The tyranny of the Balanced Scorecard in the innovation economy

The tyranny of the Balanced Scorecard in the innovation economy Purpose – To trace the rationale, features, development and application of the Balanced Scorecard (BSC) over the past ten years, to provide a critical review of its key problematic effects, and to suggest a future direction. Design/methodology/approach – The shift from the industrial to the innovation economy provides a background to identifying five major problem areas of the BSC which are then discussed with reference to selected case examples. An alternative systemic scorecard is then proposed. Findings – The tyranny of the BSC as a measurement “straightjacket” is beginning to jeopardize the survival of firms, hinders much‐needed business ecosystem innovation, thereby negatively affecting customer value rejuvenation, shareholders' benefits, other stakeholders as well as societal benefits in general. A more systemic alternative is proposed. Research limitations/implications – Future research might focus on further development of the systemic scorecard in different industries and organisational settings with detailed systemic measurement techniques. Practical implications – Rather than relying on the static BSC, it would be more effective to adopt a systemic perspective in measuring/managing intangible assets. Originality/value – An alternative to the BSC is proposed that involves radical change in its underlying assumptions by moving to a more systemic, dynamic framework – a systemic management system, including a systemic scorecard. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Intellectual Capital Emerald Publishing

The tyranny of the Balanced Scorecard in the innovation economy

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Publisher
Emerald Publishing
Copyright
Copyright © 2006 Emerald Group Publishing Limited. All rights reserved.
ISSN
1469-1930
DOI
10.1108/14691930610639769
Publisher site
See Article on Publisher Site

Abstract

Purpose – To trace the rationale, features, development and application of the Balanced Scorecard (BSC) over the past ten years, to provide a critical review of its key problematic effects, and to suggest a future direction. Design/methodology/approach – The shift from the industrial to the innovation economy provides a background to identifying five major problem areas of the BSC which are then discussed with reference to selected case examples. An alternative systemic scorecard is then proposed. Findings – The tyranny of the BSC as a measurement “straightjacket” is beginning to jeopardize the survival of firms, hinders much‐needed business ecosystem innovation, thereby negatively affecting customer value rejuvenation, shareholders' benefits, other stakeholders as well as societal benefits in general. A more systemic alternative is proposed. Research limitations/implications – Future research might focus on further development of the systemic scorecard in different industries and organisational settings with detailed systemic measurement techniques. Practical implications – Rather than relying on the static BSC, it would be more effective to adopt a systemic perspective in measuring/managing intangible assets. Originality/value – An alternative to the BSC is proposed that involves radical change in its underlying assumptions by moving to a more systemic, dynamic framework – a systemic management system, including a systemic scorecard.

Journal

Journal of Intellectual CapitalEmerald Publishing

Published: Jan 1, 2006

Keywords: Balanced scorecard; Innovation; Intellectual capital

References

  • The challenge today: changing the rules of the game
    Hamel, G.

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