Introduced by Robert Kaplan and David Norton in 1992, the balanced scorecard (BSC) has left an indelible mark on performance measurement. The BSC is a performance measurement framework that goes beyond financial metrics, taking into account the other aspects of a company’s value creation process.
Traditionally, managers would measure performance through the limited lens of financial returns, even in the wake of introducing new strategies that might not be measurable through mere financial metrics. The BSC, on the other hand, measures performance across four perspectives, each one answering a critical question: Customer (How do customers see us?), Internal (What must we excel at?), Learning and Growth (Can we continue to improve and create value?), and Financial (How do we look to shareholders?).
The BSC’s holistic and forward-thinking approach is making a notable impact on the tech industry due to its dynamic nature. The development and deployment of new technologies occur at such a rapid pace that traditional performance measurement frameworks can’t catch up. Since the BSC looks at performance from several perspectives, companies that use it are more aware of their current strengths and opportunities for improvement, making it easier for them to adapt to fluctuating circumstances and emerging trends.
Apple’s BSC Indicators
A prime example of a tech company that uses the BSC to its advantage is Apple. A prominent player in the tech industry, Apple wanted to shift focus strictly from financial performance (measured by gross margin, return on equity, and market share) to a more overarching, holistic approach. To accomplish this, the company established a small steering committee that had in-depth, firsthand experience with the deliberations and strategic thinking of the Apple Executive Management Team. This committee then developed a BSC that measured performance according to five indicators that aligned with the four perspectives of the BSC. This approach is outlined in an article written by Norton and Kaplan themselves, from which the following discussion is drawn.
For the customer perspective, Apple used customer satisfaction and market share. For internal processes, the company chose core competencies. For learning and growth, Apple emphasized employee attitudes—specifically, commitment and alignment. Lastly, under the financial perspective, the company focused on shareholder value.
Customer Satisfaction
Customer satisfaction sits among the top of Apple’s priorities, but that wasn’t always the case. Previously, the company had its eye almost exclusively on its technology and products. In the 1980s, Apple’s mission was “to make a contribution to the world by making tools for the mind that advance humankind.” The company’s values have since shifted from technology (i.e., tools) to a more seemingly altruistic, people-centric perspective. This was evident when Apple decided to develop its own customer surveys instead of working with third parties, recognizing the diversity of its customer base.
Market Share
Market share is another essential indicator, especially for a company in the tech industry. This is due to the fact that, by acquiring as much of the market as it can, Apple not only increases its profits but also attracts and retains more software developers.
Core Competencies
Under Apple’s BSC, the company’s employees are expected to possess core competencies, such as creating user-friendly interfaces, powerful software architectures, and effective distribution systems. However, many Apple leaders believe that measuring the impact that these have is a complex task. Over time, the tech company has experimented with quantitative measurements to see if enabling employees in this fashion can nurture their skill sets.
Employee Commitment and Alignment
Apple believes employee commitment and alignment are important. In line with this, they conduct a thorough employee survey for every organizational branch every two years. Random employee surveys are done more frequently. The questionnaires aim to determine how well each employee comprehends the company’s overall strategy and whether they are delivering results that contribute towards accomplishing that strategy.
Shareholder Value
Apple views shareholder value as a performance indicator, despite it being a performance result instead of a driver. Doing so enables the company to offset its former reliance on measuring performance via gross margin and sales growth, which did not take into account investments that would bear fruit in the future.
Did Apple make the right choice? It appears so, as the company’s use of the BSC has yielded several net positives throughout the years. It has dominated the market, consistently ranking among the top five smartphone vendors in the world since 2009. The company has also frequently ranked at the top of the American Customer Satisfaction Index, holding the number one spot for two years in a row (2021 and 2022). Moreover, Apple also holds a very high employee satisfaction rating on Glassdoor, with many of its employees praising its culture and values—indicative of the company’s strong employee commitment and alignment. Like many large companies, Apple has also faced its share of challenges. However, its ability to adapt is reflected in its progress, demonstrating the beneficial impact of the BSC.
Another major shift in the business landscape today that’s also reflected in Apple’s recent efforts is sustainability. The need to incorporate sustainability into the BSC can no longer be ignored. Beyond being a responsible choice, it is a strategic move to stay competitive, as today’s consumers increasingly favor brands that align with environmental values.
Although Apple has not publicly disclosed an updated version of its BSC that incorporates sustainability, its recent results—such as achieving carbon neutrality for corporate operations in 2020 and generating 20% lower carbon emissions in 2023 compared to 2022—are evidence of the company’s commitment to sustainable practices.
Harness the Power of the BSC
Whether you’re a consultant or the owner of a small, medium, or large organization, knowing the ins and outs of a BSC and how it can best be used to propel an organizational entity to a higher level of performance is paramount. As such, The KPI Institute offers the Certified Balanced Scorecard Management System Professional, along with resources like templates and webinars, for those looking to deepen their knowledge of the BSC, from design and implementation to managing key performance indicators (KPIs) within the framework and how its components work.
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Editor’s Note: This article was originally published on September 10, 2021. It has been updated as of May 2, 2025, with the help of Paolo Orduña, Senior Editor at The KPI Institute.
Benchmarking, commonly known as learning from best practices, is an effective organizational performance tool that can boost a company’s performance, by enabling a learning experience that relies upon understanding best-in-class practices and implementing them within one’s own organizational structure.
This assessment process is conducted for the sake of improving your firm’s performance to fill the performance gaps between you and your best-in-class competitors or even exceeding their performance level in the long run.
However, as effective as it may seem, benchmarking is a time-consuming and resource-intensive activity that requires a well-defined methodology, an action plan to identify best-in-class competitors, and an implementation strategy. Without these components, the positive effects of a benchmarking study on performance might be reduced.
The What, Why, and Who of Benchmarking
Benchmarking allows companies to focus on their strengths and weaknesses by comparing them to those of their main competitors within their respective industries or even other industries, enabling them to strengthen their position in the market.
When searching for competitors, the focus must be on understanding their best practices. This involves conducting a comparison of performance data, data that is obtained by analyzing our competitors’ similar processes and internal activities and identifying the practices that led to superior performance. Once identified, those practices must be adapted and implemented within the boundaries of your own organization.
Hence, when conducted correctly, the benefits associated with benchmarking can include:
Measuring and comparing your organizational processes against those of another competitor or industry
Discovering performance gaps
Incorporating leading firms’ processes into your own process flow to increase performance and reduce gaps
Future-oriented goal setting and improved resource prioritization
Accelerating continuous process improvements (CPI)
Identifying better opportunities for growth
Learning from industry standards
To show that benchmarking is more than just comparing numbers, let’s consider the following example: in the electric utility sector, an electricity distributor has an average interruption time for residential customers of 105 minutes. Is this value good, acceptable, or bad? It is not easy to find an appropriate answer unless the duration is compared to an objective standard, such as the industry standard of interruption time for electricity distributors in the area.
However, it also depends on the company’s strategy. An interruption time of 105 minutes may be considered a satisfactory value for the company, but someone else might see it as an alarming call for improvement.
The example above relies on the idea that performance represented through the usage of mere numbers can’t provide any meaning when analyzed without a reference—a benchmark, so to speak—as a comparison point.
When conducting a benchmarking analysis, no matter the industry of interest, there are usually three questions that must be answered before initiating the study:
What is to be benchmarked? (e.g. processes, strategies)
Against what or who will your organization be benchmarked? (e.g. KPIs, competitors)
What will benchmarking do to my organization? (e.g. improve performance, analyze performance)
In general, nowadays, performance measurement has become a standard practice for any organization that uses KPIs.
The next step that needs to be taken to improve performance is the implementation of a benchmarking study, wherein your company can compare its own performance with the sector’s point of reference (a benchmark) or simply assess the company’s compliance with respect to industry standards. Doing so helps you learn from others’ best practices and apply them within your own organization.
The Bottom Line
Is benchmarking worth a company’s investment and time? Simply put, yes. It is a potentially powerful tool to promote continuous performance improvement and performance comparison among industry players.
Nevertheless, you must remember that quite a lot of attention and time must be dedicated to defining the initiatives that must be taken and the methodology that will be used, otherwise, the results may be ambiguous.
Given the complexity of designing a benchmarking study and all the related challenges associated with it, The KPI Institute’s training program, Certified Benchmarking Professional, is designed to fill the gaps you might currently have or provide completely new knowledge about the various aspects of how to conduct a benchmarking study.
For more knowledge, feel free to download any of our webinars focused on benchmarking or take a look at our solutions, which span from audit services to framework optimization.
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Editor’s Note: This article has been updated as of March 21, 2025.
Transparency is a fundamental principle in the public sector, characterized by openness, communication, and responsiveness. It demands that public institutions disclose their activities and decisions to citizens, directly impacting their accountability and contributing to improved public administration performance.
In The KPI Institute’s Government Services Index (GSI) 2023 report—a comprehensive compilation of indicators designed to evaluate government service performance based on five key dimensions: Future Readiness, Digitalization, Governance, Society Welfare, and Citizen Experience—the transparency of governments worldwide was assessed within the Governance dimension. According to the findings, Australia holds the ninth position in the Governance dimension and placed sixth in Transparency. A key factor contributing to these rankings is the Commonwealth Performance Framework (CPF), which serves as a central component in the Australian government’s commitment to transparency and accountability.
The Framework for Transparency in Australia’s Public Sector
The CPF is a performance measurement system established by the Australian government to evaluate the government bodies subject to the Public Governance, Performance, and Accountability Act 2013. The framework (see Figure 1) offers a structured approach for planning, measuring, and reporting on the efficiency of public initiatives and operations.
Strategic Planning: Government bodies must formulate corporate plans, outlining their objectives, strategies, and anticipated outcomes. Additionally, the Portfolio Budget Statements aids in resource management, detailing the allocation of resources to government outcomes and programs.
Performance measures embedded within these plans must align with the entity’s purposes or critical activities. These measures should be reliable, verifiable, and unbiased when assessing the entity’s performance. They ideally encompass a mix of qualitative and quantitative indicators, including measures of outputs, efficiency, and effectiveness. Moreover, they should facilitate longitudinal assessments of performance over time.
For example, the Department of Foreign Affairs and Trade’s 2022–23 Corporate Plan provides an overview of the entity’s performance information. The department’s transparency is evident in its clear outline of priorities and objectives, providing a transparent view of planned actions. This transparency is strengthened by the inclusion of delivery targets and various data collection methods. Moreover, regular performance assessments, conducted internally and externally using diverse data sources, further enhance transparency by offering a reliable basis for evaluating the department’s progress.
Additionally, the Department of Foreign Affairs and Trade’s Portfolio Budget Statement 2022-23 reveals the budgeted expenses for the programs specified in the Corporate Plan. The transparent nature of these documents benefits various stakeholders. Senators and Members of Parliament gain insights into the proposed allocation of resources, while the public gains an understanding of the government’s focus. Businesses also receive clarity on trade and investment priorities, and partner countries find opportunities for collaboration. Furthermore, the commitment to incorporating indigenous perspectives into Australia’s international diplomacy is showcased, fostering inclusivity.
Performance Measurement: Measuring performance under the CPF involves developing performance information that allows stakeholders to assess how an entity’s activities support the achievement of its purposes. Performance measures, outlined in the planning documents and spanning at least four reporting periods, provide an extended base for evaluation.
Actual performance results are published annually in Annual Reports. These reports include Annual Performance Statements that assess and analyze the entity’s performance for the reporting period. They detail the entity’s achievement of its objectives against specified targets and provide an analysis of factors influencing performance. This analysis encompasses changes to the entity’s purposes, activities, organizational capabilities, and external environment.
To round out the example, here’s a snippet from the department’s Annual Performance Statement, highlighting the performance results for the fourth priority of Outcome 1 (see Figure 2), as outlined in the Corporate Plan.
Figure 2. Summary of performance results | Adapted from: Australian Government – Department of Foreign Affairs and Trade Annual Report 2022-23
Out of the seven priorities, Priority 4: Deliver an effective and responsive development program stands out as it is the only one that, by far, was able to achieve its goal. Through it, Australia’s development program that promotes health security, stability, and economic recovery became responsive. Moreover, it facilitated timely and effective government responses to humanitarian crises.
Transparent Reporting: Government bodies are required to report on actual results achieved against performance measures outlined in planning documents. These reports include audited financial statements, non-financial performance information, and other pertinent reporting details.
Subsequently, responsible ministers table these reports in parliament for thorough scrutiny and accountability. Following their tabling, these reports are made publicly accessible on the Transparency Portal, the central repository and data store of publicly available corporate planning and reporting information, enhancing transparency and accountability in government operations.
Australia’s success in transparency, as demonstrated through the CPF and reflected in the GSI 2023 rankings, positions the country as an exemplary model of best practice. It showcases Australia’s proactive stance in fostering public trust, informed decision-making, and continuous improvement.
Sustaining and strengthening transparency efforts will foster trust between governments and citizens, drive positive change, and achieve sustainable development goals. By upholding the principle of transparency, governments can build resilient, responsive, and accountable institutions that serve the needs of all citizens.
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Editor’s Note: This was originally published in Performance Magazine Issue No. 30, 2024 – Government Edition.
The success of a business mostly hinges on its organizational performance, which influences outcomes, efficiency, and effectiveness. This begs the question: What, therefore, drives performance to extraordinary heights? The answer often lies in the tools and techniques organizations use to stay adaptable and achieve their goals. Among these, one that stands out is benchmarking.
Benchmarking is recognized as a powerful instrument for fostering development and achieving a competitive edge. It enables organizations to learn from the most successful practices of their colleagues and industry leaders. By leveraging the insights of others, businesses canunlock opportunities for continuous growth and innovation, making benchmarking a cornerstone of sustainable success.
The History of Benchmarking
The origins of benchmarking can be traced back to the1800s, when textile mills started applying methodical comparisons to enhance their operations. Its evolution into a disciplined management tool began in the1980s, when Xerox, under great pressure from Japanese rivals and a decreasing market share, developed a benchmarking program to examine and implement best practices from top companies. This strategy enabled the business to recover its competitive edge, raise performance, and increase efficiency.
The success of Xerox attracted considerable attention to benchmarking as a sensible approach to organizational development. By the 1990s, companies worldwide had embraced it as a means of increasing customer happiness, streamlining product development processes, and raising productivity. It eliminated the need fortrial and error by providing a structured way to learn from others.
Although definitions vary throughout the literature, the fundamental goal of benchmarking is always consistent:learning from the best to drive continuous improvement. Benchmarking is a highlystructured process designed to enhance an organization’s performance by comparing it to the best practices of the market or other competitors.
The primary objective of benchmarking is to identify the most effective practices and subsequently implement them to benefit the organization. This process involves comparing performance data, examining similar activities across organizations, and extracting actionable insights. By identifying best-in-class practices and applying them, businesses can refine their operations, exceed competitors’ performance levels, and achieve long-term success.
Benchmarking not only serves as a roadmap for improvement but also provides valuable insights into whatdrives exceptional performance. This is the most powerful form of benchmarking, as it emphasizes action and is employed to acquire knowledge from the experiences of others. It emphasizes actionable strategies by analyzing specific processes or activities that deliver favorable results. This form of benchmarking fosters learning and enables organizations to adopt proven practices and tailor them to their unique structures and goals, ensuringsustainable growth and competitive differentiation.
The Types of Benchmarking
Different types of benchmarking are tailored to meet specific goals to address the unique needs and challenges of each organization. Selecting the right model is crucial to drive improvement and achieve meaningful growth.
Performance Benchmarkingentails the comparison of performance metrics to evaluate the performance of our organization in comparison to others.
Process Benchmarkinginvolves the comparison of methods and processes to identify opportunities to enhance the operations of our own company.
Strategic Benchmarkingis implemented when an organization is in the process of altering its strategic trajectory and desires to evaluate its strategy in comparison to that of its competitors.
Internal Benchmarking compares the performance of various departments or divisions within the same organization or company.
Competitive Benchmarkingcompares performance and results with the top competitors in the industry to identify areas for improvement.
Functional Benchmarking compares technologies or processes within one’s industry or technological area aimed at becoming a leader in that particular technology or process.
Generic Benchmarkinginvolves comparing processes with the best operators across industries, regardless of the sector, to identify best practices.
Benchmarking demands a commitment to change and should only be pursued by organizations that are open to transformation and focused on achieving improvement. By engaging in consistent and regular benchmarking, organizations can develop concrete, measurable short-term plans rooted in current realities rather than relying on past performance. When executed successfully, it leads to significant enhancements in quality, efficiency, and financial outcomes. Organizations that excel in benchmarking are constantly exploring fresh ideas, adopting the most effective innovations, and striving to meet and exceed the highest standards of performance.
Performance management is an overarching discipline focused on achieving desired performance results. To approach it effectively, organizations should develop the necessary tools and processes to track progress, identify areas for improvement, promote alignment and accountability among stakeholders, and support continuous learning.
The performance management process focuses on data collection and analysis, reporting, review, and recalibration. This process helps organizations identify performance gaps, support informed decision-making, and enhance performance results. Figure 1 illustrates the performance management process, highlighting its key stages and the flow of activities that drive ongoing improvement.
Organizations can utilize a range of tools to support the process. Each tool is structured to serve a specific purpose, with clearly defined features that support its functionality as follows.
Data Collection
Two tools can be used to ensure the accuracy of data collection: an automated reminder systemand a data collection template. The reminder system is a tool designed to send notifications at predetermined times. It helps data custodians stay on track with their reporting responsibilities, minimizing the risk of missed deadlines. These reminders can be delivered through various channels, such as emails, text messages, or app notifications.
Meanwhile, the data collection template helps custodians record information in a standardized format, minimizing errors. It should include sections for the key details of each KPI, including name, reporting frequency, responsible parties, targets, and results.
Moving along the process, the collected data must be processed to help organizations identify performance issues, understand root causes, and even predict future outcomes. Nowadays, there is a wide range of off-the-shelf performance reporting software available to streamline the analysis process. Once the analysis is complete, organizations can communicate the results using performance reports or performance dashboards.
Performance reports are comprehensive documents that provide a detailed presentation of the organization’s activities and results over a specific reporting period. The format of these reports can vary depending on their intended purpose. For example,annual reports are typically text-heavy, but many companies incorporate graphics and images to create visually engaging documents. Hays’ annual report is an example that demonstrates how the use of visuals can enhance performance reporting. By integrating charts and images, the report improves readability, allowing readers to quickly grasp complex information.
Dashboards offer a visual representation of performance data. Their interactive and visual nature allows for quick interpretation of KPIs results and trends. Many performance reporting software include features for creating dashboards, making it easier to monitor and respond to performance in real-time.
Performance Review
With the analysis prepared, performance is then reported and discussed at various organizational levels during performance review meetings. These meetings may take different forms, such as monthly reviews to address operational issues at the departmental level or annual meetings focused on long-term strategic matters among top management and the board. Regardless of the format, performance meetings are an important tool in the performance management process as they enable effective decision-making by leveraging the collective knowledge and experience of the team.
To ensure that all important aspects are addressed duringperformance review meetings, their focus should be clearly established through agendas. An agenda can be structured around key points such as presenting performance results, discussing high-priority issues (e.g. KPIs below performance thresholds), analyzing potential causes and correlations, and identifying and assigning corrective actions for low-performance areas.
Recalibration
The corrective actions identified during meetings can be tracked using a portfolio of initiatives. This is a collection of actions and projects aimed at closing performance gaps and achieving the desired state. This tool enables organizations to monitor the progress of each initiative, establish accountability, monitor resource allocation, and support the prioritization of initiatives.
A portfolio of initiatives typically includes: the objective it addresses, the required resources for implementation (financial, time, and human resources), progress status, and priority levels.
There is a broad range of tools available on the market to support performance management; and given their ease of access, it would be unwise for organizations not to take full advantage of them. By implementing solutions and customizing them to meet the organization’s specific needs, organizations can ensure that the outcomes of the performance management process are insightful and actionable. This approach fosters a data-driven decision-making culture, empowers stakeholders to take informed actions, and ultimately helps the organization achieve its strategic goals and drive sustainable growth.
