Several years ago we introduced the Balanced Scorecard (Kaplan and Norton 1992). We
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 …

In a previous paper (Kaplan and Norton 2001b), we described the role for strategy maps and
Balanced Scorecards to develop performance objectives and measures linked to strategy.
With this paper, we show how organizations use their scorecards to align key management
processes and systems to the strategy. We also discuss the relationship of the Balanced
Scorecard (BSC) to other financial and cost measurement initiatives, such as shareholder
value metrics and activity-based costing, and quality programs. We conclude with …