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The Value of Knowledge Management 353

Table 10.1
Sample BSC implementation

Objectives Metrics Targets Initiatives
Financial

Customer
Internal processes
Learning and growth

3. Communicate and link: measure as you go through the objectives and look at how
well the reward system is linked to these objectives: are employees trained, motivated,
and rewarded to use KM as part of their everyday work?
4. Do a reality check — be sure that you are being detailed enough that you can
measure something to assess how well these objectives are being met.
5. Incorporate learning and feedback into your metrics — do a formative and a sum-
mative evaluation.
Each dimension of the BSC can be further expanded to include objectives, metrics,
targets, and initiatives, as shown in table 10.1 . Objectives are the major goals to be
achieved (e.g., profi table growth). Metrics are the parameters that will be monitored
in order to measure progress toward these stated goals (e.g., growth in net margin).
Targets are the specifi c thresholds to be met for each metric (e.g., 2 percent or greater
growth in net margin). Finally, initiatives describe the actions, projects, programs, and
so on, to be put into place in order to be able to meet the stated goals.
The balanced scorecard method was originally intended to be a performance
improvement metric, but it quickly became apparent that it also serves as an effective
strategic management system. It is applicable to both nonprofi t and for profi t organi-
zations as well as to both private and public sector companies. The BSC offers a
number of signifi cant advantages including the translation of abstract goals into
action items that can be continuously monitored. It provides objective measures of
the current situation and also helps in initiating the changes required to move from
the current to the desired future state of the company. The major shortcoming is that
unlike benchmarking, this is a much more diffi cult technique to use. Each BSC must
be developed “ from scratch ” as it is customized to individual organizations. Some
templates and automated tools are available to help in the implementation of a BSC
from, for example, Six Sigma (available at http://www.isixsigma.com/me/balanced
_scorecard/) and QPR (available at http://www.qpr.com/balancedscorecard/).