I saw someone peddling the idea that 70% of balanced scorecard projects fail. A statistic that is somewhat distorted from the original author’s definition of 70% of performance measurement initiatives.
There is an expression I fall back on in these when I hear these sort of statements- “Those that say it cannot be done should not get in the way of those that are doing it”.
But let is just clear up some facts.
Do 70% of balanced scorecard projects fail?
Yes 70% of (so-called) balanced scorecard initiatives probably do fail, but as McKinsey and Hackett cite, 70% of so called balanced scorecards fail the most basic test of being balanced. They fail as a tool of strategy- they are just bicycles claiming to be cars. So it is no surprise many so called balanced scorecards, which are actually mere measurement projects, do fail.
The original source of this statistic was referring to ‘performance measurement initiatives’. (see “Do 70% of balanced scorecards fail? No“) Not to balanced scorecards, many of which are aimed at strategy execution, not merely performance measurement.
A failure of naming and understanding balanced scorecards
Just because some practitioners do not understand how to make them work, and many organisations use them simplistically, does not mean all are flawed, or the fundamental approach is flawed. It merely means that the principles are not understood properly, nor followed properly.
I have many clients who use strategy maps to drive their balanced scorecards, they work really well. They solved their problems and help them manage better.
What is the bigger problem: A failure to ask the tough questions
To be frank I will tell what the biggest problem is. The tough questions about causality between objectives in perspectives get avoided. Either by practitioners who are afraind to ask them or managers who do not wish to answer them. When this happens the resulting scorecard degenerates into a set of whatever you have operational measures – and they fail.
I have seen organisations who get it wrong, apply it simply and fail to get the benefits they should really get. But I blame poor quality of thinking and conversation based upon a mis-understanding of the principles.