The US Army was one of the first users of the balanced scorecard – and still uses it today, all round the world.
The US Army was one of the first major organisations to put the balanced scorecard into practice – with a degree of success that placed the scorecard’s concepts at the heart of the US military’s strategic planning.
Not long after the balanced scorecard theory was introduced in the early 1990s, the US Army was using it to judge whether troops were sufficiently prepared to deploy in ‘hot spots’, or potential war zones.
Balanced scorecard gives an overall picture
For an organisation as large and complex as the US Army, which differs from most corporations because it isn’t in business to make money, the merits of the balanced scorecard seem perfect. The balanced scorecard – or BSC – looks at an organisation’s non-financial performance to give a picture of its strengths and weaknesses overall; not just on the balance sheet.
According to the Harvard Business School website, “The balanced scorecard enabled the US Army to become leaner, more nimble, and technically advanced to achieve its mission of serving the American people, protecting national interests, and fulfilling military responsibilities. Using an aggressive BSC rollout through automation and education, the US Army managed to transform its organisation of military personnel stationed around the globe.”
Success of the balanced scorecard
The US Army’s success in using a balanced scorecard was such that other American military organisations – including The Defense Finance and Accounting Service (DFAS) and The Defense Logistics Agency (DLA) as well as The Department of the Army – now put the balanced scorecard at the centre of their logistical planning.
One US military body’s website says that they have all “successfully implemented the balanced scorecard principles and methodology to drive results in their organisation.
“From the sample list of organisations stated, it is apparent that the balanced scorecard can be leveraged by government agencies, including defence, state and local government, service organisations and manufacturers.”
These organisations, it says, have employed the balanced scorecard to:
- Clarify strategies and communicate to the organisation
- Identify key internal processes that will drive strategic success
- Align investments in people, technology, and organisational capital for the greatest impact
The USACE and the balanced scorecard
The US Army Corp of Engineers (USACE), which has a presence from Belize to New Zealand, measures its performance across a basket of strategic measures – nine in total, arranged in four quadrants:
- Mission: is it supporting the goals of the wider US Army and the nation as a whole?
- Client/customer: is it working to improve its client, customer and stakeholder relationships?
- Business practices: how efficient are its processes, and are they improving?
- Capability and innovation: is it “translating innovations, expertise, and learning into knowledge and improved business practices for mission accomplishment?”
The variations on the standard balanced scorecard model are obvious (financial performance has been removed completely, for example) but also underline the flexibility of the concept – and how crucial it has been in supporting some of the largest, most complex organisations in the world.