Transforming the balanced scorecard from performance measurement to strategic management: Part I

Several years ago the Balanced Scorecard (Kaplan and Norton 1992) was introduced. It began with the premise that an exclusive reliance on financial measures in a management system is insufficient. Financial measures are lag indicators that report on the outcomes from past actions. Exclusive reliance on financial indicators could promote behavior that sacrifices long-term value creation for short-term performance (Porter 1992; AICPA 1994). The Balanced Scorecard approach retains measures of financial performance - the lagging outcome indicators - but supplements these with measures on the drivers, the lead indicators, of future financial performance.