As companies around the world transform
themselves for competition that is based on
information, their ability to exploit intangible
assets has become far more decisive than their
ability to invest in and manage physical assets.
Several years ago, in recognition of this
change, we introduced a concept we called the
balanced scorecard. The balanced scorecard
supplemented traditional financial measures
with criteria that measured performance from
three additional perspectives—those of customers,
internal business processes, and learning
and growth. (See the chart “Translating
Vision and Strategy: Four Perspectives.”) It
therefore enabled companies to track financial
results while simultaneously monitoring
progress in building the capabilities and acquiring
the intangible assets they would need
for future growth. The scorecard wasn’t a replacement
for financial measures; it was their
complement.