Performance measures used in the balanced scorecard approach tend to fall into the four groups illustrated in Exhibit 11-3: financial, customer, internal business processes, and learning and growth. Internal business processes are what the company does in an attempt to satisfy customers. For example, in a manufacturing company, assembling a product is an internal business process. In an airline, handling baggage is an internal business process. The idea underlying these groupings (as indicated by the vertical arrows in Exhibit 11-3) is that learning is necessary to improve customer satisfaction; and improving customer satisfaction is necessary to improve financial results.
Note that the emphasis in Exhibit 11-3 is on improvement-not on just attaining some specific objective such as profits of $10 million. In the balanced scorecard approach, continual improvement is encouraged. If an organization does not continually improve, it will eventually lose out to competitors that do.