The History of the Balanced Scorecard

By Victor Hoang · Updated Oct 24, 2026

The complaint is older than the scorecard. Kaplan and Norton's 1992 article said traditional financial measures can give misleading signals. Those measures include return on investment and earnings per share. The measure they criticized was itself a famous invention. DuPont had made it its main yardstick in the 1910s.

The balanced scorecard was first built in 1987 at Analog Devices, a mid-sized chip maker. Quality manager Art Schneiderman built it. It reached the world through Robert Kaplan and David Norton's January-February 1992 article in Harvard Business Review. The throughline is a fix for one complaint. Companies steered by financial results alone, and financial results arrive after the damage is done.

This page follows the scorecard from the first ledgers to the strategy maps and the OKR debate of today. For the framework itself, start with our guide to the balanced scorecard; this article tells where it came from. The goal-setting line it ran beside is told in the history of OKRs and the history of management by objectives.

Timeline at a Glance

The Ledger and the Ratio (1494-1919)

Business gets a way to count, and a way to over-trust the count

Picture Venice in 1494, where the mathematician Luca Pacioli was supervising the printing of his Summa de Arithmetica. According to the ICAEW library, it carried the first published account of double-entry bookkeeping, written in Italian rather than Latin. Pacioli was not the inventor. He wrote that the treatise would follow "the system used in Venice," and the same ICAEW page notes that the earliest surviving Venetian ledger records date from 1407.

Five centuries later, the same habit of counting reached the corporation. Donaldson Brown joined DuPont in 1908 as a sales representative. Hagley Library's account says that in 1914, as assistant treasurer, he developed a formula that combined earnings, working capital and investments in plant and property into a single measure he called return on investment. DuPont made it the primary performance measure for its operating departments. In 1919 the company opened a room for large charts, and Hagley says the chart room tracked sales, expenses, earnings, assets and ROI for each business, for the current year and the previous ten. Executives used it until the early 1970s.

Keep the precursor apart from the concept. The ledger and the ROI chart were financial instruments, and they measured the past. Nobody put customer delivery or employee skills on the same wall. The scorecard's argument was that a manager who watches only this wall is steering by the rear-view mirror, and the 1992 article aimed that argument at the very ratio DuPont had made famous.

What this means for teams today: If your weekly review is a revenue slide, you are running the 1919 chart room. It still works for what it measures. It just cannot warn you early.

The Analog Years (1986-1990)

A quality manager puts two sets of numbers on one page

The scorecard's birthplace was a semiconductor company. Arthur Schneiderman, who was Analog Devices' process owner for non-financial performance measurement and the balanced scorecard from 1986 to 1992, describes it on his own site as the offspring of Analog's five-year strategic planning process and its total quality management work. Work on the plan began with an assessment of the drivers of success, and an October 1986 presentation started translating the company's objective into action. His first version was, in his word, unbalanced. In August 1987, he writes, the first balanced scorecard emerged.

How did it get balanced? His account is human. Schneiderman wanted quality metrics reviewed first at the operating council, as Motorola's CEO Bob Galvin did. The COO kept moving the financials to the front. After several meetings the COO told him to satisfy both of them, and a candy commercial gave Schneiderman the idea of putting the two on one page, in his words "You got peanut butter on my chocolate." He added a few key financials at the top, and the team adopted a rule limiting financial to non-financial measures to a 1:6 ratio, because finance carried so much historical weight.

The first operational scorecard, for fiscal 1988, tracked on-time delivery and new product bookings for customers, cycle time and yield for internal process, and labor turnover as a proxy for employee satisfaction. Cost and productivity were placeholders with no goals yet. In 1990 the team replaced weak new-product measures after a revenue model showed they predicted future performance poorly. Analog even had a forerunner of the strategy map: a 1986 slide, adapted from a Texas Instruments story, that was revised through April 1990 into a one-page picture of external and internal levers.

Other roots ran in the same soil. In a 2001 article, Schneiderman noted that Hoyo Seiki, a Japanese auto-parts maker that won the Deming Application Prize in 1985, used hoshin kanri, which he called a precursor of the balanced scorecard. The wider quality movement is covered in the history of total quality management and the history of Six Sigma. French managers had a dashboard of their own, the tableau de bord, and a 1998 article by Marc Epstein and Jean-François Manzoni in European Management Journal is titled "Implementing corporate strategy: From Tableaux de Bord to balanced scorecards".

What this means for teams today: The first scorecard was a compromise between a quality manager and a COO who wanted finance first. Put both on one page, keep the list short, and expect the arguments to improve the page.

The Nolan Norton Study (1989-1992)

An academic meets a scorecard and a consultant gives it a name

The handoff to Harvard is the best-documented turn in the story, though the accounts differ. Schneiderman writes that Analog's Manufacturing Council read Relevance Lost by H. Thomas Johnson and Robert Kaplan, and invited Kaplan to give a seminar on activity-based costing. On 28 February 1989 he met Kaplan at Harvard Business School to review Analog's quality work and corporate scorecard. By his account Kaplan was more interested in a different Analog tool, the half-life method, and asked to write a Harvard case on it. A site visit followed on 13 July 1989, and the first version of the case, Analog Devices: The Half-Life Method, was published on 16 March 1990.

Meanwhile, from late 1989 into 1990, Nolan, Norton & Co. formed a performance-measurement research group of about a dozen companies that met every two months, with Kaplan as a consultant. Kaplan presented Analog's case at the first meeting, and Schneiderman says participants were captivated and tested the scorecard in their own organizations. On 19 July 1990, Kaplan and Schneiderman gave joint presentations to the group, and a Nolan Norton executive summary followed in 1991. Publishers Weekly's 1996 review of the authors' book says the concept came out of a 1990 study group of 12 companies.

Then came the paper. The January-February 1992 article in Harvard Business Review by Kaplan and Norton argued that a measurement system strongly influences how managers and employees behave, and that traditional financial measures suited the industrial era but no longer matched the skills companies were trying to build. Credit is where the sources disagree. Schneiderman says the article described an unnamed "NYSE electronics company" that was Analog, though it did not describe Analog's scorecard work, and that Kaplan's later writings say he learned of it mainly during the case research. Schneiderman argues that the four perspectives themselves emerged from the 1990 group's work.

What this means for teams today: A good idea often moves between people before it moves between companies. If someone on your team has a working scorecard, find the person who can write it up.

The Management System (1993-2000)

The scorecard grows from a dashboard into a way to run a company

The 1992 article described measures. The follow-ups described management. In September-October 1993, Kaplan and Norton argued in "Putting the Balanced Scorecard to Work" that managers seldom treat measurement as a core part of strategy, and that companies adopting new strategies often keep using long-standing financial metrics, which leaves the new goals unmeasured. In 1996 Harvard Business School Press published their book The Balanced Scorecard, a 322-page treatment that, according to Publishers Weekly, described the concept as "a multidimensional approach to measuring corporate performance" and drew on work with firms such as FMC, Mobil and CIGNA.

Mobil's North America Marketing and Refining division became the showcase. According to Harvard's Working Knowledge, Bob McCool became its head in 1992, the scorecard project launched in 1994, and 1995 was the first year of operation with it. The authors reported results for 1994 to 1998 that included about a 20 percent cut in the cost of refining, marketing and delivering a gallon of gasoline, annual yield losses down 70 percent, and employees who understood the strategy rising from 20 percent in 1994 to over 80 percent by 1998. These are the authors' own case figures, drawn from one company.

Look at what changed. In Analog's version the scorecard was a page for a meeting. In Mobil's it was a communication system: a January conference of the top 125 managers, and a division where, as Brian Baker put it, changing one scorecard measure affected about 7,000 people's awareness and compensation. The new problem was obvious from the start. A scorecard with four boxes can hold far more measures than anyone can track.

What this means for teams today: Once a scorecard is tied to bonuses and to every employee's goals, its design matters far more than it did on one page. Decide who is accountable for each measure before you publish it.

Strategy Maps and the Spread (2000-2010s)

Picture the cause and effect, then take it to government

By 2000 the authors were fixing the weakness. Their September-October 2000 HBR piece, "Having Trouble with Your Strategy? Then Map It", opened with the image of a general who needs detailed maps to explain a campaign to officers and soldiers. A strategy map links objectives across the four perspectives by cause and effect, as our guide to the strategy map explains. Their 2001 book The Strategy-Focused Organization grew from ten years of research including more than 20 case studies, and Strategy Maps, a Harvard Business School Press title, followed in 2004.

The scorecard also became a prize and a profession. By Palladium Group's account of its 2014 ceremony, the fifteenth annual Hall of Fame awards brought the total to 194 organizations from nearly 40 countries, including corporations, government entities and non-profits. Palladium was founded by Kaplan and Norton themselves, so treat that list as the creators' own record.

Governments were quick to borrow it. A May 2000 news report said 15 federal agencies had a year or more of balanced-scorecard-like experience, though not all used the 1992 Harvard scorecard. The Veterans Benefits Administration, for example, tracked five measures: customer satisfaction, speed, accuracy, cost, and employee satisfaction and development. By 2004 the GAO described the scorecard as a private-sector concept introduced by Kaplan and Norton in 1992, and reported that from fiscal year 2003 the Defense Department gave its defense agencies the option to use one. Of the 10 agencies the Pentagon required to have a plan or a scorecard, five used performance plans and the rest chose scorecards.

For the older ancestors of this performance thinking, see the history of performance management and the history of strategic planning.

What this means for teams today: Draw the cause-and-effect chain before you choose the measures. If you cannot say how learning leads to process, process to customer, and customer to finance, you have a list, not a scorecard.

The Overload and the OKR Age (2001-present)

Critics say too many boxes, and shorter goals take the stage

This era overlaps the last one, because the critique started early. The loudest came from the scorecard's own birthplace. In 2001, Schneiderman wrote in strategy+business that the tool had become overloaded, that surveyed scorecards averaged about 10 measures with some at twice that, and that trying to apply a scorecard in a perfectly balanced way "undermines its purpose". His examples of success used very few measures: Analog used two plus key financials, and Hoyo Seiki used three.

The next generation of goal setting moved the other way. OKRs, popularized by John Doerr, run on a quarter or shorter. John Doerr's own organization, What Matters, contrasts the two this way: the scorecard is top-down and more annual, with 10 to 15 objectives; OKRs are reviewed often and kept separate from pay. It also says the two can work together, with a strategy map helping senior leaders write their OKRs. That is one side's view, so weigh it accordingly. Our pieces on OKR versus KPI and the KPI glossary entry cover the measures themselves, and the management theory timeline shows where both sit in the wider story.

What survived is the original idea. Kaplan and Norton's own summary of it is that the scorecard keeps the financial perspective and adds customers, internal processes, and learning and growth, a line that appears in the 2007 reprint of their 1996 HBR article. Modern dashboards, strategy reviews and company scoreboards all descend from that one-page compromise at a chip maker.

What this means for teams today: Use the scorecard for the slow, balanced view of the business and a shorter cycle for the push. Cut the list until a manager can hold it in their head.

Key People

Key Facts

Key Facts: Balanced Scorecard History

• Schneiderman's own account says the first balanced scorecard emerged in August 1987 at Analog Devices.
• Kaplan and Norton's article appeared in the January-February 1992 issue of HBR.
• The Nolan Norton research group that tested the scorecard had about a dozen companies and met bimonthly.
• Mobil's scorecard project launched in 1994, and its first year of operation with one was 1995.
• By Schneiderman's account, Analog's rule limited financial to non-financial measures to a 1:6 ratio.
• In 2004 the GAO reported that the Defense Department gave agencies the option to use a scorecard beginning in fiscal year 2003.

The Pattern Behind the History

We call this the Count, Balance, Map, Trim pattern. It is our reading of the timeline, not a research result.

1. Count. Every era began with a number people trusted: Pacioli's ledger, Brown's ROI, a financial chart room.
2. Balance. Analog and the Nolan Norton group added what finance cannot see: customers, processes and people.
3. Map. Kaplan and Norton drew the cause-and-effect chain so the measures told a story, not a list.
4. Spread. Books, prizes and government guidance carried the scorecard to new sectors.
5. Trim. Schneiderman's 2001 warning and the rise of OKRs pushed the other way, toward fewer and faster measures.

What It Teaches Teams Today

• Put non-financial measures on the same page as finance, as Analog did, or the page will be argued away.
• Keep the list short. Schneiderman's examples used two or three measures beside the key financials.
• Draw the cause-and-effect chain before you pick numbers, the lesson of the strategy map.
• Be careful tying every measure to pay. Mobil's measures touched thousands of people's pay and awareness, and design mistakes travel fast.
• Pair the slow scorecard with a fast goal cycle, and read the critics, including the scorecard's own first builder.

For the wider story, read the history of management.

The scorecard began as one quality manager's argument that a company should read more than its ledger. Every version since has been a way to keep that argument short enough to use.