As the Balanced Scorecard concept matured from a largely academic concept in the early 1990s to become a powerful framework for enterprise strategic management, the emphasis changed from monitoring performance to enabling the successful execution of strategy. The breakthrough results experienced by organizations that have been successful with the Balanced Scorecard did not usually result from some new insights gained by top executives who now had a better set of gauges. Instead, the dramatic improvements in performance were generally the results of organizations that were transformed into “strategy focused organizations.” It was the enhanced understanding of the strategy by the masses of employees in an organization that gets a larger share of the credit. If you talk to the leaders of the organizations in the Balanced Scorecard Collaborative’s Hall of Fame, you will see the emphasis on “focus,” “alignment” and “operationalizing strategy,” not “balanced measurement.” David Norton and Dr. Robert Kaplan (the founders of the Balanced Scorecard concept) often characterize primary objectives of their methodology as “translating strategy into operational terms” and “making strategy everyone’s job.” Unfortunately, the metaphors of gauges and cockpits that many people automatically associate with the Balanced Scorecard hinder people’s appreciation for these critically important aspects of Norton and Kaplan’s approach.

I would like to suggest a revised cockpit metaphor where the primary value provided by the Balanced Scorecard is not the full set of gauges, but rather the steering wheel! Various studies often cited by proponents of the Balanced Scorecard methodology indicate that even when executive teams develop good strategies, they are only executed in 10% to 30% of the cases. In a Fortune article entitled “Why Executives Fail,” the key point was that Executives usually failed because they were not successful in executing their strategy, not because they had a bad strategy. If the Balanced Scorecard is viewed primarily as a tool for monitoring and improved understanding (gauges), then it is not being thought of as the tool for focusing and aligning the organization to execute strategy (the steering wheel). With the steering wheel metaphor, the flow of information is exactly the opposite as that with the gauges metaphor.

Figure 2 – The flow of Information with the “steering wheel” metaphor