Editing Balanced scorecard (section)

=== Third generation ===
{{Main|Third-generation balanced scorecard}}
In the late 1990s, the design approach had evolved yet again. One problem with the "second generation" design approach described above was that the plotting of causal links amongst twenty or so medium-term strategic goals was still a relatively abstract activity. In practice it ignored the fact that opportunities to intervene to influence strategic goals are (and need to be) anchored in current and real management activity. Secondly, the need to "roll forward" and test the impact of these goals necessitated the reference to an additional design instrument: a statement of what "strategic success", or the "strategic end-state", looked like (which in turn would be related to the organization's Mission or Vision Statement). This reference point was called a '''Destination Statement'''. It was quickly realized that if a Destination Statement was created at the beginning of the design process then it became easier to select the appropriate strategic activity and outcome objectives which if achieved would deliver it. Measures and targets could then be selected to track the achievement of these objectives. Design methods that incorporate a Destination Statement or equivalent (e.g. the [[results-based management]] method proposed by the UN in 2002) represent a tangibly different design approach to those that went before and so have been proposed as representing a "third generation" design method for balanced scorecards.<ref name=Lawrie_Cobbold_2004 />

Design methods for balanced scorecards continue to evolve and adapt to reflect the deficiencies in the currently used methods, and the particular needs of communities of interest (e.g. NGOs and government departments have found the third generation methods embedded in results-based management more useful than first or second generation design methods).<ref name=Lawrie_Kalff_Andersen_2005>{{cite journal|last=Lawrie|first=Gavin J. G.|author2=Kalff D. |author3=Andersen H. |title=Balanced Scorecard and Results-Based Management – Convergent Performance Management Systems|journal=Proceedings of 3rd Annual Conference on Performance Measurement and Management Control, the European Institute for Advanced Studies in Management (EIASM), Nice, France|year=2005|url=https://2gc.eu/resources/research/balanced-scorecard-and-results-based-management-convergent-performance-mana|access-date=11 July 2017}}</ref>

Third generation balanced scorecards improved the utility of second generation of balanced scorecards, giving more relevance and functionality to strategic objectives. The major difference is the incorporation of Destination Statements. Other key components are strategic objectives, strategic linkage model and perspectives, measures and initiatives.<ref name=Lawrie_Cobbold_2004 />