The characteristics of a good Balanced Scorecard are as follows:

• Top-level ownership/sponsorship and a recognition that Balanced Scorecard is not just about measurement but also changing organisational behaviours

• ‘At a glance’ view of performance across the whole business

• Populated with a balanced and manageable set of business performance indicators derived from strategic goals which reflect what can be controlled or influenced and encourage the right behaviour

• A rolling forecast of performance over several forecasting periods

• An explicit understanding of the dynamic cause and effect relationships between business performance indicators (hence the relationship with Systems Thinking)

• A number of linked perspectives (but it doesn’t have to be 4 quadrants!)

• Cross references to business risks; and risks not duplicating what is already being measured through the performance indicators

• Performance reports for each business performance indicator, where root cause analysis is a mandatory requirement if there has been a deviation from plan

• Underpinned by a data dictionary describing for each performance indicator in the Balanced Scorecard: what is being measured, how and why; frequency of measurement; ownership/ accountability; data source and availability; baselines; targets; and unique numeric tolerances
• Robust and mandatory change control procedures to stop the proliferation and/or imbalance of performance indicators

If the Balanced Scorecard has been developed top down and in a structured manner - and is focussed on the most important things to your business - it should become the agenda for management team meetings.  But to make it work you also need to integrate it with other performance management tools and into your annual strategy development, planning and budgeting activities.

It is recommended that you start by using something like Excel to run your Balanced Scorecard. There are some very good software packages - however, they can be expensive and if you decide after a few months that Balanced Scorecard is not for you the decision to procure something 'off-the-shelf' could prove to be very costly.

Balanced Scorecards should be underpinned by an explicit Systems Thinking model showing the dynamic cause and effect relationships between your business performance indicators. In their book - “The Balanced Scorecard” - Robert S. Kaplan and David P. Norton say this:

"The emphasis on cause and effect in constructing a scorecard introduces dynamic systems thinking.  A properly constructed scorecard should be based on a series of cause and effect relationships derived from strategy, including estimates of the response times and magnitudes of the linkages among the scorecard measures." 

It is the view of consulting4results that Systems Thinking should be applied to all business performance indicators irrespective of whether you use Balanced Scorecard. This understanding will help the owners of the performance indicators to a) conduct structured root cause analysis and therefore solve problems and b) consider the impact of corrective action to fix business performance issues, thus minimising the risk of unintended consequences. 

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