Applying the balanced scorecard for better performance of intellectual capital Sanjoy Bose Zayed University, Abu Dhabi, United Arab Emirates, and Keith Thomas Defence and Security Applications Research Centre, University of New South Wales, Campbell, Australia Abstract Purpose – One of the responses to criticisms of traditional forms of accounting reports for knowledge-based firms has been the development of the balanced scorecard (BSC), a strategic performance measurement framework and methodology based on a family of performance measures. This paper aims to examine the issue of measuring performance in relation to a major Australian company, The Fosters Brewing Group, where a newly appointed CEO reversed a decline in performance by adopting, among other initiatives, the balanced scorecard approach to management. Design/methodology/approach – The paper takes the form of a case study, applying the theoretical framework of the BSC to a declining business in order to achieve a turnaround. Findings – The paper discusses how a newly appointed CEO of The Fosters Brewing Group reversed a decline in performance by adopting, among other initiatives, the balanced scorecard approach to management. Research limitations/implications – The BSC is a practical framework to deal with the intangible nature of knowledge, while ensuring that such investments in knowledge and management align with and contribute to their strategic direction. Practical implications – The paper provides an example of a company using the BSC to deal with the imperative of making investments in knowledge and management skills. Originality/value – There is a growing body of literature on the limitations of traditional accounting statements that measure tangible, physical assets to capture the current and future value of knowledge. This paper illustrates a framework using the BSC to manage and measure the intangible nature of knowledge. Keywords Intellectual capital, Knowledge management, Company performance, Balanced scorecard, Performance measures Paper type Research paper Introduction With the rapid development of the global economy, intellectual capital (IC), which can represent the principal assets of many corporations, has become a critical driver for a business’s sustainability (Bontis, 2001). The emphasis on intellectual capital highlights an essential difference between companies operating in the “old” and the “new” economies, where the primary market value in the past was in physical assets, while value in the new economy is created and held primarily from the application of knowledge and the firm’s intellectual capital. Increasingly, the main assets of companies are held in these intangible forms rather than in physical capital. Innovations in processes and product development are a logical product of intellectual The current issue and full text archive of this journal is available at www.emeraldinsight.com/1469-1930.htm Performance of intellectual capital 653 Journal of Intellectual Capital Vol. 8 No. 4, 2007 pp. 653-665 q Emerald Group Publishing Limited 1469-1930 DOI 10.1108/14691930710830819