Design of a Scorecard System II: Other Issues

This chapter provides guidelines in designing a scorecard system, based on analysis of the scorecard experiences of hundreds of organizations. A typical observation of managers who report achieving significant benefits from their scorecard system is that it has helped to better align operational improvements with the overall strategy of the organization. The SHAPs (i.e., SUNY, Hyperion, and Pepperdine scorecard) study determined that to better align operational improvements with the overall strategy, the scorecards and their measures should have ties to strategy. Although ties to strategy can be formal or informal, results from the study indicate that a majority of the organizations reporting significant benefits from their scorecard system have some formal tie to strategy, while nearly half of those that do not report significant benefits make no ties. A specific measure can be given a heavier weighting on the strategic objective's scorecard. One‐fifth of the organizations in the SHAPs study used the weighting method for establishing links to organizational strategy.