The Balanced Scorecard has long been used as a strategic management framework used by companies across the world.
While it’s still a popular framework, the Balanced Scorecard has faced competition from other frameworks in recent years.
OKRs have been gaining usage and popularity as well. Usually, they may contain more initiatives for each objective, as well as more goals.
Using a science, the two share a lot of similarities. Both are focused on objectives—broad goals designed to propel the organization forward—and metrics (called Key Results in the OKRs field and measures in the BSC) that gauge your success in achieving the objective.
The biggest difference between the two is cadence. When creating Balanced Scorecards, most companies will draft objectives and measures that are designed to stay in place for at least one year, but often longer.
With OKRs, however, most organizations change their Objectives and Key Results each quarter, focusing on what can create the most value in the next 90 days.
Another key difference relates to parameters.
When constructing a Balanced Scorecard, organizations create objectives and measures in four distinct, yet related perspectives of performance: Financial, Customer, Internal Processes, and Learning & Growth.
OKRs on the other hand, do not rely on the use of perspectives.
Both tools are valuable in their own right, OKRs are more of an advantage having a shorter cadence.
Since things are changing faster than ever, and thus it’s vital we have metrics that allow us to be agile in our approach, OKRs thrive more into this setting.
Having said that, the four-perspective model of the Balanced Scorecard also provides substantial benefits: it forces an organization to think holistically about their business and how the objectives and measures spanning the four perspectives weave together to tell their unique strategic story.