedback and measure as to how we have implemented their views into our products/services"

So while all the three firms can claim to implement the BSC only the third one is actually using it to its full potential.

The really worrisome part is that the BSC is now being touted by IT firms and the real fear is that of getting snowed under data.