EXECUTIVE SUMMARY A survey of IMA members in management positions indicates that 88% of regular users of the balanced scorecard believe it has led to improved operating performance. Conversely, a KPMG management consultant tags the overall failure rate at 70%. The survey also implies that it is valuable--albeit risky--to link performance targets to compensation.
The balanced scorecard (BSC) has been shown by our survey to be successful in many cases. Managers who want to implement this innovation should be cautious, however--it can be risky. Before getting into the hazards and how to guard against them, we will provide some background on the BSC.
Robert S. Kaplan and ...