4th Generation Balanced Scorecards

The balanced score card is a technique designed by Kaplan & Norton in the early nineties for managing the firms performance across four perspectives;

 

 

Balanced scorecards have been through several generational changes over the years chronicled in part by Olve (1999), Shulver (2000) and in some depth by Cobbold and Lawrie (2002).  A short synopsis of the  history of the generational changes in scorecarding is provided below:

The original scorecards (Cobbold and Lawrie, 2002) morphed into the 2nd generation with the use of Strategy Mapping a technique designed by Kaplan Norton and made hugely popular by the IT industry. The third generation of scorecards incorporated the use of 'Destinations Statements' again from the IT industry. Destination Statements allowed scorecards to cascade down to the lowest reaches of management.

Standard 3G  Balanced Scorecards tend to be fairly sophisticated in their own right, depending on the type of organisation and the processes and measures needed. Many of them use overarching measures like Economic Value Added and a few other similar value added techniques

The 4th Generation Balanced Scorecards (4G Balanced Scorecards) has been designed by Allan Rodrigues of The Business Farm to take current scorecard techniques to the next level, linking scorecards to Value Advisory Services and the value of the company.

The 4th Generation Balanced Score card (4G Balanced Scorecard) takes scorecards a little further.

4G Balanced Scorecards are designed to firstly provide a 'Value Advisory Service', that link the performance outcomes of the scorecard (in the customer and finance perspectives), to the earnings valuation of the company.

4G scorecards accordingly measure the 'value gap' between the current value of the company, and the projected earnings value (or share price) of the company. They then identify the neccessary requirements at each perspective of the scorecard to achieve the company's projected value and destination.

Secondly, these scorecards measure the impact of the firms current strategies on the community and the environment (including climate change).

Allan Rodrigues of The Business Farm has designed a methodology called The Business Compass' to capture the processes measures and learning of the fourth generational scorecard.