1930s - Tableau de bord
The origins of the concept can be traced back to various sources. One of its precursors is “Tableau de Bord”, a management tool introduced in France in the 1930, and described as a “dashboard” used by managers to guide organizations to their destination (Bessire and Backer, 2005). The "Tableau de bord” has been quite popular in France ever since its introduction, and the majority of large companies are using it. However, due to the limited availability of translated literature it has a minimal overseas diffusion (Bontis et al, 1999).
Several French scholars argue that the Balanced Scorecard is, to a great extent, similar to the “Tableau de Bord” (TBD) measurement system devised by French engineers at the turn of the 20th century. (Mohsen Souissi, 2008). Though they are both grounded in the same philosophy emphasizing the relation between financial measures and non-financial measures, the Balanced Scorecard and the French TDB differs in many aspects. While the Balanced Scorecard emphasizes the link between the devised financial and non-financial measures with the strategic orientations of the organization, the TDB is more of an operational tool that aims to manage and control the production process.
1950s - General Electric and its new performance management system
In the early 1950’s General Electric (GE) developed a BSC-type system, designed to be used as a performance management system. (Hendricks, 2004). The projected team recommended 8 measures (one financial and seven non financial) to measure General Electric's decentralized division’s performance: Profitability, market share, productivity, product leadership, public responsibility, personnel development, employee attitudes, and balance between short-range and long range objectives. (Kaplan, 2010). Even though at that point the measures were not framed by the Balanced Scorecard perspectives, the four perspectives can be easily recognized through the metrics.
1954 - Peter Drucker and the concept of "management by objectives"
Round the same time, in 1954, Peter Drucker introduced the concept of “management by objectives” in his seminal work “The Practice of Management”. According with Drucker (1954), performance requires that each job should be directed toward the objectives of the whole organization. Thus, the first traces of the alignment between the objectives from strategic and individual level that is common for the implementation of the modern Balanced Scorecard can be tracked back in Drucker’s work.
1960s - Robert Anthony and his planning and control system based framework
In the mid 1960’s, Robert Anthony proposed a framework for planning and control systems based, identifying three such systems: strategic planning, management control and operational control. According with Kaplan (2010), the roots of management planning encompassing both financial and non financial measurement can be distinguished throughout his work.
1990s - Eccles and the Balanced Scorecard Revolution
In its initial form, the Balanced Scorecard was the result of a yearlong performance measurement research project run in 1990-1991 to determine what successful companies were measuring. The study was conducted by a consulting company headed by Dr. Nolan Norton. Additionally, Professor Robert Kaplan, from the Harvard Business School was co-opted in the research team to provide academic guidance. The timing of presenting and promoting the Balanced Scorecard couldn’t be better. In 1991, Eccles published the “Performance Measurement Manifesto” in Harvard Business Review. In this article, he predicts a performance measurement revolution will take place in the next five years, during which traditional financial information systems would be replaced by nonfinancial information systems. The Balanced Scorecard emerged as the catalyst of this revolution.
- Kaplan, R. (2010), Conceptual Foundation of the Balanced Scorecard, working paper, Harvard Business School, Harvard University.
- Eccles, R., G. (1991), The performance measurement manifesto, Harvard Business Review, January-February, 1991, pp. 131-137.
- Bessire, D. & Baker, R. (2005), The French Tableau de bord and the American Balanced Scorecard: a critical analysis, Critical Perspectives on Accounting, Vol. 16, Iss. 6, pp. 645-664.
- Bontis, N., Dragonetti, N., Jacobsen, K. & Roos, G. (1999), The knowledge toolbox: A review of the tools available to measure and manage intangible resources, European Management Journal, Vol. 17, Iss. 4, pp. 391-402.
- Hendricks, K. (2004), The Balanced Scorecard: To Adopt or not to adopt?, Ivey Business Journal (Electronic Version), available at: http://www.iveybusinessjournal.com/view_article.asp?intArticle_ID=527.
- Mohsen, S. (2008), A Comparative Analysis between the Balanced Scorecard and the French Tableau de Bord, International Business & Economics Research Journal.