Balanced Scorecard (BSC): It is the time critical interrelation between its measures that really matters!

The time dimension - time delay, etc. - between the measures of a BSC have been discussed as one of the main unsolved limitations of a BSC. Steen Nielsen and Erland H. Nielsen from the department of Business Studies of Aarhus School of Business, Aarhus University, Aarhus, Denmark, have written an article about how to overcome these limitations by introducing System Dynamics Modeling for a Balanced Scorecard. This very interesting article can be downloaded by the following permanent link: https://dx.doi.org/10.1108/01409170810851276 . The paper seeks to construct a dynamic model/framework inspired by a case study based on an international company.

We see that there is a need for discussing the time quality of the interactions of measures in a BSC in more detail. One have to understand the quality of impulses from one measure to another:

• Does an impulse, emitted by one measure have a positive, negative or neutral effect on the target measure?
• We need to define the strength of an impulse and
• the duration of it
• What is the profile of an impulse? Does the impulse stay constant, increase or decrease over time?
• How much of the strength of an impuls is lost on its way between two measures?
• If impulses are accumulated in one measure that will influence a 3rd measure, we need to specify the impulse minimum which has to be reached to further transmit an incoming impulse.
• The impulse maximum must be defined, as well as
• the number of how many measures can be addressed by one impulse.
• Furthermore it must be specified how often an impulse is allowed to circuit within one time frame to address repeatingly the same measure.

In a increasingly complex world it is important to get cognitive assistance by intelligent systems to improve one′s thinking abilities. Humans, at least in our Western societies, are mainly trained and focussed on data collection and statistical evaluations in order to cope with complexities, but have huge problems in thinking  in terms of time-critical and variable impacts of all those data. Whenever there are big quantities of influencing factors, characterized by its own qualities and quantities in a time-dependent context, it is nearly impossible for a human to foresee what effects might take place over time. Beyond that, humans have huge problems in distinguish relevant effects from less relevant side effects often losing themselves in time consuming and senseless detail evaluations. 

As a consequence of these insights a system is needed that takes the time critical interrelations between the measures of a BSC into consideration. Existing models, based on mathematical relations, do not fully cover the time dimension and the systemic thinking.