One unique characteristic of the Balanced Scorecard concept is its evolving nature, as it witnessed a continual transformation process ever since its launch.
The earliest Balanced Scorecards comprised simple tables broken into four sections. Typically these "perspectives" were labeled "Financial", "Customer", "Internal Business Processes", and "Learning & Growth". Many authors have since suggested alternative headings for these perspectives, and also suggested using either additional or fewer perspectives. Additionally, the Balanced Scorecard was transformed throughout the last two decades from a performance measurement tool to a more comprehensive strategic performance management system.
One ways to look at the evolution of the Balanced Scorecard is by following the path of publications by Kaplan and Norton.
1992 - Performance measurement tool
Kaplan and Norton introduced the BSC to the wider public in 1992. The concept was presented at that time as a performance measurement tool, used to capture besides the financial measures, the value-creating activities from an organization’s intangible assets (Kaplan and Norton, 1992). A year later, in a new article, they made the first references about the connection between performance metrics and strategy (Kaplan and Norton, 1993).
1996 - Performance management system
By 1996, the BSC was labeled as a strategic performance management system, which formed the basis of a rallying framework for strategic processes, resource allocation, budgeting and planning, goal setting and employee learning (Kaplan and Norton, 1996a). Same year they published the first book on the topic, which included instructions on how the concept should be implemented (Kaplan and Norton, 1996b).
2000 - Strategic management and control system
The shift towards a more strategic use of the BSC was confirmed in a new article published in 2000 (Kaplan and Norton, 2000). The following year, their second book (Kaplan and Norton, 2001) shined more light on the move to use the Balanced Scorecard as an all encompassing strategic management and control system.
2004/5 – Strategy Maps and Office of Strategic Management
The transition from the management accounting school to the strategy management school is confirmed by the focus on two components of the BSC framework that support its strategic role: the Strategy Map and the Office of Strategic Management (Kaplan and Norton, 2004, 2005).
2008 – Integration between strategy and operations
A new phase in the evolution of the Balanced Scorecard concept is the emphasis on its integration role, aligning strategy with operations (Kaplan and Norton, 2008). The Balanced Scorecard is presented as a key organizational enabler of strategy execution, which in itself is presented as an organizational capability.
2010 – Closer link with risk management and leadership as organizational capabilities
As the Balanced Scorecard Forum 2011 illustrated, the emphasis is now on an even closer integration with other organizational systems and capabilities, such as Enterprise Risk Management.
Following the Balanced Scorecard evolution path as outlined in the work of Kaplan and Norton is only one way of looking and analysing the Balanced Scorecard evolution. From its inception as a performance measurement tool, the Balanced Scorecard suffered numerous changes and not all of them were the contribution of USA based authors. Highly regarded researchers, consultants and practitioners brought their contribution through expertise and knowledge for its continuous development and better use in the evolving organizations and society.
- Kaplan, R., S. & Norton, D., P. (1992), The Balanced Scorecard - Measures That Drive Performance, Harvard Business Review, Vol. 70, Iss. 1, pp. 71-79.
- Kaplan, R., S. & Norton, D., P. (1993), Putting the Balanced Scorecard to Work, Harvard Business Review, Vol. 71, Iss. 5, pp. 134-142.
- Kaplan, R., S. & Norton, D., P. (1996), The Balanced Scorecard: Translating Strategy into Action, Boston, Harvard Business School Press.
- Kaplan, R., S. & Norton, D., P. (2000), Having trouble with your strategy? Then map it, Harvard Business Review, Vol. 78, Iss. 5, pp. 167-176.
- Kaplan, R., S. & Norton, D., P. (2001), The Strategy-Focused Organization: How BalancedScorecard Companies Thrive in the New Business Environment, Boston, Harvard Business School Press.
- Kaplan, R., S. & Norton, D., P. (2004), Measuring the strategic readiness of intangible assets, Harvard Business Review, Vol. 82, Iss. 2, pp. 52-63.
- Kaplan, R., S. & Norton, D., P. (2004), Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Boston, Harvard Business Press.
- Kaplan, R., S. (2005), How the balanced scorecard complements the McKinsey 7-s model, Strategy and Leadership, Vol. 33, Iss. 3, pp. 41-46.
- Kaplan, R., S. & Norton, D., P. (2008), The Execution Premium: Linking Strategy to Operations for Competitive Advantage, Boston, Harvard Business Press.