How it varies by context
In a single-owner, directly managed portfolio, this tends to show up as a quiet pattern over time: non-financial dimensions get raised in review meetings, generate discussion, and are rarely the deciding factor when a genuinely consequential call has to be made — asset retention, budget reallocation, management changes. Over several review cycles, the pattern becomes visible to anyone who compares what was discussed against what actually moved.
In a joint-venture or multi-stakeholder structure, the pattern is often sharper still, because financial measures are typically the ones every party already shares a common definition for, while the non-financial dimensions are more likely to be defined slightly differently by each side — making them both harder to compare and easier to set aside when a decision actually has to be made. A dimension that requires reconciling two parties’ different definitions before it can even be discussed is, practically, at a disadvantage against one that needs no reconciliation at all.
In organisations managing several units side by side, the same pattern often compounds through simple habit: once financial measures have become the default basis for comparison across units, extending that same comparison to a new unit is the path of least resistance, and the non-financial dimensions of the newer unit’s scorecard inherit the same reduced influence the established units’ equivalent measures already have.
What the evidence suggests
Marlys Lipe and Steven Salterio’s research, published in The Accounting Review in 2000, tested this pattern directly. Their experiment gave evaluators balanced scorecards containing both measures common across multiple business units and measures unique to a specific unit’s own strategy — precisely the mix a genuine balanced scorecard is meant to contain. The finding was stark: evaluators’ overall judgements were driven almost entirely by the common measures. The unique, unit-specific measures — the ones a balanced scorecard exists specifically to surface — had no significant effect on the final evaluation at all.
The mechanism the researchers point to is a general feature of how people process comparative information, not a flaw specific to any one scorecard design. Common measures are easier to weigh, because they can be compared directly across units or across time. Unique measures require more cognitive effort to integrate into an overall judgement, and under the kind of time pressure most real reviews happen under, that additional effort is the first thing to be skipped — not through carelessness, but because the easier path is, cognitively, the default one.
This has a direct implication for why a financial dimension so reliably dominates in practice. Financial measures are almost always the common measure — comparable across units, across time, across the whole organisation in a way that customer, process, or learning-and-growth measures, deliberately tailored to each unit’s specific context, usually are not. The scorecard’s own design, built to capture what’s unique about each unit, is precisely what makes those unique dimensions the ones most likely to be discounted when an actual decision gets made.
A follow-up study, examining how the scorecard’s information is organised rather than simply what it contains, found a specific, practical lever: when evaluators were asked to assess each dimension somewhat separately before forming an overall judgement — rather than reviewing all four dimensions together and moving straight to a single combined conclusion — the unique measures regained meaningful influence over the final evaluation. The bias wasn’t fixed by adding more non-financial measures, or by restating their importance in the document itself. It was reduced by changing the sequence in which the existing measures were actually processed.
Where this shows up
This perspective is written with real estate businesses in mind. It sits within the Asset and Production-Based grouping, and the questions it raises recur in other sectors too.
Questions worth considering
- When your organisation’s scorecard-informed decisions are made, could you trace, honestly, which specific dimension actually moved the outcome each time — or does the financial one consistently explain the result on its own?
- When a review is structured, does it ask for a combined judgement immediately, or does it require each dimension to be assessed on its own first?
Your team is facing similar challenges?
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