Balanced scorecards should sometimes be imbalanced.
Over in the PMA Forum, Alan Meeks suggests the word balance is counterproductive, as it’s impractical to assign equal weight to each of the four perspectives. He argues for a ‘genuinely systemic scorecard’ – not nearly as catchy, is it?
As I replied, the original intent of the term balance was to remind people not to focus exclusively on financial objectives and metrics. As in, balance out your thinking. It’s hard to argue with this idea – motherhood and apple pie, as Alan might say.
The problem is most Balanced Scorecard practitioners have interpreted this idea to mean that all perspectives, all objectives, and all metrics should have equal weight. This is a literally interpretation of the word balance but I think it’s flawed thinking. Sometimes it may be better to have an imbalanced scorecard.
As an example, imagine an early stage company that already has seed funding and an early product but does not yet have their first customer. This company might want to emphasize the customer and employee objectives more than the financial and process ones. It’s not that financial matters aren’t critical and we don’t want repeatable processes. It’s just that – for the time being – we want more of the company’s collective energy on customers. This creates an imbalanced scorecard.
Of course, this is my recommendation on what to do in a specific situation. You may have different priorities. This difference in opinion reinforces my point. Create an imbalanced scorecard by weighting those things that are important to you.
While I’m railing on the word balance, I might as well also complain about the other word in balanced scorecard. The word scorecard has encouraged practitioners to think the most important part of a balanced scorecard deployment is metrics (or KPIs) — i.e. the things that keep score. Unfortunately, metrics by themselves are unlikely to improve the performance of an organization.
As long as you’re making your scorecard imbalanced, be sure to balance the time you spend on objectives and initiatives with the time you spend on metrics.