Sustainability

Modernizing the Balanced Scorecard

We covered Kaplan and Norton’s (1996) Balanced Scorecard in my ISAT 654 (Advanced Technology Management) class at JMU a couple weeks ago. Appropriately, the students recognized that the research into balanced metrics and the strategy maps underlying the method is nearly 20 years old. Hasn’t the Balanced Scorecard been modernized since then, they asked, to reflect changing concerns in a changing world – especially social, political and environmental concerns? After all, sustainability and social responsibility are major concerns these days, and any scorecard that’s worth its salt should incorporate these considerations, they argued.

Here are a few “modernizations” I found that might be of interest:

 


References:

Möller, A. & Schaltegger, S., (2005). The Sustainability Balanced Scorecard as a Framework for Eco-Efficiency Analysis, Journal of Industrial Ecology, 9(4), 73-83.

Sidiropolous, M., Mouzakitis, Y., Adamides, E., & Goutsos, S. (2004). Applying Sustainable Indicators to Corporate Strategy: The Eco-Balanced Scorecard. Environmental Research, Engineering & Management, 1(27), 28-33.

2 replies »

  1. Nicole,

    I got involved with the BSC out of CSR/ Environmental management in the mid 90s. Two points which which get overlooked from both sides of the coin are:

    1. The original BSC book makes it clear that the four areas are not absolute or fixed. In fact there is an example where a chemical company included environment as a fifth strand. I also got very excited when I saw a more robust BSC used by a power company which (if you can picture it) placed internal business/process at its centre around which were – finance, customers, staff (learning etc) and last but not least environment (and stakeholders). I can draw it up for you if you’re interested in taking the discussion further.

    2. The terminology within ISO14001 (the standard for Env. Mgmt. Systems) includes the idea of objectives and targets to manage significant aspects. There was also the requirement for a management programme – ie who, when and how to achieve these. In the BSC outline, there is also the idea of Objectives and Targets, with additional Measures and Inititatives. Many organisations use the BSC as a reporting/ scorecard/ dashboard element, but are failing to recognise the underlying Initiatives part for driving improvement.

    If you recognise this then the BSC still has a unique and ‘balanced’ perspective today as a tool for corporate management, stakeholder management and for improving performance.
    Nice blog by the way – have bookmarked and will return.
    Cheers
    Robin (UK)

  2. Thanks for the excellent comment, Robin. It is extremely significant to point out that the original definition of the BSC was not fixed to the four areas! Perhaps if more people were aware of the flexibility, there would be more widely shared innovation regarding components that could be fit into the dashboard elements. Perhaps your post will help to encourage that!

    :),
    Nicole

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