BSC The Heathrow Terminal 5 project illustrates how the balanced scorecard approach can be applied to a number of projects and organizations. In this case, the airport authorities wanted to derive a comprehensive vision for what the Terminal project should be, and they were able to execute on that for the most part. The system that they designed was heavy on evaluation metrics and this was critical to the overall success of the project.

The balanced scorecard is an approach that has a lot of intuitive wisdom. The approach suggests that if one satisfies the needs of different stakeholders, that it will enjoy success in the long run. The Terminal 5 project focused on this, because the project is essentially a not-for-profit venture, so success was dependent on meeting other aspects of the scorecard. It was easier for management to focus on the scorecard as a methodology because of this.

The case of Heathrow Terminal 5 does not provide much evidence as such that the scorecard is useful for all organizations. While I personally believe that the balanced scorecard is useful for just about any organization, the anecdotal evidence of one single organization is not what I would call scientific proof that the methodology is universally applicable. One organization just is not a statistically significant sample. However, the balanced scorecard is actually useful for most organizations because all of the different elements are important. For example, there is the question of the financial perspective in an organization that is not operating of a for-profit basis. In this case, that does not matter -- there are always financial motivations that can be taken into consideration. So Terminal 5 might have sought to keep the project on budget, but otherwise another company might have been more oriented towards the earning of profit.

One of the things that the BAA approach invoked was that it was different from the traditional approach. It was necessary to understand that every organization can and should implement the balanced scorecard differently. In this situation,...

It adopted a methodology that was heavy on the metrics, something that is not always the case with the balanced scorecard.
What is most interesting about the approach that Heathrow took was that it focused heavily on metrics for the fundamental elements of the balanced scorecard but that it also looked to tie the organization's success and its metrics into broader ideals. As such, it developed the four-tiered approach as an overarching strategic approach to the issue of the balanced scorecard.

There are so many different organizations in the world, and that is what lends value to the Heathrow Terminal 5 experience, that the organization was able to take the underlying principles of the balanced scorecard and adapt them to that milieu. The organization still wants to excel -- the entire world is going to be passing through that terminal so excellence is pre-assumed -- but the scorecard is built with flexibility in mind. Part of the flexibility comes from the fact that there are a number of ways that the company to adjust the scorecard. One of these is that the company can focus the scorecard on metrics of its choosing. This is important because what is important for one company is not necessarily going to be important for another.

One thing that the Heathrow experience highlighted was the importance of the customer focus, especially when the business is dealing with as many customers as this project. If the customers are not getting much out of the experience, then the company is not going to experience the other positive results. But for each company, the different elements work together differently. For example, customer is the most important at Heathrow. In many organizations the employees and learning and growth are actually important but that is not really the case with Heathrow. It has some importance, but it not essential to the project. The customer experience is certainly not dependent on the employees, but rather the systems and whether everything works as well as it can, and whether the…