Should you use the BSC and OKRs (Objectives and Key Results) together, or is it a choice between the two? Both OKRs and the BSC are frameworks for tracking organisational performance, but there are key differences:

1. Scope: The BSC covers multiple areas—financial performance, customer satisfaction, internal processes, and learning and growth. OKRs, on the other hand, focus on a smaller set of specific objectives and the key results needed to achieve them.
2. Level of Detail: The BSC includes more measures, providing a detailed view of performance. OKRs stick to fewer high-level goals and key results, offering a simpler view with less detail.
3. Flexibility: OKRs are flexible and can be easily adjusted to reflect changes in goals or environment. The BSC is more structured, which can make it harder to adapt quickly.
4. Alignment with Strategic Goals: Both frameworks align with organisational strategy, but the BSC might suit organisations with complex, multi-faceted strategic goals, while OKRs are often better for straightforward, focused goals.

The choice between these frameworks depends on the organisation’s needs and goals. Some may benefit from the BSC’s comprehensive approach, while others might prefer the simplicity and adaptability of OKRs.

Looking for an OKR framework, OKR template, or tracking tool? Head to this page for useful templates and tracking resources.

Tip: You can combine both approaches using an “OKR scorecard template.” Here’s an example of a modified KPI Tree (KPI-OKR Tree) that demonstrates this combined approach...

Absolutely! You can combine the BSC with OKRs for a more comprehensive approach to performance tracking. In fact, some organisations find that using both frameworks together enhances effectiveness.

Here’s how it works:

• Balanced Scorecard for Broad Tracking: Use the BSC to monitor performance across key areas like financial performance, customer satisfaction, internal processes, and learning and growth. This offers a high-level view, helping to identify broad areas needing improvement.

• OKRs for Targeted Focus: Once the BSC flags an area for improvement (e.g., customer satisfaction), OKRs can help set specific goals and measurable results for that focus area. This narrows efforts down to what’s most important and keeps track of detailed progress on specific goals.

Using both BSC and OKRs gives organisations a broad and detailed view of their performance. This combined approach can guide targeted improvements and help achieve strategic goals more effectively.

A strategy map is a visual tool for laying out an organisation's strategic plan. It is a diagram that shows the organisation's key goals and how they connect to each other. Typically, a strategy map uses boxes or bubbles to represent goals, linked by arrows or lines to illustrate the relationships between them.

This concept was introduced by Dr. Robert Kaplan and Dr. David Norton in their book, The Strategy-Focused Organization. They designed strategy maps to give organisations a clear snapshot of their strategic plan and to help stakeholders see how various goals relate to each other.

Strategy maps make it easy to understand an organisation’s priorities and guide efforts toward its main goals. They’re often used alongside the BSC to provide a visual representation of high-level goals and the KPIs used to track progress. KPI Trees are a specialised type of strategy map, designed to speed up the process of selecting the right KPIs.

In third-generation scorecards, the top level—or starting point—of the scorecard is set by long-term strategic outcomes. For added flexibility, you can introduce more strategic outcomes into the KPI Tree using a version called the KPI+OKR Tree.

The original, “first-generation” balanced scorecard system was based on four dimensions. While these worked well for some, they were limiting for others, like not-for-profits and highly specialised organisations. In third-generation scorecards, this structure is more adaptable, allowing organisations to begin from their unique, high-level strategic objectives instead of fixed categories.

Yes, the BSC is a management system designed to help organisations track performance and align actions with strategic goals. With 2nd or 3rd generation scorecards, you can cover any strategic objectives you need, providing flexibility to match your unique priorities. It provides a comprehensive view of performance across various areas, making it more than just a list of KPIs.

Not at all! Even first-generation scorecards included the customer perspective. Later versions are even more adaptable, allowing organisations to incorporate any relevant internal or external perspective.

Absolutely. Measurement is a core part of performance improvement (it’s the "M" in DMAIC). A balanced scorecard helps guide you to select the right KPIs. That being said, you may also identify additional low-level process metrics for specific problem-solving efforts outside of the scorecard design process, which can complement BSC metrics.

Yes. Check out our free Finance KPI Tree! It’s a great resource to get started on building out the financial perspective of your scorecard.

The frequency for setting a BSC depends on an organisation’s unique needs and goals. Some organisations might review it annually, while others may update it more often, such as quarterly or even monthly. Major events, like a strategic review or organisational changes, can also act as triggers for resetting or updating the scorecard. 

To determine the best review frequency, consider the following for each KPI:

• How quickly does this metric change?
• How crucial is it to detect changes in this metric?
• How long does it take to address issues or capitalise on opportunities once they’re identified?

You can find more guidance on how often to review KPIs here.

Yes, BSC is both a strategic management and planning tool. It helps organisations identify and track the metrics that matter most and ensures these metrics align with strategic goals. By giving a well-rounded view of performance, the scorecard highlights both areas of success and opportunities for improvement.

Often, organisations use the BSC alongside other strategic planning tools like SWOT analysis, PESTEL analysis, or scenario planning. These complementary tools help uncover key success drivers and guide strategy development to achieve long-term objectives.

While there are plenty of specialist tools for managing BSCs, most organisations can get great results using Excel or Google Sheets. These tools are powerful, customisable, and don’t come with a steep subscription cost. You can easily link your scorecard to your objectives, key results, or dashboards.

Check out our info on the best KPI Tree software. Just remember that ultimately, it’s the thinking process behind the scorecard that drives success—not the software itself.

For incentive plans to work, you need clear goals, targets (key results), and KPIs. The BSC provides the framework to set these metrics, serving as a foundation for the incentive scheme.

Then, you can introduce rewards (or penalties) based on hitting or missing these targets to create effective incentives. Read our Ultimate Incentive Design Guide for more help on this.