For a firm to have balanced measures, it means that the measures selected are balanced
between lag measures and lead measures, between objective measures and subjective
measures, between financial measures and nonfinancial measures, and between
external measures and internal measures. Lag measures are outcome measures, measures
of results from past efforts (e.g., customer profitability). Lead measures (performance
drivers) are factors that drive future performance (e.g., hours of employee
training). Objective measures are those that can be readily quantified and verified (e.g.,
market share), whereas subjective measures are less quantifiable and more judgmental
in nature (e.g., employee capabilities). Financial measures are those expressed in monetary
terms, whereas nonfinancial measures use nonmonetary units (e.g., cost per unit
and number of dissatisified customers). External measures are those that relate to customers
versus shareholders (e.g., customer satisfaction and return on investment). Internal
measures are those measures that relate to the processes and capabilities that create
value for customers and shareholders (e.g., process efficiency and employee satisfaction).