LINCOLN, MA, October 30, 2008 — According to a recent study, companies that adopt a Balanced
Scorecard (BSC) outperform firms that do not adopt the BSC over a three year period. The results
reinforce the value of this proven performance management tool and confirm the experience of Palladium
Group, Inc., the global market leader in helping organizations execute their strategies, and standardskeeper
of the prestigious Palladium Balanced Scorecard Hall of Fame for Executing StrategyTM.
The research published in the journal Advances in Accounting i provides further evidence that the BSC is
an effective strategic management tool that leads to improved shareholder returns. Researchers used a
long-horizon event study methodology to examine the relationship between BSC adoption and
shareholder returns. Using a matched pair design with various matching criteria, they found the following
- BSC firms performed statistically better than control firms for matches based on market value of
equity, book-to-market ratios, and net assets
- Over the three-year post-adoption period, BSC adopters outperformed their industry counterparts<
who chose not to adopt the BSC by 27–30 percentage points
- There is also evidence that firms earn greater excess returns after adoption of the BSC than
For Palladium Group, the study’s results come as no surprise. A study from the company’s own research
found that 70 percent of organizations that use a formal process for managing strategy, such as the BSC,
outperform their peer group. In addition, for most of the past decade, Palladium Group has celebrated
the value of the BSC with its annual Balanced Scorecard Hall of Fame – recent winners of which include
Infosys, Lockheed Martin, Nemours, and PSE&G.
“The success we’ve had at Nemours is evidence of the effectiveness of the Balanced Scorecard. We
selected it as our preferred framework for execution and monitoring of our Strategy Management
System,” said Dr. David Bailey, CEO of Nemours, an integrated pediatric health system. “Strategic
communications is one area in which our effectiveness improved to a level that our bond agency
improved our rating, saving us millions. It also led to our induction into Palladium Group’s BSC Hall of
Palladium Group recognizes enterprises that use the Balanced Scorecard to become Strategy-Focused
Organizations and achieve breakthrough results. The 2008 North American winners will be inducted to
the Palladium Balanced Scorecard Hall of Fame for Executing Strategy on November 6th during
Palladium’s North American Summit.
“Dr. Kaplan and I appreciate the validation of our observations that organizations can achieve
performance breakthroughs within the first three years of implementing a BSC. We have seen it time and
again, and have recognized hundreds of these achievements through the BSC Hall of Fame,” said Dr.
David P. Norton, founder and director of Palladium Group. “The Balanced Scorecard continues to be at
the cornerstone of our work and serves as a key element of the Execution Premium management model.
We consider an execution premium the extraordinary value an organization can achieve by doing the right things right, including results such as an increase in share price, revenues, brand recognition,
customer loyalty, or employee commitment.”
Palladium Group collaborated closely with Drs. Kaplan and Norton in the development of the Execution
Premium model through its various education, conference, consulting, and research programs. The
company has leveraged this work into an Execution Premium Assessment (XPA), designed to help
companies understand the strategic performance gap between where they are and where they want to
be. XPA, part of an integrated suite from Palladium, is a two-week process consisting of executive
interviews, document reviews and a comprehensive survey that capture’s an organization’s view of its
performance and issues through the lens of execution premium best practices. Insights from the process
provide a shared framework integrating the diverse components of the management systems to help the
organization clarify strategy, drive performance, and optimize data.
About Palladium Group, Inc.
Palladium Group helps its clients link strategy and operations to achieve an execution premium.
Palladium’s expertise in strategy, finance, and IT—delivered through consulting, education, training, and
technology implementation services—helps more than 500 client organizations clarify strategy, drive
performance, and optimize data. Palladium has offices throughout North America, Europe, the Middle
East, Latin America, Africa, and the Asia-Pacific region. Palladium’s Balanced Scorecard Hall of Fame
for Executing Strategy™ recognizes organizations that have achieved an outstanding execution premium.
For more information visit www.thepalladiumgroup.com
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Blanc & Otus
Palladium Group Asia Pacific
Samantha Forbes Smith
Palladium Group Europe
Crabtree, A.D., & DeBusk, G.K., (2008). The effects of adopting the Balanced Scorecard on shareholder returns. i
Advances in Accounting, 24 (1), 8-15.