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Performance Drivers

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Performance Drivers

A Practical Guide to Using the Balanced Scorecard

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

If you wait for the market to tell you how you’re performing, it’s too late.

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

Performance Drivers provides a comprehensive explanation of the balanced scorecard system, which is designed to help companies measure and improve their performance. More importantly perhaps, the book also includes an honest assessment of the balanced scorecard’s shortcomings and weaknesses, along with suggestions on how you can improve the effectiveness of your own system and increase its chances of success. The writing tends to the dry, which might be a result of the translation from its original Swedish. Nevertheless, getAbstract.com strongly recommends this book to anyone interested in learning the intricacies of the balanced scorecard.

Summary

The Balanced Scorecard

The balanced scorecard concept first appeared in 1992, as the latest in a long line of approaches to develop non-financial measures of a company’s performance. Companies develop scorecards to improve strategic focus and control. The scorecard is a way for a company to agree on where it’s going and make sure it stays on track. The scorecard focuses on a few key ratios in important target areas and forces the company to control and monitor day-to-day operations as they affect development.

Management has traditionally focused on profitability as the key measure, but profitability is a measure of outcomes. It is important to measure operations and inputs as well. The balanced scorecard approach stresses that management’s mission is about more than money; it includes creating knowledge, building the trust of employees and customers and even deciding what future business to be in. Traditional management control, which focused solely on profitability, leads to short-term thinking, often provides misleading information, puts accounting ahead of strategy and pays little attention to the business environment. A good scorecard measures both outcomes and...

About the Authors

Nils-Göran Olve is an adjunct professor at Sweden’s Linköping University. He is author of Virtual Organizations and Beyond. Jan Roy is CEO and a senior partner of CEPRO management consultants and previously worked as CEO of several Swedish companies. Magnus Wetter is a management consultant specializing in strategic development and control issues. He has studied at Lund University and McGill University in Montreal.

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