Balanced Scorecard Strategy For Dummies®

Chapter 18. Ten Biggest Scorecard Mistakes to Avoid

<feature><title>In This Chapter</title>

• Keeping your focus on what’s important

• Recognizing common pitfalls — and how to steer clear

</feature>

The use of Balanced Scorecards can enable a company to achieve a clear competitive advantage through integration and synergy in an overall, four-leg view of its business opportunities and challenges. However, several mistakes can be made along the way. Your job is to avoid these mistakes whenever possible, and our job is to point them out. In this chapter, you can explore ten of the most damaging mistakes that you can make with Balanced Scorecards, and how to avoid making them.

Cherry Picking

Implementing Balanced Scorecards is an all-or-nothing kind of thing for a company. One quick way to destroy any possibility for success is to apply the scorecards only in special cases or circumstances, outside the normal function of the company. When you reserve the use of scorecards only for special cases, you lose a lot of their benefit. We saw this in one company where the financial performance aspects of a company were tracked well, but little attention was paid to the internal processes. This resulted in focusing on reducing costs (a good thing for sure), but without process understanding with respect to these costs, which ultimately resulted in workforce reductions and cutting in travel and expenses. As this company happened to be in the entertainment business, where everything is customer focus, ...