What the Balanced Scorecard Really Delivers
Executive Summary
The Balanced Scorecard (BSC) is often seen as a strategic tool for large corporations, but its benefits extend well beyond that. In practice, it can help any organisation, including not-for-profits, governments and mid-sized enterprises, align operations with mission, measure what really matters, and improve long-term performance.
This article distils findings from a study of Malaysian organisations that have implemented the BSC. The evidence is clear: when adopted thoughtfully, the Balanced Scorecard supports better strategy execution, strengthens internal processes, and enhances decision-making across the board.
What is the Balanced Scorecard?
The Balanced Scorecard, developed by Kaplan and Norton in the 1990s, is more than just a reporting framework. It redefines performance measurement by expanding the focus beyond financial results. The BSC tracks performance across four key perspectives:
Financial – How do we appear to shareholders or funders?
Customer/Stakeholder – How do we deliver value to our clients?
Internal Processes – What must we excel at internally?
Learning and Growth – How do we support innovation and capacity-building?
Rather than measuring success only through revenue or cost metrics, the BSC encourages organisations to see performance as multi-dimensional and future-focused. NOTE: When working with faith-based organisations, Pluri suggests a fifth dimension: Spiritual.
What the Research Found
A 2008 study of Malaysian organisations using the BSC provides useful evidence on its practical benefits. The research found that:
BSC improves strategic alignment. Organisations reported better communication of vision and goals across departments and teams. Strategy became something lived, not just documented.
Performance improved across non-financial indicators. Customer satisfaction, internal efficiency, and staff learning showed measurable gains.
Long-term thinking increased. With a broader set of metrics, leaders shifted focus from short-term outputs to sustained improvement.
Importantly, organisations that fully embraced all four perspectives—not just financial and customer metrics—saw the most significant gains. Incomplete or overly financial implementations saw fewer benefits.
“The BSC encourages organisations to link strategy with operations. It translates the intangible into actionable outcomes.”
Lessons for Practice
While the study focused on Malaysian companies, the insights are broadly applicable, especially for NFPs and purpose-led organisations. Here’s what the research suggests for leaders:
Don't treat the BSC as a reporting tool—it’s a leadership framework. It works best when embedded into strategic planning and governance processes.
Internal alignment matters as much as external accountability. The BSC highlights internal systems, not just public outcomes.
Use it to tell a performance story. Funders, boards and staff want to understand impact. A well-designed BSC helps communicate value across multiple dimensions.
Start small and scale. The BSC can be customised to fit smaller organisations or single programs. It doesn’t have to be enterprise-wide from day one.
Common Pitfalls
The study also cautioned against misuse. Many organisations treat the Balanced Scorecard as a tick-box exercise or a way to impress stakeholders. But superficial implementation, where metrics aren’t aligned to strategy, can actually create confusion and inertia.
The key is intentionality. As the paper notes, “The BSC should not be reduced to a KPI scorecard. It is a tool for dialogue, alignment, and improvement.”
The Balanced Scorecard remains one of the most powerful tools for turning strategy into action. But its true power lies not in measurement, but in meaning. By balancing financial goals with people, processes and purpose, it provides a roadmap for high-performance organisations—whatever sector they work in.
Further Reading
Original study: “Balanced Scorecard Impacts on Improved Performance: A Study of Selected Malaysian Organisations” – Journal of Applied Management Accounting Research, Vol. 6, No. 2 (2008)
