Balanced scorecard

BALANCED SCORECARD STEP-BY-STEP

TE
Team-Fly®

AM FL Y

BALANCED SCORECARD STEP-BY-STEP
Maximizing Performance and Maintaining Results

Paul R. Niven

John Wiley & Sons, Inc.

Copyright © 2002 by John Wiley & Sons, Inc., New York. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means,electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate percopy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 750-4744. Requests tothe Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158-0012, (212) 850-6011, fax (212) 8606008, E-Mail: PERMREQ@WILEY.COM. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged inrendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. This title is also available in print as ISBN 0-471-07872-7. Some content that appears in the print version of this book may not be available in this electronic edition. For more information about Wiley products, visitour web site at www.Wiley.com

For my parents, Bev and Jean Niven

Foreword

Dave Norton and I initially proposed the Balanced Scorecard 10 years ago.1 Since that time, the concept has been adopted by all types of organizations— manufacturing and service, for-profit and not-for-profit, private and public—in virtually every developed and developing nation in the world. During these 10years, the Balanced Scorecard has evolved from its initial purpose of an improved performance measurement system to become the basis of a new management system, one that aligns and focuses the entire organization on implementing and improving its strategy. Norton and I documented this evolution and enhancement of the Balanced Scorecard concept through additional Harvard Business Review articles andtwo books.2 But because of the rapid changes that have occurred in the past ten years, few practitioners beyond our small circle of consultants and project leaders have gained much experience with implementations that are at the current state-of-the-art. Paul Niven, through his experience as project leader at the excellent and highly successful implementation at Nova Scotia Power, and subsequentlyas a Balanced Scorecard consultant, is one of the few who can talk and write knowledgeably about how to make the scorecard happen in an organization. Balanced Scorecard Step By Step guides readers through the processes required for a successful Balanced Scorecard project. In addition, he shows how to become a strategy-focused organization by imbedding the Balanced Scorecard into criticalorganizational processes. The book provides an excellent complement to the two KaplanNorton books by explicating the details and processes that project leaders can follow to implement the Balanced Scorecard measurement and management system in their organizations. We are pleased to welcome this new book to the Balanced Scorecard literature. Niven’s contribution will enable

1R.

S. Kaplan and D. P.Norton, “The Balanced Scorecard: Measures That Drive Performance,” Harvard Business Review, January–February 1992, 71–79.

and Norton, The Balanced Scorecard: Translating Strategy into Action (Boston: HBS Press, 1996); _________ The Strategy-Focused Organization (Boston: HBS Press, 2001).

2Kaplan

vii

viii

Foreword

many more organizations to achieve successful Balanced Scorecard...