Balanced scorecards are excellent, at least in theory.
They ensure that all parts of an organization are aligned with the overall organization’s strategic goals. Business units should have scorecards as should the individuals in them. For them to work effectively, the goals within them need to be at the right level for the business unit or individual.
Unfortunately, they are often not as effective as they should be. This is because leaders do not spend the time required to really identify helpful, meaningful goals, measures and actions for individuals. If individuals don’t accept their goals, cannot influence them or think they are just an administrative exercise, they will consider balanced scorecards an unfair means of assessing performance.
Our advice is that smaller and medium sized organizations should aspire towards using balanced scorecards. However, they should endeavor to spent the time needed to get them right. The activity of thinking through what should be on them is itself hugely helpful. We don’t mention larger organizations purely as we assume they are already using similar tools.