368 ENTREPRENEURSHIP
It is up to the entrepreneur and the TMT to define the customer dimension goals and
choose the measures for meeting them. Each goal is linked in some way to the financial
measures and the other goals.The Internal Business Dimension
This dimension answers the question “What must we excel at?” and is directly related to
the venture’s resources and capabilities. The internal business dimension can be repre-
sented as a three-part value chain:- Innovation process—developing new technology and implementing it. One specif-
ic example might be developing a new product and introducing it against the com-
petition. - Operations process—developing manufacturing and delivery excellence. Examples
of specific measures are reduced cycle time, reduced unit costs, and increased yield. - Post-sale service process—improving the service program. Examples of specific
measures are reduced warranty costs and increased customer retention rates.
The Innovation and Learning Dimension
This internal dimension focuses more specifically on the people in the organization. Its
goals can be divided into three subcomponents:- Employee capabilities. A goal here might be the continued improvement of the tech-
nological capabilities of the employees and managers. A specific measure might
concern the time it takes to develop the next generation of technological product
or service improvement. This goal clearly shows the need for investment in
employee training and development as well as the capital investment needed to sus-
tain testing and quality. - Information systems capabilities. A goal in this area might the development of an
expert system of the firm’s manufacturing or throughput processes. A specific
measure would be the time it takes to develop and test the expert system. - Motivation, empowerment, and alignment. Examples of goals in this area include in-
creasing employee focus on products and product information, or a reduction in
time to market of a new item. The first goal can be measured by the number of
products that represent 80 percent of revenue; the latter can be measured by set-
ting a benchmark for the firm’s time to market versus the competition’s.
Goals and measures are also directly linked to the other areas as well as to financial
performance. Balancing the needs of the organization requires attention to these people
issues because people and their behaviors are instrumental in achieving the other objec-
tives.
The Financial Performance Dimension
The financial objective of every venture is to provide superior returns to investors. There
are three primary ways to do this:- Through revenue growth and maximizing the mix of revenue streams. Some goals
that can be set to achieve this include: