There are way too many “examples” of the Balanced Scorecard. You can find a 4-sector graphical diagram or a poorly formatted spreadsheet with some KPIs. In these examples you won’t find any strategy map, business objectives, or any specific reason how this scorecard is supposed to help you to improve the performance of your business.
Balanced Scorecard Examples
As we have discussed before, any business scorecard is about the description of your strategy using such tools as strategy maps, KPIs, business objectives and specific action plans. We’d like you to explore some examples of the business scorecards. You can use these examples as a starting point to design your own business scorecards or implement them into a specific company department.
Hotel Balanced Scorecard
Nonprofit Balanced Scorecard
HR Balanced Scorecard
Dental Practice Balanced Scorecard
Sales BSC and KPIs
Content Marketing Strategy Described with Balanced Scorecard
Employee Engagement Scorecard
Examples of “bad” scorecard practices
While discussing some good examples of BSC that one can follow, I think it also makes sense to share some “bad” practices about balanced scorecards that you need to avoid.
Bad practice 1: Using 1st generation BSC model
Have a look at the diagram below. Does your scorecard look like this? This is an example of what a 1st generation BSC looks like.
According to the recent survey 30% of participants still use the 1st generation model. If you have just this diagram without any supporting documentation that explains your strategy (hypothesis that you are trying), then you are in trouble! Move to the BSC based on the strategy map.
Bad practice 2: Cause-and-effect connection problem
A Strategy map is a key part of the Balanced Scorecard. It explains a cause-and-effect connection between business goals, and how these goals contribute to the stakeholders’ interests. That’s why:
- Any goal on the map needs to contribute to or be contributed by some other goals
- A chain of goals should go from the top perspective (Finance or Stakeholder Interests) down to the bottom perspective (Learning & Growth)
- A consequence of the previous: there should be no dead-ends
Here is an example of the strategy map with the mentioned problems:
In this article you’ll find a detailed guide on the strategy maps.
Bad practice 3: Focusing too much on metrics that don’t matter for your business
On the balanced scorecard you should focus on the KPIs that are relevant to the strategy.
Operational vs. strategic
The KPI part of the balanced scorecard is responsible for the performance measurement. The most typical problem is mixing operational KPIs with strategic ones. As a result, the balanced scorecard is overloaded with metrics that are not relevant to the strategic ideas that were discussed.
For example, on this scorecard we can see that some low-level operational indicators are mixed with strategic ones:
There are two solutions:
- Put operational KPIs into a separate scorecard/dashboard
- Cascade the scorecard to the respective business unit or person
Lagging indicators problem
Another frequent problem is that most indicators are lagging ones. They measure what already happened, but don’t give you a clue about how to improve the results. Have a look at this scorecard, what indicators help to manage the situation rather than control the results?
Paying too much attention to the KPIs
This is not obvious, but what matters is your strategy and business goals. KPIs are important, but don’t focus on them too much. When dealing with KPIs it is important to keep the big picture in sight. Here is a good example of how KPIs might harm the strategy execution if one forgets this simple rule.
- Find further discussion of the bad practices in the article “Typical Balanced Scorecard Pitfalls and How to Avoid Them.”
Getting More Samples
More business scorecard projects are available for free and here is how you can get them:
1. Download the trial version of BSC Designer PRO. The download is completely for free, no strings attached, we don’t ask you to enter any credit card details.
2. Start “BSC Designer PRO” and then open any business scorecard projects from “BSC Designer\Samples” folder.
Working With Examples
Before getting into the details, review what you have there. Open any example from the “Samples” folder in BSC Designer.
- Go to the “KPIs” tab, you will find there a list of suggested KPIs
- On the “Business goals” tab, you find examples of business goals and objectives that this scorecard might address
- On the “Strategy map” tab, you will find the map that visualizes business objectives and KPIs
Finally, check the description of the project. You can access it from menu File -> Document Properties. You will find there a link to an article that explains why the suggested scorecard is a good option for addressing specific business problems.
Customizing the scorecard for your needs
These projects are good examples of how the scorecard or the part of the scorecard for a specific topic might looks like. You will still need to do a careful analysis of your business situation and find the best way to address it. We were talking about solving this task in the previous article.
These examples will work as an inspiration and hopefully will help you to come up with excellent business insights that are applicable to your business.
With BSC Designer PRO (even in the trial mode) you can:
- Export a scorecard to MS Excel or MS PowerPoint
- Prepare an HTML report based on your data
- Export your strategy map in a picture file
- Visualize important KPIs on the dashboard
Beware of Spreadsheets
We’d like to warn visitors to our website about the scorecards designed in the spreadsheets. These scorecards might look nice, but there is one big pitfall about using them:
- When you need to change your scorecard, add some new data, or update an existing one, you will face the problem of its maintenance.
Spreadsheet tools are affordable, as Excel or OpenOffice’s versions are on each desktop, but it is not a recommended tool for a business scorecard. If you are interested in learning the details and facts, check out this article.
Implementing Balanced Scorecard
You have some examples of how Balanced Scorecard might look like, but this is just the beginning of the implementation. It’s not that easy, as creating some KPIs and asking everyone in the company to track them.
Balanced Scorecard is about strategy execution, so you will need to analyze your business challenges, come up with a good strategy, describe it on the strategy map, and add some tracking in the form of the metrics.
Finally, it doesn’t make sense if you do all this alone, so you will need to involve your team in the early stages. We discuss all these nuances in the article about BSC implementation.