Creating the Organization 367financial measures (such as “eyeballs” captured in Internet scenarios) risks running
out of money and willing investors.- Driver measures of future performance versus financial measures of past performance.
Drivers are critically important because they indicate that a company is building the
capabilities and acquiring the intangible assets it needs for future growth.
There are many good reasons to use the BSC approach. Frequently, entrepreneurs
become obsessed with financial performance, but that alone does not indicate how the
company is developing for the future. Financial performance is a lagging indicator that
measures the past; the entrepreneur should be focused on the future. It requires a bal-
ance of financial and other measures to give a complete picture of how the firm is doing.
In addition, the process of implementing the BSC makes people aware of the relation-
ships among the four dimensions. All three of the nonfinancial measures must be linked
to the financial ones. A good balanced scorecard clearly shows the cause-and-effect rela-
tionships in the measures chosen. However, the main lesson for entrepreneurs and their
TMTs is: What you measure is what you get!!!
The Customer Dimension
Customers’ concerns generally fall into four areas: time, quality, performance and serv-
ice, and cost. Customer dimension goals might include:- Time—reduced delivery time
- Quality—reduced defects or warranty claims
- Performance and service—increased value perception
- Cost—reduced price or costs (e.g., delivery)
More specific measures of customers’ goals might focus on: - Time: on-time delivery as defined by the customer
- Quality: percentage of sales from new and existing products
- Performance and service: market share, customer satisfaction rankings
- Cost: year-to-year cost reductions
FIGURE 9.2 Financial and Operational Measures
Financial
PerspectiveCustomer
PerspectiveInternal
Business
Perspective
Innovation and
Learning
PerspectiveÀÀÀÀÀ¿¿¿¿¿½½½½½½½½½½¿¿¿¿¿
ÀÀÀÀÀÀÀÀÀÀÀÀÀÀÀ½½½½½½½½½½