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order that the quantifiable effects of quantified causes can be
readily appreciated. For example, ‘what actions will influence
our customer image?’ and ‘how will our customer image be
measured?’
� Second, there must be drivers of performance (training,
incentives and the like) demonstrably affecting operational
outcomes. For example, ‘what training is required to improve
our delivery to customers?’ and ‘how will we measure the
effectiveness of such training?’
� Third, there must be direct linkage to financial outcomes – in
other words, the success or otherwise of projects and
initiatives must be realized on the balance sheet. Where this
does not occur, the scores are not being kept for important
items. For example, ‘what net margin return do we expect for
success?’
This method stresses the use of measurable goals and measurement
of strategies to drive it, framed within a three-tiered
structure:
� The mission as conceived as the overarching and driving force
(e.g. to be the industry’s preferred supplier).
� Objectives derived from the mission (e.g. to introduce
appropriate products as needed and before our
competitors).
� Performance indicators (e.g. percentage of customers giving
repeat orders; proportion of profits derived from products less
than two years old).
A simple table outlining this approach might look like Table
8.3:
Table 8.3 Example of a Balanced Business Scorecard
Perspective Goals Indicator
Financial Revenue US$30 million p.a.
Net margin 16%
Customer Satisfaction per sale 8.4 out of 10
% of clients retained 80%
Learning Training hours per employee 40 p.a.
Processes Productive: non-productive hours 81%