Typical Balanced Scorecard Pitfalls and How to Avoid Them

There are a number of typical problems that a company’s strategist faces when implementing the Balanced Scorecard framework. Those pitfalls were widely discussed on LinkedIn and it seems that everyone agrees on why those are problems and how to avoid them. But when it comes to identifying and fixing those issues in our own business then it appears to be a tough task. With this article I’d like to start a systematic discussion of typical problems, the ways to diagnose them, and of course, the ways to solve them. I’m sure you have something to add, so feel free to share your thoughts in the comments.

Typical pitfalls of the Balanced Scorecard and instructions to diagnose and avoid them

Pitfall 1. One doesn’t understand the difference between “Strategy” and “KPI” scorecard

This mistake is a good starting point for this discussion. We often hear from users of BSC Designer software something like that:

  • “We’ve created a Balanced Scorecard, but it doesn’t work as promoted by various institutions!”
  • “We did a scorecard, but it seems that performance management doesn’t work for our company!”
  • “Scorecard is good to track KPIs, but it helps only a little with strategy execution”

After a short review it is easy to find out that they have a “KPI” scorecard, not a “Strategy” (Balanced) scorecard. The difference is that the first is a pure measurement tool and the second is a management tool.

  • A KPI scorecard might be or might not be aligned with proper objectives and actions.
  • In  contrast, Balanced Scorecard is about alignment between business goals, actions, and measures.

Similar mistakes

  • Having too many KPIs. Most likely they are not KPIs, but simple metrics (learn the difference).
  • Having KPIs that are aligned with neither strategy nor action. Here are some best practices.
  • Believing in KPIs too much and losing the big picture of what’s actually going on. Here is a good example.
  • Having only lagging indicators. You need to have leading indicators as well.
  • Having financial KPIs only.
  • Not using strategy map with cause-and-effect connected objectives.

Diagnosis of the mistake:

  • Review the “Similar mistakes” section to find out if something can be applied to your scorecard.
  • If your business scorecard consists of KPIs only, then you have KPI scorecard, not a Balanced Scorecard.

Solution to the mistake:

  • You need to shift from measuring to managing. Think about  how your strategic goals are linked to specific objectives. What are you going to do to achieve them (you action plan)? How are you going to measure the process and the results (KPIs)?
  • Read “The Strategy Focused Organization” [1] to learn the benefits of a strategy scorecard compared to a KPI scorecard.

Pitfall 2. Promoting silo thinking

Ideally, strategy should be everyone’s job in the company. In  practice we see that many promote “silo thinking.” Instead of discussing strategy and finding the best way to execute it and track the execution progress, top managers tend to isolate strategies from each other and from their employees. They want people to see only their part of the job, and as a result, it is not a surprise that strategy is not executed properly.

Similar mistakes

  • A Balanced Scorecard that you have is used exclusively by top managers
  • The Balanced Scorecard was prepared exclusively by top managers without working with those who will execute this strategy
  • Poor vertical alignment; according to the recent research, 54% of interviewed executives mentioned this problem.

Diagnosis of the problem:

  • Randomly select some employees in your company and ask them about the relationship between their job and the company’s objectives. Ask how they cooperate with other departments to achieve those objectives. If they know only their part of the job well and have only a rough idea about the answers to the other questions, then you are facing silo thinking problem.
  • A key test: was your excellent strategy executed properly? If not, then your strategy discussion process need to be updated.

Solution to the mistake:

  • When describing a strategy, involve not only top managers, but also those who will execute this strategy. Try adopting Catchball approach from Hoshin Kanri.
  • Make strategy everyone’s job. Translate the scorecard idea to the lower organizational levels.
  • When two departments collaborate, don’t use just a format SLA agreement. Try to align it with your strategy. For example, in the way it was described here.

Pitfall 3. Description of the bad strategy

Balanced Scorecard is not a strategy definition framework (although it provides some generic strategies); it is strategy description framework. It means that it will certainly help you to understand and describe your strategy better, but it is not a magic pill. If you have no strategy or you have a bad one, then you will just formalize your bad strategy.

Diagnosis of the problem:

  • Have a look at your strategy-related documents. Do you have a description of business challenges that you’ve been facing? Do you have an analysis of possible alternatives to address these challenges? Are these alternatives reflected on your strategy map, in your action plans, and in KPIs? If you are not sure about your answers, then it is a good idea to get back to the strategy itself.

Solution to the problem:

  • First learn to recognize “bad” strategy; Richard Rumelt’s book [2] is an excellent guide.
  • Start from scratch: what problems do you face; how do you think you might fix it; what you need to do; how you are going to track your progress. Learn from this case study.

Pitfall 4. Lack of buy-in

You have a world-class Balanced Scorecard, but the only active user is you. People tend to ignore new technologies and tools that they don’t understand. If you don’t have a buy-in from top managers and line-level employees, your Balanced Scorecard won’t work.

Similar problems

  • Low interest from top management and/or line-level employees
  • Participation of top managers only

Diagnosis of the problem:

  • Is the data in scorecard KPIs updated on time? Are business goals actualized?
  • Do employees use your strategy map when discussing some aspects of strategy?

Solution to the problem:

  • An actual solution depends on the implementation stage. If you are just in the beginning and you need to convince top managers, then show these statistics figures, as they look impressive.
  • Update your strategy discussion process as suggested in “Pitfall 2”; small discussion teams and catchball process will help to generate more meaningful ideas. The rest (the formal description of the strategy) will be much easier.
  • Solve the problem in Pitfall 3; before you can convince others, you need to have a clear understanding of the current strategy.

More pitfalls?

What do you think about these pitfalls? Have you faced any of them? How did you solve those problems? Would you like to add something to the list? Please share your thoughts in the comments.


  1. ^ The Strategy Focused Organization, Robert S. Kaplan, David P. Norton, Harvard Business School Press, 2001
  2. ^ Richard Rumelt “Good Strategy. Bad Strategy. The difference and Why it Matters”, 2012, Profile Books LTD

Related Articles

Strategy and KPIs Scorecard Expert | Speaker | CEO. Aleksey Savkin (LinkedIn, @bscdesigner) is helping companies to better formulate their strategies and make the process of strategy execution more tangible with KPIs. His areas of expertise are Balanced Scorecard, Key Performance Indicators, business performance management. Aleksey is a frequent speaker at conferences; the author of a number of articles and books on Balanced Scorecard. New book by Aleksey: 10 Step KPI System

Posted in BSC Challenges

What is BSC Designer?

BSC Designer is a balanced scorecard software available as a cloud-based service and Windows desktop application.

Getting Started with BSC Designer

Try BSC Designer for free

Download BSC Designer

Who uses BSC Designer

According to our users, BSC Designer is easy to install, configure and it helps a lot with Balanced Scorecard, strategy maps, and KPIs.

BSC Designer Customers

Training for the software

To make it easier for the users to get started, we have a lot of free training materials for the software.

Video manuals for BSC Designer

Customer support

Should you have any questions, we are at your disposal.

Pricing and buying

How much does BSC Designer cost? It depends on the configuration that you prefer. Use this price calculator to find out the total cost, get an official quote, and buy the software.

What Balanced Scorecard is all about?

Fast Track explains complex ideas in a simple way Check out Strategy Scorecard Fast Track to find easy explanation of the most important complex ideas.
  • What is a Balanced/Strategy Scorecard?
  • How to build a good strategy map?
  • How to find winning KPIs?
  • How to cascade strategy?
  • How to implement scorecard
Learn all the nuances quickly and ask follow-up questions to BSC expert. Learn more...

What are your current challenges?

We help our users to get started with Balanced Scorecard, strategy maps, and KPIs. Here is a list of frequently asked questions and respective answers to them.

Q: What is the Balanced Scorecard?

Big picture about Balanced Scorecard A: Check out: Get the big picture about Balanced Scorecard article.

Q: I'm looking for a KPIs... how do I find good ones for our business?

How to find a KPI for... A: Check out our recommendations.

Q: Do you have some examples of the Balanced Scorecard?

Examples of Balanced ScorecardA: Sure, we have some here.

Q: Balanced Scorecard is about strategy execution, right? But what is a strategy?

Define strategy, create strategy mapA: Check these articles about strategy definition and creating strategy map.

Q: How do we cascade our top level scorecard throughout the company?

How to cascade a strategy mapA: Do it by business goals, some examples will also be useful.

More questions and answers...

BSC Lessons

Download BSC Designer and we will follow up with you with lessons about the Balanced Scorecard:

BSC Designer experts

Aleksey Savkin Performance Management and Balanced Scorecard

Kazim Ladimeji HR KPIs and Performance Expert

Levi Newman Effective KPIs and social metrics

Oana Boteanu Performance Management

Oleg Tumarkin Business Measurements

Upcoming events and talks

We organize, sponsor, and participate in various events related to the strategy execution.

  • "Building Balanced Scorecard Step by Step." 15th July, 2017, online training. Read more...

BSC Designer Roadshow in Athens, Greece, June 9-15, 2017. - Firsthand experience with BSC Designer software Drop us a note if you want to meet up at these events.

Online training: Build BSC step by step

The best way to get started with the Balanced Scorecard is to join our online training.

Balanced Scorecard Training Online Strategy map, KPIs, cascading - it might be hard to put it all together. In the online training "Building BSC Step by Step" we explain all the nuances in simple words and help companies to build a prototype of their balanced scorecards.

Find us on Google Plus

Thank you for sharing!

Whether you are looking for a professional Balanced Scorecard software, or just researching information about Balanced Scorecard and business strategies, we recommend you to download and try our BSC Designer software (no credit card is required).

We will follow up with you with lessons about the Balanced Scorecard and will keep you informed about the trending articles on bscdesigner.com

Follow us in Social Media

Send this to friend

More in BSC Challenges
Survey Results: Most Companies Still Fail to Implement Business Scorecards

Intrafocus, a corporate performance management software reseller and consultancy, published "Annual Business/Balanced Scorecard Survey - 2013" where 154 senior executives answered 12 questions about...

How to Convince the Stakeholders to Use the Balanced Scorecard Concept

The Balanced Scorecard is a business tool recognized world-wide by companies' executives. The secret of the successful BSC project is...