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gari jenkins


There is an increasing level of interest and questions about the Balanced Scorecard and how it links with EFQM.

Through necessity, this paper assumes a basic knowledge of both models and therefore does not attempt to describe or explain the two approaches. It is a cause for some concern that some organisations, having introduced and used EFQM self-assessment for a few years, are dropping its use in favour of the Balanced Scorecard. This report will show that:

  • the two models are NOT mutually exclusive

  • they DO work together to bring added value to an organisation

The Scorecard is a means of articulating and communicating the Organisations' strategic objectives and monitoring progress against them. It is explicitly designed to communicate and manage strategic performance. It derives from the strategic analysis of where an organisation is heading (goals) and tells the story of how it is to be achieved. It aligns the organisation around the strategy and enables the management team - through regular and active management - to drive forward the implementation of the strategy. An organisation using the Scorecard will have a clear idea of its strategic objectives and the related targets, measures and initiatives.

The Excellence Model is a means of diagnosing strengths and weaknesses within individual business units and to enable benchmarking. It is a powerful diagnostic tool for driving continuous improvement and the adoption of best practice. The annual assessment process provides a holistic overview across the whole range of an organisations activities so that strengths and weaknesses are identified against generic best practice. The result of the assessment is an action plan incorporated into the annual business plan to deliver improvements over the next year. While an organisation will have a clear understanding at the process level, it may lack a sense of which of these are important at the strategic level and where to invest resources as a strategic priority. There is a danger of managers concentrating on the 'means' rather than the 'aims' or on simply raising the assessment score regardless of whether this contributes to the strategic objectives.

How British Telecoms are using Balanced Scorecards


BT's Vision is: To be the most successful world-wide communications group


This is what BT says, "Being 'most successful' means different things to our different stakeholders - creating growth in value for our shareholders, being the first-class communications group for our customers, creating a healthy, high performing environment for our people.  It is important that our policy and strategy focuses on the needs of all our stakeholders.


BT introduced the balanced scorecard approach to its strategy processes in 1995 to help it ensure all its needs were addressed.  All BT's business objectives are linked directly to an overall corporate scorecard and are structured in the same way.  Each objective is usually supported by its own set of projects/initiatives and there are clear links between strategy development and operational planning activities.


Target setting is based on the outputs of Business Excellence (EFQM) self-assessments, existing strategic plans and benchmarks.


Within the organisation lower-level scorecards have been established where this adds value.  Team and individual objectives, aligned to business unit objectives are then agreed to complete alignment of business objectives throughout the organisation.




  EFQM Excellence Model Balanced Scorecard






Monitoring Organisation performance


Managing the Org on a day-to-day basis


Involving people in






Communicating business priorities


Looking forward

(medium to long term) 


Identifying good



Identifying improvement opportunities





Framework for other initiatives


You will see from the above that the two models are, in fact complimentary.  Where one falls short the other excels.






Performance measurement, value creation

Total Quality management

Aspiration & benefits sought

Performance improvement


To translate an organisation's strategy into focused, operational and measurable terms


Enabling strategic performance

Performance improvement


To identify the strengths and areas for improvement across an organisation's processes to encourage best practice


Enabling best practice


A set of logically linked strategic objectives with lead and lag indicators/targets across the four perspectives


Set of initiatives aligned to strategic objectives and measures

A benchmark and relative assessment of the quality of an organisation's processes and results by assessing/scoring against the nine criteria of the Model


Areas of relative process strengths and weaknesses

Development approach

Strategy driven, workshop based, iterative, hypothesis driven, management team involvement, macro view, future looking


Set of objectives  and measurement are unique to every organisation


Step change in performance

Process driven, self-assessment, fact gathering, data collection, scoring based, detail oriented, present focused


Set of criteria and measurement areas are the same for all organisations


Continuous improvement

Success factors

Management team level sponsorship and commitment


On-going process embedded in governance processes

Management team level sponsorship and commitment


On-going process embedded in day to day management


Whilst the two approaches tackle the subject of performance improvement particularly through the use of measurement, and both rely on similar principles of management, the Models are borne out of different origins, take different routes and deliver different outcomes and benefits.


The fundamental difference is that the Balanced Scorecard is designed to communicate and assess strategic performance, whereas the Excellence model and its various applications, including the Self-Assessment process, focus on encouraging the adoption of good practice across all management activities of the organisation.


For example, as part of assessing good management practice, Self-Assessment, typically an annual process, seeks to establish HOW WELL an organisation defines and manages the process of strategic planning.  It does this by determining whether the organisation has formally established an appropriate process, which is reviewed regularly and is systematically deployed at different levels.  The Balanced Scorecard, on the other hand, TESTS THE VALIDITY of the strategy and monitors the organisation's performance against its delivery on a regular and frequent basis e.g. monthly.


The primary purpose of the Balance scorecard is not to assess the quality of the strategic planning process itself but to ensure that the strategy gets implemented and to enable an organisation to continuously learn from its performance and adapt its strategy accordingly.


Balanced Scorecard (an analogy)


A regularly quoted analogy of the balanced scorecard is when it is likened to the cockpit instruments of an aircraft.  The pilot cannot possibly keep track of everything that is happening in the aircraft i.e. every temperature, voltage, pressure, quantity, rate of flow etc.


So, the pilot is presented with and monitors the vital few measures which will indicate that the aircraft is flying at the: right speed, right height, in the right direction, with enough fuel.  If the aircraft has a crew then the Captain will be presented with the overall picture while the Engineer and the Navigator will be presented with information that is specific to their areas of responsibility.  If something goes wrong somewhere else then alarm bells ring and the pilot and crew will then start to look at other information.


Now, let us extend this analogy to the Excellence Model.  Self-Assessment is like scheduled maintenance.  It happens regularly, but not for every flight.  It is a check of the aircraft's systems (processes) which ensure that systems like the fuel, engines, hydraulics and navigation are all performing efficiently and well.  If a system is not working effectively there may be improvements (modifications) that can be made.  A programme of modification can be set in train.


No matter how well the pilot is able to fly the aircraft he/she can only fly it to the limits of the capabilities of the aircraft.


Fitting the two approaches together on the Strategy and Planning Spectrum

Some organisations try to create other models either inspired by a bit of the EFQM Excellence Model® and the Balanced Scorecard, or by overlaying the two Models together to create a third way.  Given the distinct benefits of each of the Models and the purpose for which they were designed, it is clear that amalgamating the two tends to confuse the end goal and dilutes the total benefits which can be gained from using the two as they were designed.  It runs the risk of creating an unnecessarily cumbersome process not quite fit for purpose.  There may be benefit in drawing parallels and similarities between the two Models (as shown in the illustration of the BT Balanced Scorecard) to speak a common language and establish a commonly understood context.  However, one needs to recognise where pulling the two Models together stops being insightful and where the differences are best addressed separately.


 Why work with both approaches together?


It is precisely within the differences of the two Models and their common performance improvement objectives that the benefit of bringing the two together lies.  There is fertile ground for development and learning in viewing the two approaches in tandem.

We will now try to illustrate how the Excellence Model can add a deeper dimension to the Balanced Scorecard, and conversely, how the Balanced Scorecard can provide focus and a clear plan of action to improve performance following a Self-Assessment.


From Excellence Model to Balanced Scorecard


An organisation, which is mature in using the EFQM Excellence Model®, will have a good and broad understanding of its strengths and areas for improvement at the process level.  As a result of Self-Assessment, an organisation will have an indication of: where it needs to improve, where it performs adequately and where it excels.  However, it may not have a strong sense of where to invest as a strategic priority, or where improvement will make the biggest impact.  The Balanced Scorecard can be used at this point to provide the strategic focus needed to prioritise action and allocate resources.


From Balanced Scorecard to Self-Assessment

Once an organisation has identified its strategic drivers of performance and associated measurement, targets and initiatives using the Balanced Scorecard approach, there is clear value in being able to appreciate the level of quality of the processes that may support the strategic objectives and measurement identified in the Balanced Scorecard.  Quality processes are clearly important to have to achieve strategic goals.  In leveraging the knowledge amassed from conducting Self-Assessment, we can gain a depth of understanding with respect to the challenges the organisation may face to deliver against its strategic objectives. 


As an example, the Self-Assessment could highlight particular areas of process weakness today, which if not redressed will make it difficult for an organisation to reach its vision.  This can be a valuable tool to inform the organisation on how to fill the performance gap between today and three to five years hence.




The two approaches can add a useful dimension to the other by leveraging the knowledge and insights that each of the Models brings to the organisation.  It is about enriching the management dialogue and process by providing additional resources of intelligence.  In using the two, a management team can foster a deeper dialogue about performance supported by an end to end analysis of the organisation's performance from strategy to operations and process quality.  Both Models clearly have their place in the strategy and business-planning spectrum.


Public Sector organisations must make their own decision as to which model (or models) serve them the best.  However, experience and research shows us that there is no reason why the Balanced Scorecard cannot be used effectively alongside the EFQM Excellence Model® and vice versa.  What is important is that organisations know why they are using these models and manage their development and implementation well.  Finally, in using any approach successfully, there needs to be real and sustained management commitment.  Without it, any approach risks becoming, at best, flavour of the month, and at worst, an expensive but short-lived and sub-optimal exercise.


Business Processes

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