A recent posting on LinkedIn casually referred to the “statistic” that “70% of balanced scorecard projects fail”. Only 10 minutes research pulled up the original source for this statistic and it is clear that the statement is not what was said by the original source.
The original research on the failure of performance measurement initiative.
It seems that Neely and Bourne, (2002) wrote a paper in 2002 called, “The success and failure of performance measurement initiatives”. Note, that this is about all sorts of performance measurement initiatives, not just those that are using the balanced scorecard approach (or even a so-called balanced scorecard approach). So this is not why balanced scorecard projects fail. It is why performance management projects fail.
In that they quote a piece of research referring to something quite different. They refer to:
“A growing literature addressing the difficulties of implementation and it is claimed by some that 70 per cent of performance measurement initiatives fail” (McCunn, 1998)
You can read Neely and Bourne’s paper here: http://www.som.cranfield.ac.uk/som/dinamic-content/research/cbp/vol22.pdf
Note again, that McCunn (1998) is talking about “Performance management initiatives”, NOT Balanced scorecard projects. He is discussing a much wider set of activities.
More importantly, looking at the conclusions in the Bourne and Neely paper, they conclude:
- There are four clear factors that influence any new management process (Plat 1994)
- That many implementation problems can be overcome by using a structured method,
- There are specific factors that affect such implementations and
- Top management commitment is vital (and ignored by much literature).
In other words, like any other project, poorly conceived and poorly designed and poorly sponsored projects are likely to fail. Woopee – no great revelation or insight there then.
Mike Bourne and Andy Neely are looking at the wider set of measurement initiatives (Not strategy implementation projects) that try to solve performance measurement problems. They recognise that properly implemented Strategic balanced scorecard initiatives, as described by Norton and Kaplan, are clearly structured, demand top sponsorship, and are aimed at strategy implementation: not merely performance measurement.
So I would suggest that you stop anyone who is using tthis misleading statistic. Especially, as published by this individual (for their sake I won’t name them). It is quite misleading to sat that 70% of balanced scorecard projects fail. This is NOT applicable to strategic balanced scorecard projects in isolation (or even a, so called, Balanced Scorecard projects). It applies to a wider set performance measurement initiatives.
And we have not even touched on the more fundamental question: what problem are you trying to solve with this “initiative”, whether than be one called performance measurement, balanced scorecard or strategy execution. That is the question that informed which generation of “Balanced scorecard” you should consider and how you might address its implementation.
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