ABB Industrie AG, Switzerland


The present article summarizes the process of Balanced Scorecard implementation for a strategic business unit of the ABB Industrie AG, Switzerland, outlined in a detailed case study by Ahn (2001). The case study emphasizes the experiences the ABB business unit gained during the Balanced Scorecard implementation process as well as pinpoints the most concerning limitations of this approach.


About ABB Industrie AG

By the time the study was conducted, back in 1999, ABB Industrie AG was already a world leader in power and automation technologies. The company employed over 1,500 people and was structured in 6 Strategic Business Units

  • Drives
  • Electrical Machines
  • Power Electronic Systems
  • Building Material Industries
  • Printing Facilities, and
  • Electronics Production


While all Strategic Business Units were scheduled to adopt the Balanced Scorecard approach the current case study follows the initial BSC pilot project, developed at the Printing Facilities business unit of ABB Industrie AG.


The Printing Facility business unit was chosen as a pilot project partly due to its simple organizational structure. By the time, the BSC project started, the unit was employing 150 people and was achieving about 9% of the company’s turnover.


Reasons for Balanced Scorecard implementation

The main reasons of the Balanced Scorecard adoption at ABB Industrie AG, as outlined by Ahn (2001), who was also actively involved in the project were:

  • “To allow a more strategy oriented action planning
  • Provide the management with a comprehensive information tool
  • Give all employees with a better understanding of the company strategy”


Balanced Scorecard Implementation process

According with the case study author, the responsibility of coordinating the introduction of the Balanced Scorecard into all of the six ABB Industrie AG’s strategic business units, and implicitly into the Printing Facilities divisions which makes the case of this study laid with the Quality, Process and IT Management department.


The department was responsible to assemble the BSC project teams for all Business Units and to initiate and manage the workshops designed for developing the specific Balanced Scorecard.


The team assembled to run the Printing Facilities Balanced Scorecard project included all departmental managers in order to secure a complete coverage off all managerial and business aspects of the division. During the project execution several workshops were planned in order to secure the development of all Balanced Scorecard critical elements. A specific workshop was scheduled to take place for defining each of the following aspects of the BSC:

  • Identifying the strategic direction and setting the strategic goals
  • Establishing the chain of cause and effect relationship between objectives  and assembling them in a Strategy Map
  • Selecting the relevant Key Performance Indicators
  • Setting milestones/targets for each specific measure identified in the previous phase
  • Developing corresponding initiatives in order to activate the Balanced Scorecard


The Strategy Map - ABB Industrie AG

Strategy Map - ABB Industrie AG -

Source: Ahn, 2001


Examples of measures and the linkage to their corresponding strategic objectives


Examples KPIs - ABB Industrie AG -

Source: adapted from Ahn, 2001


Problems in developing the Balanced Scorecard at ABB Industrie AG

Most of the problems that appeared during the Balanced Scorecard design phase were triggered by the insufficient recommendations received concerning the elaboration of the Balanced Scorecard concept.


Balanced Scorecard – Design Phase - Setbacks

  • Lack of decision making aids when generating and linking the strategic goals and measures
  • Over complexity caused by the derivation of too many cause and effect chains as can be depicted from the Strategy Map listed above
  • Inconsistencies in the linkage structure
  • Difficulties in defining the right measures for the business
  • Lack of predictability regarding lifecycle development made it difficult to derive reliable future oriented statements
  • Insufficient literature guidelines found for determining the values for setting milestones and targets for the measures
  • Unexpectedly large amount of time required in order to fulfill the BSC implementation – design phase – 4 months

Source: Ahn, 2001


Problems in using the Balanced Scorecard at ABB Industrie AG

The main issue that were encountered in using the Balanced Scorecard, mainly concerned  the recording and monitoring process of the 25 measures identified.


Balanced Scorecard – Usage – Setbacks

  • Great amount of time required for Performance measures data gathering process
  • Performance measures acceptance by the employees, while they were introduced gradually in the organization
  • Some of the measures were outside the scope of the Balanced Scorecard

Source: Ahn, 2001


Balanced Scorecard perceived benefits at ABB Industrie AG

The Balanced Scorecard Benefits span at ABB Industrie AG over three major processes: action planning and budgeting, unit control and strategy communication.


Balanced Scorecard - Benefits

Action planning and budgeting

  • Considerable benefit proved for connecting long term strategic planning with short term action and budget planning
  • Facilitated the budgetary resources allocation on the basis of the action plan

 BSC integration into the process of company control

  • Facilitated the supervision and active management of the employees
  • Beneficial in keeping the management informed of the current status of strategy implementation
  • Identifies any deviation from the company’s strategic direction on a continuous bases and facilitate the implementation of correction measures
  • Provides a solid platform for discussions between every employee and their superior

BSC for strategy communication

  • Facilitated the introduction of a communication program for creating awareness among all employees about the company’s strategic direction and strategic goals
  • Active involvement of all employees in the improvement of the performance management process

Source: Ahn, 2001



  • Ahn, H. (2001), Applying the Balanced Scorecard Concept: An experience report, Long Range Planning, Vol. 34, pp. 441-461.

BSC in practice : Case studies


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