22 Mar Balanced Scorecard
As usual, I’m trying to read a number of business books at the same time. The latest addition to my bedside reading pile is ‘Kaplan and Norton’s ‘Balanced Scorecard – Translating Strategy Into Action‘. I’ve been aware of the Balanced Scorecard for quite a few years and though some clients do use it their engagement seems fairly shallow – possibly it’s been forced on them by zealous senior executives. My interest stems from my current efforts to do some more joined-up thinking on the value of knowledge and intangibles in organisations. From what I’ve read so far it ties in quite well with both Karl-Erik Sveiby’s and Leif Edvinsson’s approaches to intellectual capital and I’m keen to draw some comparisons between the different approaches – Balanced Scorecard after all is much more prevalent that either Karl-Erik’s Intellectual Asset Monitor (IAM) or Leif Edvinsson’s IC Navigator.
Referring to the over reliance on financial measures in business Kaplan and Norton say:
"At its heart, an overemphasis on achieving and maintaining short-term financial results can cause companies to overinvest in short-term fixes and to underinvest in long term value creation, particularly in the intangible and intellectual assets that generate future growth."
And this of course is what intellectual capital is all about – exploring the realtive merits of investment in different intangibles in order to build long term value.
I will post an update once my research is complete but in the meantime Karl-Erik has already done a comparison between IAM and BS.
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