Balance score card

A BALANCED SCORECARD APPROACH TO PROJECT MANAGEMENT LEADERSHIP
JAMES NORRIE, director, School of Information Technology Management, Ryerson University, Toronto, Canada; and Doctor of Project Management candidate, RMIT University, Melbourne Australia. DEREK H. T. WALKER, professor of Project Management and program director for Doctor of Project Management, RMIT University, Melbourne, Australia.ABSTRACT
In this paper, we discuss ways that project managers can use measurement (using a tool such as the balanced scorecard) to improve the operational performance of their project teams. Project managers will see that attaching measures to outcomes clarifies project objectives and supports well-defined and well-communicated links between the project vision and business strategy. These alsoenable project managers to more effectively monitor and control project activities for the purpose of improving project results. This paper reinforces the importance of strategy as an added dimension to the traditional triple constraint. We present this information through our comparison and survey of two projects undertaken by project teams at a large North American global telecommunicationsorganization. The results of our study provide early evidence of the usefulness of the balanced scorecard (BSC) as a tool for improving project management effectiveness. Our study also shows that balanced performance measurement is an important technique for establishing on-strategy project delivery. We propose using this technique primarily as an extension of current practices by adding a strategicmeasurement dimension. Keywords: balanced scorecard; leadership; project management practice; measurement theory; business performance management.
©2004 by the Project Management Institute Vol. 35, No. 4, 47-56, ISSN 8756-9728/03

Introduction There are numerous reports that document cases of projects, particularly information technology (IT) projects, delivered substantially beyond the due dateand well above the outlined budget. One such project is the United Kingdom’s (UK) notorious IT project Taurus. It was abandoned after it amassed UK£500 million in costs and produced few results. Project reviewers found a lack of project leadership and project definition as factors in causing Taurus’s failure (Drummond, 1998). Such failures are often publicly touted by the popular business pressin articles that frequently seem intent on vilifying the project management field. Such attention gives the public a lingering negative impression of our field’s strategic value. Project management researchers, however, as the current literature shows, widely recognize the important role organizational leaders play in envisioning a preferred future that encompasses both general strategy and changemanagement. For example, Briner, Hastings, and Geddes (1996) state, "The most significant success factors for project teams is that they have a common and shared idea of what difference they are trying to make as a result of the project" (p. 89). To develop a preferred project outcome through exploratory dialogue with various project stakeholders, organizational leaders must have a clear pictureof the strategy the company will implement to achieve the preferred outcome. The leadership’s purpose is to define and scope a project so that its reason-for-being is well understood by those who can influence the project’s successful execution. A leader’s vision helps the project team articulate the project’s objectives, goals, and products. As a solution to the dilemma of lacking a clear projectvision, Baccarini (1999) and Davis (1995) offer the Logical Framework Method (LFM) as a tool for defining project success. We agree with the solution offered by these researchers; but we argue that this method can be strengthened if organizations implement it within a strategic measurement framework. Doing so enhances the clarity of the objectives the team seeks to accomplish. And in doing so,...