Think of the balanced scorecard as the dials and indicators in an airplane cockpit. A well-designed financial control system can actually enhance rather than inhibit an organization’s total quality management program. (See the exhibit “The Balanced Scorecard Links Performance Measures.”) It provides answers to four basic questions: The Balanced Scorecard Links Performance Measures. Together, they give you a more complete view of how your company has been performing, as well as where it’s headed. What internal processes must we excel at? The managers translated these general goals into four specific goals and identified an appropriate measure for each. Senior managers at ECI, for example, established general goals for customer performance: get standard products to market sooner, improve customers’ time to market, become customers’ supplier of choice through partnerships with them, and develop innovative products tailored to customer needs. It balances financial measures … But that view is not necessarily correct. But if that’s all it is, a tremendous amount of potential value is being missed. BET measures the time required for all the accumulated expenses in the product and process development cycle (including equipment acquisition) to be recovered by the product’s contribution margin (the selling price less manufacturing, delivery, and selling expenses). Assertions that financial measures are unnecessary are incorrect for at least two reasons. Information systems play an invaluable role in helping managers disaggregate the summary measures. 2. Milliken did not want its “associates” (Milliken’s word for employees) to rest on their laurels after winning the Baldridge Award. Let us demonstrate rather than argue this point. The considerable improvements in manufacturing capabilities had not been translated into increased profitability. (See the exhibit “ECI’s Balanced Scorecard.”). Their greatest concern is that the scorecard information is not timely; reports are generally a week behind the company’s routine management meetings, and the measures have yet to be linked to measures for managers and employees at lower levels of the organization. A major office products manufacturer, wanting to respond rapidly to changes in the marketplace, set out to reduce cycle time by 50%. But one enterprising department manager saw things differently. One of the most powerful elements in the BSC methodology is the use of strategy mapping to visualize and communicate how value is created by the organization. The customers of a producer of very expensive medical equipment demanded high reliability. But SVA still is based on cash flow rather than on the activities and processes that drive cash flow. introduced the new tool the Balanced Scorecard and later summarized the concept in the first of three Harvard Business Review articles, “The Balanced Scorecard—Measures That Drive Performance.” The Balanced Scorecard … Similarly, the complexity of managing an organization today requires that managers be able to view performance in several areas simultaneously. As one example, disappointing financial measures sometimes occur because companies don’t follow up their operational improvements with another round of actions. Ideally, companies should specify how improvements in quality, cycle time, quoted lead times, delivery, and new product introduction will lead to higher market share, operating margins, and asset turnover or to reduced operating expenses. Quality and cycle-time improvements can create excess capacity. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success.These financial measures …