PUTTING THE BALANCED SCORECARD TO WORK

In their ground-breaking HBR article, ''The Balanced Scorecard-Measure s That Drive Performance'' (january-February 1992), Robert Kaplan and David Norton proposed a new measurement system that provided managers with a comprehensive framework to translate a company's strategic obje ctives into a coherent set of performance measures. Now the authors sh ow how several companies are putting the balanced scorecard to work. E ffective measurement, the authors point out, must be an integral part of the management process. The scorecard complements traditional finan cial indicators like return-on-investment and operating income with pe rformance measures for customers, internal processes, and innovation a nd improvement activities. Much more than a measurement exercise, the balanced scorecard is a management system that can motivate breakthrou gh improvements in such critical areas as product, process, customer, and market development. Several examples - Rockwater, Apple Computer, and Advanced Micro Devices-illustrate how the scorecard combines measu rement and management in different companies. Kaplan and Norton give m anagers who want to implement their own scorecard some sound, step-by- step advice. Readers are also given a first-hand account of the implem entation process in Kaplan's interview with Larry D. Brady, executive vice president of FMC Corporation. From the experiences of these compa nies and others, the authors have found that the balanced scorecard is most successful when it is used to drive the process of change.