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Balanced Scorecard
Diagnostics
Maintaining Maximum
Performance
PAUL R. NIVEN
John Wiley & Sons, Inc.
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Balanced Scorecard
Diagnostics
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This book is printed on acid-free paper. ∞
Copyright © 2005 by Paul R. Niven.All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, scanning, or otherwise, except as permitted under Section 107 or 108 of
the 1976 United States Copyright Act, without either the prior written permission
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Requests to the Publisher for permission should be addressed to the Permissions
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Limit of Liability/Disclaimer of Warranty:While the publisher and author have
used their best efforts in preparing this book, they make no representations
or warranties with respect to the accuracy or completeness of the contents of this
book and specifically disclaim any implied warranties of merchantability or
fitness for a particular purpose. No warranty may be created or extended by
sales representatives or written sales materials.The advice and strategies contained
herein may not be suitable for your situation.You should consult with a profes-
sional where appropriate. Neither the publisher nor author shall be liable for
any loss of profit or any other commercial damages, including but not limited to
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For general information on our other products and services, or technical support,
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For more information about Wiley products, visit our web site at www.wiley.com.
Library of Congress Cataloging-in-Publication Data:
Niven, Paul R.
Balanced scorecard diagnostics : maintaining maximum performance /
Paul R. Niven.
p. cm.
Includes index.
ISBN-13 978-0-471-68123-7
ISBN-10 0-471-68123-7 (cloth)
1. Organizational effectiveness—Measurement. 2. Performance—Measurement.
3. Industrial productivity—Measurement. I. Title.
HD58.9.N578 2005
658.4′01—dc22 2004025807
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
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To the many organizations, especially those I am
privileged to have worked with, dedicated to the use
and ongoing evolution of the Balanced Scorecard.
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vii
Contents
Preface xi
Acknowledgments xvii
chapter The Current State of the
Balanced Scorecard
The Road Ahead 1
Why the Balanced Scorecard Has Risen
to Prominence 2
The Balanced Scorecard 12
Is the Balanced Scorecard Here to Stay? 17
chapter 2 First Things First 23
Why Balanced Scorecard and Why Now? 23
Who Owns the Balanced Scorecard?:
Exploring Executive Sponsorship 30
Self-Assessment Questions 38
chapter 3 Before You Measure 41
Your Balanced Scorecard Team 41
Balanced Scorecard Training 48
Getting the Word Out:
Communication Planning 50
Terminology and the Balanced Scorecard 55
Your Balanced Scorecard Implementation Plan 57
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chapter 4 Strategy Maps 63
Developing the Strategy Map 65
PersonalizingYour Strategy Map 86
chapter 5 Measures, Targets, and Initiatives 93
Performance Measures 93
Adding Meaning to Measurement through the
Use of Targets 110
Mapping and Prioritizing Organizational Initiatives 116
chapter 6 Cascading the Balanced Scorecard
to Drive Organizational Alignment 127
Developing Implementation Principles
for Cascading Success 129
Understanding the Highest-Level
Balanced Scorecard 130
Cascading Is Based on Influence 131
Reviewing Cascaded Balanced Scorecards 135
chapter 7 Key Balanced Scorecard Process
Linkages: Budgeting, Compensation,
and Corporate Governance 139
Strategic Resource Allocation:The Balanced
Scorecard and Budgeting 139
Linking Pay with Performance:The Balanced
Scorecard and Compensation 147
The Balanced Scorecard and Corporate Governance 155
chapter 8 Sharing Balanced Scorecard Results:
Reporting and Strategy-Centered
Management Meetings 165
Reporting Balanced Scorecard Results 166
The Strategy-Centered Management Meeting 171
Appendix 8A: Choosing Balanced Scorecard
Software 176
viii PREFACE
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chapter 9 Building the Balanced Scorecard
at Aliant, Inc. 185
Pouring a Foundation for Balanced Scorecard
Success 186
Aliant’s Strategy Map, Performance Measures,
Targets, and Initiatives 191
Cascading the Balanced Scorecard to Build
Organizational Alignment 195
Reporting Balanced Scorecard Results 197
Everybody Wins: Linking the Balanced Scorecard
to Incentive Compensation 198
Aliant’s Balanced Scorecard Results 200
index 201
PREFACE ix
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xi
Preface
The Balanced Scorecard drumbeat has grown increasingly loud and clear over
the past 14 years, supplying a soundtrack of performance management wisdom
to accompany us on our journey into the new and uncharted territory of the
knowledge economy. The tool’s beginnings were humble enough, based on
the notion that our traditional performance measurement systems—featuring
an overwhelming reliance on financial metrics—were ill-suited to meet the
demands of a modern business world characterized by value creation stemming
from intangible assets such as employee know-how, deep customer relationships,
and cultures capable of innovation and change.The notion was simple, but the
ramifications profound. Organizations around the globe quickly began to
embrace the Balanced Scorecard system.The idea of four distinct yet balanced
perspectives of performance resonated with an enthusiastic audience weaned on
shaky financial yardsticks used to quantify results for the past hundred years.
Co-created by Robert Kaplan and David Norton, the Balanced Scorecard has
grown tremendously both in stature and adoption since its inception; it has been
hailed as one of the 75 most influential business ideas of the 20th century and
relied on in thousands of organizations spanning every conceivable type and size
across the globe. It began as a measurement system, translating an organization’s
strategy into an interconnected set of financial and nonfinancial measures used to
communicate strategy, build alignment, inform decision making, power perform-
ance management, and prioritize resource allocation.The early adopters of the
model derived benefits from this measures-based application but then took it to
another level by forging linkages between the Balanced Scorecard and critical
management processes such as budgeting, compensation, and, more recently, cor-
porate governance. With that, the label of strategic management system was
thrust on the Balanced Scorecard, and its legions of practitioners continued to
grow. With the advent of strategy maps in the late 1990s, Kaplan and Norton
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wrote yet another innovative chapter in the deceptively simple creation’s life, and
it gained a place in the pantheon of management concepts.
But wait, stop the music. Recent findings suggest that as many as half of all
Balanced Scorecard users aren’t achieving the results they hoped for, and a signif-
icant number still rate their performance measurement systems as “adequate.”1,2
So where have we gone astray? Is the Balanced Scorecard system fundamentally
flawed, or are the application and implementation practices of certain organiza-
tions resulting in these unflattering statistics? This book purports that the
Scorecard system remains a robust framework, very capable of helping organiza-
tions navigate the challenging seas they face in an ocean of competition and
changing dynamics. If anything, the theoretical constructs on which the model is
based have grown stronger, as evidenced by the many enhancements made to the
model over the past years: from measurement to strategic management to com-
munication and strategy execution.
The trouble, I would posit, lies in the methods used to implement the
Balanced Scorecard. Many organizations have been lured by the seductive sim-
plicity of the Scorecard model, believing it could be easily implemented and
produce breakthrough results with a minimum of care and feeding. Un-
fortunately, that is not the case, as the Balanced Scorecard above all other
descriptors represents a change initiative: a change in the way you measure, and
if utilized to full advantage, a change in the way you manage. As we all know,
change is difficult, and hence it is not uncommon for organizations to struggle
during their Scorecard implementation period and ultimately question the suc-
cess of their decision.Troubled implementations stem from any number of defi-
ciencies: a lack of executive sponsorship to reinforce the Scorecard’s value
within the organization, tired metrics reflecting the past with no regard to the
drivers of future success, and management systems that continue to reward
unbalanced, largely financial, performance, to list but a few.This is a high-stakes
game with significant implications for your success; organizations spend thou-
sands of hours per year on their performance management systems, and there-
fore they must derive payback from this enormous investment of human and
financial resources.
I wrote my first book, Balanced Scorecard Step by Step: Maximizing Performance
and Maintaining Results (Wiley, 2001), to fill a perceived void between Balanced
Scorecard theory and practice. Once again I sense an emerging void—between
those questioning the efficacy of the Balanced Scorecard, based on unsuccessful
implementation attempts, and what I perceive as the reality: that the Balanced
Scorecard framework remains sound, but must be instituted with rigor and dis-
cipline if you expect to garner results.This book has been written to provide the
tools and techniques necessary to ensure that you’re maximizing the benefits of
your Balanced Scorecard system.
xii PREFACE
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Over the past 10 years, first as a practitioner and later as a consultant,
researcher, and author, I’ve had a front row seat from which to view the growth
of the Balanced Scorecard from New Age measurement device to powerful
communication tool to transformative strategic management system. Working
with organizations on several continents, I’ve witnessed highly successful
Balanced Scorecard programs built to withstand the considerable vicissitudes of
our challenging markets, and those whose foundation is so weak that a subtle
wind of trouble could send it toppling down.Those experiences as a participant
observer revealed several implementation practices I deem as essential if you
hope to effectively install the Balanced Scorecard and have it produce the break-
through results it has generated for many well-chronicled success stories.Those
essentials form the basis for this book, and I believe they are capable of both
transforming troubled Scorecard implementations and further strengthening
successful initiatives.
what you will find in this book
Breaking new theoretical ground in the Balanced Scorecard field was not my
purpose in writing this book; that task is proficiently attended to by many schol-
ars and researchers pushing the academic envelope of the framework.My aim is to
provide you with time- and field-tested principles you can use to assess your
Balanced Scorecard implementation, along with ideas and recommendations for
building a system that will provide results today and sustain that success for many
years to come.
The nine-chapter text begins with an examination of the current state of the
Balanced Scorecard framework.You’ll learn why it has risen to such heights of
prominence, receive a refresher course on Scorecard fundamentals, and have the
chance to ponder whether the Balanced Scorecard is here to stay.Any guesses as
to my answer? You’ll have to read on to find out. Chapter Two is titled “First
Things First,” and examines the foundational elements that must be in place if
you hope to effectively employ the Balanced Scorecard. Included in the discus-
sion are determining why the Scorecard is right for your organization and the
critical importance of executive sponsorship to this and any change initiative.At
the end of Chapter Two, and each succeeding chapter, you’ll find self-assessment
questions that can be used to critically examine your implementation efforts. I
encourage you to take the time to carefully reflect on these queries and use them
as the basis for group discussions focused on propelling your Scorecard initiative
forward.The theme of “BeforeYou Measure” continues in Chapter Three, as we
delve into a critical examination of your Balanced Scorecard team, training and
education regimen, and communication planning.
PREFACE xiii
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Chapter Four signals a dramatic transition from laying the groundwork for
Scorecard success to reaping rewards through the development of a strategy map.
You’ll be provided with provocative questions you can apply to the objectives
appearing in each of your four perspectives and will also discover how personal-
izing your map can often spell the difference between user apathy and acceptance.
The chapter also supplies diagnostics to review the number of objectives on your
map and examines the cause-and-effect linkages that tell your strategic story.
Measures, targets, and initiatives are the subject of Chapter Five.Testing your cur-
rent performance measures, questioning the number of measures appearing on
your Scorecard, and the vital concept of using measure results to learn—not pun-
ish—will all be extensively covered. Many organizations find it difficult to set
appropriate targets, thus you will find direction on target setting and sources of
target information.The chapter concludes by reviewing how initiatives may be
mapped to Scorecard objectives, ensuring that your resources—both human and
financial—are directed toward the execution of strategy.
For many organizations, the high-level Corporate Scorecard is simply the first
in a series of aligned Scorecards providing all employees with the opportunity to
demonstrate how they contribute to overall results.This concept of cascading is
the topic of Chapter Six. Cascading principles will be supplied, along with tools
to gauge the degree of alignment among Scorecards spanning your organization.
In Chapter Seven, we examine the linkage between the Balanced Scorecard and
budgeting, compensation, and corporate governance. I’ll share proven techniques
to effectively forge these linkages and outline how many companies are using the
Balanced Scorecard to gauge the performance of their Boards.
Sharing Balanced Scorecard results is our focus in Chapter Eight. Here we’ll
look at reporting mechanisms—software and lower-tech methods—and also
investigate how the Balanced Scorecard can become the centerpiece of your
management review process.The book concludes in Chapter Nine with a case
study of Aliant, a Canadian telecommunications company that exemplifies many
of the principles shared throughout the book.
Eleanor Roosevelt once remarked, “Learn from the mistakes of others.You
can’t live long enough to make them all yourself.”3 Growth and development in
all facets of life result from a willingness to acknowledge our shortcomings and
work diligently to overcome them. So it is with the Balanced Scorecard. My
hope is that you will employ the principles and lessons found in this book to
learn from those who have walked this path before you, and in so doing fortify
your Balanced Scorecard for many years to come.
Paul R. Niven
San Diego, California
October, 2004
xiv PREFACE
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notes
1. Edward A. Barrows, Jr., “Assessing Your Balanced Scorecard’s Performance,”
Balanced Scorecard Report, May–June 2004, p. 15.
2. Andy Neely, Chris Adams, and Mike Kennerley, The Performance Prism (London:
Prentice-Hall, 2002).
3. Quoted in: Jef Nance, Conquering Deception (Kansas City, MO: Irvin-Benham,
2000).
PREFACE xv
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xvii
Acknowledgments
Ifeel so fortunate to have had the opportunity to write this, my third book on
the subject of the Balanced Scorecard, a topic that first ignited my passion a
decade ago and continues to fuel a spirit of inquiry and discovery within me. Of
course, an endeavor of this nature is never a singular task, but reflects the work,
experience, wisdom, and advice of countless individuals all sharing a fundamen-
tal belief in the principles espoused in this text.
Let me begin by thanking some of the many people I’ve had the great pleasure
to serve in a consulting capacity over the past years, and who graciously provided
me with a real-world laboratory in which to test my Scorecard hypotheses and
theories. From Anheuser-Busch in St. Louis, my thanks go out to Thomasine
Joyce. From the U.S. Navy, Captain Bill Wilcox, Commander Mike Sumrall,
and Captain Ray Berube. Stan Romanoff at Brother Industries, David Taran and
Stephen Pilch of Divco West Properties, Bill Mao and Annette Hess at the
Orange County Transportation Agency, Peter Murphy and Sue Patel from
EpicData, JohnWilcox of WorldVision, andTom Lynch andVicki Lynn from the
Worcester Polytechnic Institute. Special thanks go out to the many people I’ve
had the privilege to work with at Aliant in Halifax, Nova Scotia, Canada. In par-
ticular, Jay Forbes, David Rathbun,Allan MacDonald, Dennis Barnhart, Jennifer
Dicks, and David Blades.
Many thanks as well to Robert Kaplan and David Norton, whose work and
spirit of discovery are a great inspiration to me.Vik Torpunuri of e2e Solutions
has been a wonderful friend and strong supporter of my work, and I thank him
for both.Thank you as well to Ray Smilor and Rob Fuller of the Beyster Institute
in La Jolla, California, who gave me the opportunity to join them in promoting
entrepreneurship, highlighted by a trip to Russia during which I delivered a
series of Balanced Scorecard workshops. Finally,to my wife Lois:We recently cel-
ebrated our tenth anniversary, and I thank her for the love, support, and encour-
agement she’s provided every day of our life together.
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1
The Current State of the
Balanced Scorecard
the road ahead
Note to self: Always turn off my e-mail program before working on the book.
I’ve provided myself that reminder because my train of thought was just inter-
rupted by a popup box in the corner of my screen. It gently notified me that a
new e-mail was awaiting my immediate attention. Much like the ring of a tele-
phone, the temptation overwhelmed me and I took a quick peek to see who had
contacted me. It was a gentleman in Zimbabwe requesting additional informa-
tion about the Balanced Scorecard. I’m happy to help him and will do so later in
the day. Once I reply to his request, I’ll file it along with those I’ve received from
China, Fiji, South Africa, Singapore, Finland, the U.K., from small manufacturing
firms in the Midwest, and large conglomerates in New York City, from civic
governments in California, and nonprofits in Washington, D.C.As the roll call of
nations and organization types outlined suggests, the Balanced Scorecard has
become a full-fledged worldwide phenomenon. And this phenomenon knows
no boundaries; it stretches around the globe and has affected virtually every type
of organization known to exist.
There is little doubt that the Balanced Scorecard has joined the pantheon of
successful business frameworks; that elite group possessing the dual, and highly
elusive, qualities of broad-based appeal and proven effectiveness. The sheer
breadth and volume of Scorecard implementations are testament to this fact.
Popularity, however, does not guarantee successful outcomes for those treading
this road, and in fact it has been suggested that a majority of all Balanced
Scorecard initiatives fail.1 The most commonly cited issues derailing Scorecard
implementations are poor design and difficulty of implementation.2 The purpose
of this book is to assist you in clearing those hurdles with proven tools and tech-
chapter
1
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niques forged at the crucible of cutting-edge theory and practical experience.
Pitfalls await those who are unprepared at any juncture in this journey, from poor
planning to ineffective team design to inappropriate objective and measure selec-
tion, and many more. During our time together, we’ll carefully study the essen-
tial elements of Balanced Scorecard implementation, offering tools you can use
to ensure that your Balanced Scorecard will help you achieve success today and
sustain that success for the long term.
Before we begin to critically examine your Scorecard implementation, how-
ever, it’s important to step back and cast a trenchant eye on the tool itself. In this
chapter, we’ll review exactly why the Balanced Scorecard has reached an exalted
position as the strategy execution choice of literally tens of thousands of organ-
izations; what it is about this seemingly simple tool, above all others, that quickly
captures the attention of senior executives and shop-floor employees alike; and
finally, why it remains vitally relevant when hundreds of other potential business
panaceas have come and gone.
why the balanced scorecard
has risen to prominence
The reasons for the Scorecard’s ascendance are many and varied, but principally
I believe the tool’s longevity can be traced to an ability to solve several funda-
mental business issues facing all organizations today.In the pages ahead,we’ll look
at four pervasive issues that are undoubtedly affecting your business even as we
speak: (1) a traditional reliance on financial measures, (2) the rise of intangible
assets, (3) the emerging pattern of reputation risk, and finally, (4) the difficulty
most organizations face in executing strategy.Some of these issues are age old and
have been the nemesis of organizations for decades—relying on financial meas-
ures and attempting to implement strategy.The others—a rise in intangible assets
and the emergence of reputation risk—are new, and their effects are just now
being perceived, evaluated, and monitored.What unites these potentially vexing
agents of organizational distress, and serves as inspiration for all of us, is the
proven ability of the Balanced Scorecard to overcome every one of them.
Financial Measures: Is Their Time Running Out?
When the uninitiated ask me to describe the Balanced Scorecard “in a nutshell,”
I get the ball rolling by asking them how most organizations measure their suc-
cess. A short and reflective pause is typically followed by the confident suggestion
of “revenue” or “profits.”And they’re right, most organizations—be they private,
public,or nonprofit—gauge their success primarily by the measurement of finan-
cial yardsticks. It’s been that way for literally thousands of years, and at the turn
2 BALANCED SCORECARD DIAGNOSTICS

THE CURRENT STATE OF THE BALANCED SCORECARD 3
of the 20th century, financial innovations, such as the development of the return
on equity formula, proved critical to the success of our earliest industrial pio-
neers, including DuPont and General Motors.
The decades have come and gone, with financial measurement continuing to
reach dizzying new heights as the number-crunching savvy among us introduced
increasingly sophisticated metrics for the analysis of results.The corporate world
readily embraced these developments and, as the prodigious growth of our gen-
erally accepted accounting principles (GAAP, in accounting parlance) will attest,
financial metrics became the de facto standard of measuring business success.But,
as is often the case, too much of a good thing can lead to some unintended con-
sequences.The unrelenting drive to achieve financial success as measured by such
metrics as revenue and shareholder value contributed to a round of recent cor-
porate malfeasance unlike anything ever witnessed in the long and storied his-
tory of commerce.
Leading the ignominious pack of corporate bad boys is, of course, Enron.
Once the seventh largest company in the United States,where did their insatiable
thirst for growth and financial success lead them? Right into bankruptcy court,
dragging thousands of suddenly poorer and justifiably angry shareholders down
the path with them. If we use history as a guide, we’ll find that Enron is not the
first to apparently run afoul of the law in its tireless pursuit of fortune. A cau-
tionary tale comes in the form of Samuel Insull. Upon migrating to the United
States from England in 1881, Insull, through an association with Thomas Edison,
co-founded the company that would eventually become General Electric. From
his base in Chicago, he assembled a portfolio of holdings that would make any
would-be financial impresario envious: Commonwealth Edison, People’s Gas,
Indiana Public Service Company, and several more. At one point, he held 65
chairmanships, 85 directorships, and 11 presidencies.3 Sadly, the good times were
not destined to roll on forever, and the 1929 crash brought his empire down in a
tumultuous thud. Humiliated, and seen as the personification of corporate greed,
Insull fled the United States but was later dragged back to stand trial for securi-
ties fraud. He was ultimately, and surprisingly, acquitted, but gone were his for-
tune and reputation.He died,penniless,in a Paris subway station on July 16,1938.
Since the dawn of the corporation with Sweden’s Stora Enso in 1288, com-
panies have walked the delicate line of providing prodigious societal benefits and
causing immeasurable harm through questionable, and sometimes uncon-
scionable, acts. Recognizing the need to keep corporations in check,Theodore
Roosevelt, the 26th president of the United States, once remarked: “I believe in
corporations.They are indispensable instruments of our modern civilization; but I believe
that they should be so supervised and so regulated that they shall act for the interests of the
community as a whole.”4 As the President who took a first step toward bringing
big business under federal control by ordering antitrust proceedings against the
Northern Securities Company, Roosevelt would likely have welcomed the

introduction of the Sarbanes-Oxley Act in 2002. The Act has set some of the
toughest corporate governance standards in the world, requiring companies to
report on the reliability of their financial controls, and asking CEOs and CFOs
to put themselves on the line and acknowledge responsibility for internal con-
trols, verifying their effectiveness.
All companies required to file periodic reports with the Securities and
Exchange Commission (SEC) are effected by the Sarbanes-Oxley Act.The sheer
magnitude of the work associated with compliance is daunting.To give you some
indication, Fortune 1000 companies have earmarked more than $2.5 billion this
year in investigation and initial compliance-related work.5 Proponents suggest
that the Act represents the most far-reaching U.S. legislation dealing with secu-
rities in many years.While the Act contains many provisions, two are particularly
relevant to our discussion. Section 906 of the Act requires certification by the
company’s chief executive officer (CEO) and chief financial officer (CFO) that
reports fully comply with the requirements of securities laws and that the infor-
mation in the report fairly presents, in all material respects, the financial condi-
tion and results of operations of the company. Basically, company executives must
pledge that what is in their financial reports is accurate and true.The Act also
requires plain English disclosure on a “rapid and current basis” of information
regarding material changes in the financial condition or operations of a public
company as the SEC determines is necessary or useful to investors and in the
public interest.
Undoubtedly, many American investors will sleep more easily knowing the
Sarbanes-Oxley Act is ever-present, threatening those even remotely considering
anything outside the legal lines with the long arm (and increasingly sharp teeth)
of federal prosecutors. But does the increased financial disclosure ensured by the
Act really describe the value-creating mechanisms of the corporation? Does it
provide us with insight as to how intangible assets are being transformed into real
value for consumers and shareholders? To make an informed decision about any
organization’s true state of affairs, we require information that covers a broader
perspective.This is the case whether we’re talking about a multinational corpo-
ration, a local nonprofit health services organization, or any branch of the federal
government. Ultimately, the Act makes reported financial numbers safer for our
consumption and analysis, but it doesn’t diminish the increasingly apparent lim-
itations of financial metrics.Working in the early 21st century, many organiza-
tions are beginning to question the once unquestionable reliance on financial
measures. Specifically, they note the following:
• Financial measures are inconsistent with today’s business realities. When I ask my
clients what drives value in their business, it is exceedingly rare for me to
hear “machinery,”“facilities,” or even “computers.”What I do hear in near
unanimity from everyone in attendance are phrases such as, “employee

knowledge and skills,”“relationships with customers,” and “culture.” Intan-
gible assets have become the driving currency of organizations wishing to
effectively compete in the modern economy. However, beyond “goodwill,”
you would be hard pressed to find the valuation of such intangibles on a
typical corporate balance sheet. Financial metrics are ill-suited to meet the
demands levied by the true value-creating mechanisms of the modern busi-
ness economy—intangible assets. In the next section of this chapter, we’ll
take a closer look at their steep rise in prominence.
• You can’t see where you’re going when you look in the rearview mirror. Don’t try
this at home: driving down the freeway with your gaze cast intently on the
rearview mirror. Great view of where you’ve been, but what does it tell you
about where you’re going?Very little.Financial measures offer the same lim-
ited view of the future. A great quarter of financial success, a great six
months, or even a great year are not indicative of what lies in store for you.
The business pages are littered with stories of falls from grace by once-lofty
companies.The legendary Fortune 500 bears witness to the inability of suc-
cess to predict success.Two-thirds of the companies listed on the inaugural
list in 1954 had either vanished or were no longer large enough to main-
tain their presence on the list’s 40th anniversary.6
• Financial measures tend to reinforce functional silos. If you were to type “teams”
into the search box of Amazon.com, how many hits do you think you’d
get? Curious, I did just that and was astonished when the total popped up
at over 125,000! Granted, not all of these books embrace the topic of cross-
functional teams in the modern organization, but the staggering popula-
tion of texts about teams lends credence to the well-known notion that in
order to get anything done in today’s environment, we must work together.
Thus, in many respects, and in a growing number of organizations, work
flows horizontally across the enterprise. Financial measures, however, are
decidedly vertical in nature.A department’s numbers are rolled into a busi-
ness unit, and business units are consolidated into a massive corporate heap
of digits. This reporting system does little to encourage cross-functional
work patterns.
• What’s the first thing to get cut in a downturn? Easy question, right? If yours is
like most businesses, the first things flung overboard when the economic
seas become choppy are those that won’t be missed tomorrow or the next
day—items like training, employee development, and research.Their effects
typically aren’t seen for months or even years, and thus they become simple
targets for the instant gratification, “must meet the numbers this quarter”
paradigm of most publicly traded companies.Focusing on short-term finan-
cial numbers can frequently cloud our judgment as to what is going to truly
distinguish our business from competitors in the long term.While training

may be easy to cut today, what effect will that have on your workforce next
year as you attempt to compete in ever-evolving markets?
• Financial measures aren’t always relevant. We’re constantly bombarded with
messages about the speed of change these days. I’m guilty of reminding you
myself, and did so in the last sentence! Why are these disturbing missives
being fired in record numbers? Because it’s true. Look at the disruptive
technologies we’ve witnessed in just the past few years that have revolu-
tionized the way business is conducted.Today, more than ever, we need per-
formance information we can act on. Decisions can’t be debated endlessly,
and the luxury of waiting for complete information is just not an option.
Financial measures frequently lack the action imperative necessary to make
future decisions. Let’s say you pick up your company’s monthly income
statement and see that sales are 5% off plan. Beyond the obvious, what does
that mean, and more important, what do you do? Obviously, declining sales
is an important indicator, but what led to that unenviable state of affairs,
what was the leading indicator? That’s the information we need, and fortu-
nately that’s what the Balanced Scorecard can supply.
I’ve charged financial measures with a litany of offenses in the previous para-
graphs, so you may be wondering if they even belong in a Balanced Scorecard.
The answer is yes, because despite their limitations, no Balanced Scorecard is
complete without financial measures.This is the case whether you’re reading this
as the CEO of a large company, the executive director of a nonprofit, or the
senior manager of a state government.An old song reminds us that “money makes
the world go round,” and so it is with the organizational world. In many cases, the
ultimate arbiter of corporate success is financial. Nonprofits and public-sector
organizations must also be cognizant of the financial ramifications of their actions
and steward their funds in the most efficient manner.This section simply reminds
us that financial measures must be balanced with the drivers of future financial
success and security. Considered alone, they offer limited value. However, when
reviewed in the context of data supplied by nonfinancial measures, they are sud-
denly imbued with the power of information that can transform decision mak-
ing and ultimately lead to even greater success.
The Rise of Intangible Assets
The story of intangible assets can sometimes best be told through the prism of
your family history, so let me tell you a bit about the Niven clan. My grandfather
cut his teeth on the Canadian prairie building railroads for Canadian Pacific.You
talk about old economy—the tools of his trade were literally hammer and shovel.
It was honorable work, back-breaking of course, but honorable. My father took
a different route, opting to be an entrepreneur. He ran a soft-drink business for

most of my formative years.Imagine the delight of a youngster whose dad’s prod-
uct is soda pop!Yes, as the “sugar king” I was quite the popular kid in the neigh-
borhood. Dad didn’t confine his management to a desk; he was out there on the
front lines slinging soda cases from dusk until dawn six days a week.The means
of production was a rickety assembly line that produced as many delays and mys-
terious wheezing sounds as it did soda.
Fast-forward many years,and you have me.I’ve spent my entire career in some
sort of analysis or consulting role, working with others, sharing information and
knowledge in an attempt to drive results. I’ve never swung a pick or hoisted a
soda case; in fact, I recently turned 40, and my mother still says I haven’t worked
a day in my life! Such is the fate of the knowledge worker, and if you’re anything
like me, that’s probably an apt descriptor. In today’s economy, things like
employee knowledge, relationships with customers, and cultures of innovation
and change generate success—in other words, intangible assets.
The power of intangibles manifests in the valuations we see in modern organ-
izations. Margaret Blair of Washington’s Brookings Institute explains:
If you just look at the physical assets of the companies, the things that
you can measure with ordinary accounting techniques. These things
now account for less than one-fourth of the value of the corporate
sector. Another way of putting this is that something like 75% of the
sources of value inside corporations is not being measured or reported
on their books.7
Just 20 years ago, the value of intangible assets in a typical organization rested
at around 38%.The value has virtually doubled in the past 20 years.In the United
States, spending on intangibles has also grown astronomically, and at around a
trillion (yes, trillion!) dollars a year is on par with what companies spend annu-
ally on physical assets.8
What’s become glaringly apparent is that intangible assets are quite different
from the “property, plant, and equipment” that have populated fraying general
ledger sheets for the better part of the past hundred years. For starters, they may
not have a direct impact on financial results. Take training, for example: Many
studies have demonstrated that training is positively correlated with financial suc-
cess, but can we safely say there is a true one-to-one, cause-and-effect relation-
ship evident? Chances are the financial results are a second- or even third-order
effect of the training. Perhaps quality improves as a result of better-trained
employees. Customers respond favorably to enhanced quality and buy more of
the product, which in turn generates financial returns.
There are other differences as well: Tangible assets (as noted previously) are
rigorously quantified on our financial statements. Intangible assets, however, can
be maddeningly difficult to put a price on. Just what is the value of an innova-
tive culture that consistently delivers new products faster than its competitors?

Tangible assets can be easily duplicated; your company may buy a new machine
that increases productivity, but it won’t be long before competitors are beating a
path to the same supplier. However, intangibles in your possession cannot be
bought or duplicated. Relationships with customers that have been cultivated
through years of trust and mutual benefit are something your competitors will
undoubtedly covet but find it exceedingly tough to beat.
Finally, and this is my favorite, tangible assets depreciate with use.That new
computer you bought last week may have the luster of a sparkling diamond
now, but just give it a year or two (if that) and then see how much it’s worth.
Conversely, intangible assets actually appreciate with purposeful use. Consider
knowledge sharing: Every time you communicate with a colleague and she
expands that knowledge, the circle has been enlarged. Multiply that by dozens,
hundreds, or thousands of colleagues on innumerable topics, and the dizzying
ramifications will make your head spin. I can scarcely think of a more encourag-
ing fact.9
History and tradition yield about as easily as iron bars, so it’s not surprising
that the rise of intangibles has put tremendous pressure on our performance
measurement systems.The antiquated devices employed by most companies sim-
ply don’t have the capacity to identify, describe, monitor, and provide feedback
on these most critical value-creating elements. Going forward, however, there
simply is no choice. If 75% of value is generated from intangibles, then we
absolutely must develop the ability to measure effectively.As you’ll see through-
out the book, the Balanced Scorecard has gallantly risen to this vital measure-
ment challenge. In fact, a hallmark of the framework is its ability to track
intangible assets and provide intelligence on their transformation into results.
A story from the Balanced Scorecard implementation of the U.S. Army’s
Medical Department (AMEDD) illustrates the power of the Scorecard in trans-
forming intangible assets.When Lt. General James Peake began his command of
AMEDD, he quickly noted: “we recruit soldiers but retain families.” Keeping
those families happy meant AMEDD had to provide outstanding medical care,
and as a result,“quality, compassionate healthcare” became a key objective on the
strategy map. The objective sounded noble, but what effect would it have on
decision making and action in the field? The test came soon after in the form of
a pregnant woman whose unborn child was threatened with a serious neurolog-
ical defect. Careful diagnosis led to the recommendation of a costly surgery that
held the promise of saving both mother and child, but initially the reimburse-
ment was declined because the procedure was deemed experimental.A team of
Army medical experts was soon convened, and the promise of compassionate
care was put to the ultimate test. After careful reflection the decision was
reversed, payment approved, surgery performed, and amid the great joy of all, a
beautiful baby girl was born completely free of any complications. As Major
General Patrick D. Sculley describes it:

A commander and many consultants went the extra mile, realizing that
the initial “no” would have been far more than just a hassle for the fam-
ily.They wanted to deliver the compassionate care we aspire to on our
Scorecard. I’m proud of the way AMEDD could cut through all the red
tape and make an informed and appropriate decision.10
Reputation Risk
Can you recall where you were on June 13, 2002? I was at home that day, and
began my morning as I frequently do, by reading the Wall Street Journal. One
headline that day jumped out at me above all others: “ImClone’s Ex-CEO
Arrested, Charged with InsiderTrading.”11 The article described the sorry tale of
SamuelWaksal, who had been arrested for allegedly relaying information to fam-
ily members that the Food and Drug Administration was about to reject his firm’s
cancer drug, Erbitux. Buried deep within the text was this seemingly innocuous
reference to a friend of Waksal’s: “Also implicated is Martha Stewart, who sold 3,928
shares on December 27th the day before ImClone announced the FDA’s rejection.”12
That single sentence was reported to headlines and cable news shows around the
world in what seemed like a nanosecond.The government soon shifted its inves-
tigative rigor into high gear, and Ms. Stewart was destined for a prodigious fall
from grace. Since the implications, and later her arrest, Omnimedia’s market
value has plummeted, with hundreds of millions of dollars evaporating. It seems
like only yesterday that Martha Stewart was ringing the bell of the New York
Stock Exchange, a symbolic gesture that signaled her glittering status as a newly
minted billionaire. As of this writing, everyone’s favorite domestic diva is com-
pleting her sentence of five months in prison, to be followed by another period
of house arrest, which should offer her plenty of time to consider the perils of
reputation risk.
Reputation is truly the ultimate intangible asset, one that must be constantly
polished to a sparkling finish in this era of ever-increasing corporate oversight.
Earlier in this section, I noted the difficulty in quantifying the worth of an intan-
gible asset. So it is with reputation. However, the stakes here are sky-high, as
recent estimates suggest that 5% to 7% of a large corporation’s market capitaliza-
tion is represented by brand value.13 When we’re talking billions of dollars and
the ever-watchful eyes of an increasingly suspicious public and hypervigilant reg-
ulators, organizations must act and safeguard their reputations.The importance of
reputation has not been lost on Wal-Mart, the world’s largest retailer. In a tele-
conference with market analysts, CEO Lee Scott suggested that Wal-Mart man-
agement had failed in efforts to repair a reputation tarnished by discrimination
cases and charges of worker mistreatment. Many analysts believe bad publicity
and the related hit to reputation may be the retailing behemoth’s greatest obstacle
to store expansion and further growth.14

In order to protect reputation, it must be managed, and to manage reputation,
it must be measured. Enter the Balanced Scorecard. As previously discussed, a
principal benefit of the Scorecard is its ability to shed new light on intangible
assets, removing the shroud of mystery and displaying them in the cold light of
rational analysis. Leading indicators such as the number of negative news stories
or number of audit findings can go a long way toward steering boardroom dis-
cussions in a new and provocative direction as leaders openly address this vital
asset and put in place mechanisms to protect it for generations to come.
Strategy: It’s All About Execution
What do the following words and phrases have in common: positioning, design,
power, emergent, cognitive, learning, cultural, environmental, configuration, disruptive, five
forces, and value innovation? Despite the wide swath of language they cut, each rep-
resents a school of strategic thought.15 The field of inquiry that is strategy has pro-
duced enormous volumes of information and insight over the past five decades.
Every single piece of work produced, despite the often esoteric jargon, contains
at least a few nuggets of extremely practical and valuable information, but the
sheer volume of material often leaves us scratching our heads and wondering
aloud, “Just what is strategy, anyway?” Every person reading this book could
undoubtedly provide a unique response to that question, and while that may lead
to initial confusion, the spirit of discovery and debate it spawns holds promise for
all of us.While we may never reach a consensus on exactly what strategy is (or is
not), one thing most pundits and practitioners alike tend to agree on is the fact
that strategy execution is more important than strategy formulation.
It’s one thing to sequester yourself and your team away in an off-site location
for a few days of chocolate chip cookies and excruciating debate that leads to a
fresh new strategy, and another thing entirely to bring that plan to life. But
breathing life into the plan on a day-to-day basis is what spells the difference
between winning and losing on the front lines of business. As an old Talmudic
dictum teaches us,“study is not the essence, but action.”16 And to the victors, go
the spoils. One study suggested that a 35% improvement in the quality of strat-
egy implementation for the average firm was associated with a 30% improvement
in shareholder value.17 Sadly, the execution of strategy often falls woefully short,
which not only leads to severe bottom-line maladies but can also crumble the
often wafer-thin credibility held by senior management when a new plan is
introduced.An oft-quoted Fortune magazine study from 1999 found that 70% of
CEO failures came not as a result of poor strategy, but the inability to execute.18
So why does strategy execution prove so elusive for the typical enterprise? Score-
card architects Robert S. Kaplan and David P. Norton believe the answer lies in
the form of four barriers that must be surmounted before strategy can be effec-
tively executed (Exhibit 1.1):

• Vision barrier. Suggests a scant 5% of the typical workforce understands the
strategy.As discussed earlier, success in executing a strategy is the product of
execution. Execution results from action, action from understanding, under-
standing from awareness. Right in the middle of that simple equation lies
understanding. St.Augustine once remarked, “one prays for miracles, but works
for results.” Leaders who develop strategies and fail to take the requisite time
and allocate the appropriate resources to ensure awareness and understand-
ing are doing just that—praying for miracles. Each day your employees are
faced with choices: how to handle a customer situation, what to budget for
the forthcoming year, how to staff, and a hundred others of practical impor-
tance. Informed action is virtually impossible without a sound knowledge
of the organization’s strategy.
• People barrier. Incentive compensation systems have become wildly popular
in the corporate world, and with good reason. Linking pay to performance
drives focus and alignment around common themes. Problems emerge as a
result of the actual construction of the rewards systems, however.Typically,
the incentive is linked to a short-term financial target, and that can lead to
some less-than-rational decision making as managers seek to maximize
short-term gain, often at the expense of long-term sustainable success.
• Management barrier. On the topic of brevity in communication, Mark Twain
once opined,“I tried to write a short letter, but it was too hard so I wrote
a long one.” It’s a great line, and one that rings absolutely true. In the orga-
nizational world, it’s difficult to boil things down to their essence, and as a
result we tend to spend time on the periphery of issues rather than tackling
exhibit 1.1 The Barriers to Implementing Strategy
Only 10% of
organizations
execute their
strategy
Barriers to Strategy Execution
Only 5% of the
workforce
understands the
strategy
Vision Barrier
Only 25% of
managers have
incentives linked to
strategy
People Barrier
85% of executive
teams spend less
than one hour per
month discussing
strategy
Management
Barrier
60% of
organizations don't
link budgets to
strategy
Resource Barrier
Adapted from material developed by Robert S. Kaplan and David P. Norton.

the core.Management meetings manifest this point well.Rather than exam-
ining the blueprint we’ve developed for success (i.e.,the strategy),teams will
spend hours debating line items on the income statement such as gross rev-
enue or cost of sales.These are undoubtedly important contributors to suc-
cess, but are they necessarily strategic?
• Resource barrier. Raise your hand if you love budgeting. I’m guessing not a
single person will derive any aerobic benefit from that question! Budgets are
much-maligned these days, with critics calling their very existence into
question. We’ll examine the topic of budgets in greater detail in Chapter
Seven, but for now suffice it to say that if your budget is not linked to your
strategy,then where exactly is it aligned? Strategy should always be the guid-
ing hand in creating the budget, and simple questions employed in crafting
them: Based on our strategy, what initiatives will distinguish us from our
rivals, and what are the associated resource requirements?
One of the many joys of writing books is having the opportunity to begin a dia-
logue with people from around the world on a topic of common interest. Since
the publication of my first book (Balanced Scorecard Step by Step: Maximizing Perfor-
mance and Maintaining Results), I’ve received calls and letters from readers around
the globe,who have shared their stories and provided feedback on the text.Among
the comments I cherish most are those suggesting that my books are “practical
and simple.”In this age of complexity and constant change,it’s comforting to find
something that is nonthreatening and approachable.When I reflect on those sen-
timents, I believe it’s not simply my literary style, but the topics I discuss.
Everything I’ve shared with you thus far in this book is something you face
every day—using often outdated financial metrics, harnessing intangible assets,
protecting your reputation, and attempting to execute your strategy.These con-
cepts are not particularly challenging from an intellectual standpoint, rather they
are “practical and simple.” But they are also profoundly important to the success
of your business and have led organizations of every conceivable shape and size
to embrace the Balanced Scorecard. In the next section, we’ll briefly examine the
Scorecard model and begin to determine exactly why it has become the tool of
choice for those attempting to beat the overwhelming odds and effectively exe-
cute their strategies.
the balanced scorecard
Origins and Background
The Balanced Scorecard was developed in 1990 by two men: Robert Kaplan and
David Norton. Interestingly, Kaplan is an accounting professor at Harvard

University. Given his profession, you might suspect that he had a vested interest
in safeguarding the vaunted position of financial numbers, but Kaplan was a
visionary; he realized that financial numbers alone would not be enough for
organizations attempting to thrive, or even compete, in the 21st century.To that
end, he and Norton organized a research study of a dozen companies, attempt-
ing to discern best practices in performance measurement. Out of that study, the
Balanced Scorecard was born. Just as a person is born and matures, so too has
the Balanced Scorecard—from measurement system to strategic management sys-
tem to a powerful communication tool describing and articulating strategy.We
owe a tremendous debt of gratitude to the work of Kaplan, Norton, and their
many colleagues who have researched, codified, and published many leading
Balanced Scorecard works.
The basic premise behind the Balanced Scorecard is a simple, yet profound,
one. Financial measures are, and always will be important, but they must be sup-
plemented with other indicators that predict future financial success.With that as
their goal, Kaplan and Norton developed the Balanced Scorecard framework,
shown in Exhibit 1.2.
At the center of the diagram we see the words vision and strategy. Unlike tra-
ditional performance measurement systems,which have financial controls at their
core,the Balanced Scorecard begins with an organization’s vision and strategy.We
seek to translate the vision and strategy into performance measures, which can be
tracked and used to gauge our success in the successful implementation of vision
and strategy.This is accomplished by determining objectives and measures in each
of the Scorecard’s four interrelated perspectives: Financial, Customer, Internal
Processes, and Employee Learning and Growth.
Financial Perspective
Financial measures are an important component of the Balanced Scorecard in the
for-profit, public, and nonprofit worlds. In the for-profit domain, the measures in
this perspective tell us whether our strategy execution—which is detailed
through measures chosen in the other perspectives—is leading to improved bottom-
line results. In the nonprofit and public sectors, financial measures ensure that
we’re achieving our results, but doing so in an efficient manner that minimizes
cost.We normally encounter classic lagging indicators in the Financial perspec-
tive.Typical examples include revenue, profitability, and asset utilization.
Customer Perspective
When choosing measures for the Customer perspective of the Scorecard, orga-
nizations must answer two critical questions: “Who are our target customers?”
and “What is our value proposition in serving them?” Sounds simple enough, but
both of these questions offer many challenges to organizations.Most organizations
will state that they do in fact have a target customer audience, yet their actions

14
Customer
Objectives
"To
achieve
our
vision,
how
should
we
appear
to
our
customers?"
Measures
Targets
Initiatives
Internal
Business
Process
Objectives
"To
satisfy
our
shareholders
and
customers,
what
business
processes
must
we
excel
at?"
Measures
Targets
Initiatives
Financial
Objectives
"To
succeed
financially,
how
should
we
appear
to
our
shareholders?"
Measures
Targets
Initiatives
Learning
and
Growth
Objectives
"To
achieve
our
vision,
how
will
we
sustain
our
ability
to
change
and
improve?"
Measures
Targets
Initiatives
Vision
and
Strategy
Reprinted
by
permission
of
Harvard
Business
Review.
Exhibit
from
“Using
the
Balanced
Scorecard
as
a
Strategic
Management
System,”
by
Robert
S.
Kaplan
and
David
P.
Norton,
January–February
1996,
p.
76.
Copyright
©
1996
by
the
Harvard
Business
School
Publishing
Corporation;
all
rights
reserved.
exhibit
1.2
The
Balanced
Scorecard

reveal an “all things to all customers” strategy. Strategy guru Michael Porter sug-
gests this lack of focus will prevent an organization from differentiating itself from
competitors.19 Choosing an appropriate value proposition poses no less of a chal-
lenge to most organizations. Many will choose one of three “disciplines” articu-
lated by Treacy and Wiersema in The Discipline of Market Leaders.20 They are:
• Operational excellence. Organizations pursuing an operational excellence dis-
cipline focus on low price,convenience,and often“no frills.” Wal-Mart pro-
vides a great representation of an operationally excellent company.
• Product leadership. Product leaders push the envelope of their firm’s products.
Constantly innovating, they strive to offer simply the best product in the
market. Nike is an example of a product leader in the field of athletic
footwear.
• Customer intimacy. Doing whatever it takes to provide solutions for unique
customers’ needs helps define customer-intimate companies. They don’t
look for one-time transactions but instead focus on long-term relationship
building through their deep knowledge of customer needs. In the retail
industry, Nordstrom epitomizes the customer-intimate organization.
As organizations have developed, and experimented with, value propositions,
many have suggested it is difficult, if not impossible, to focus exclusively on
just one. A more practical approach is to choose one discipline in which you
possess particularly strong attributes, and maintain at least threshold standards of
performance in the other disciplines. McDonald’s, for example, is a truly opera-
tionally excellent organization, but that doesn’t stop the company from contin-
ually introducing new menu items. In Chapters Four and Five, we will take a
closer look at the Customer perspective and identify what specific steps your
organization should take to develop Customer measures. Included in our dis-
cussion will be ideas you can use to apply the “value proposition” concept to
your organization.
Internal Processes Perspective
In the Internal Processes perspective of the Scorecard, we identify the key
processes at which the organization must excel in order to continue adding value
for customers.Each of the customer disciplines outlined previously will entail the
efficient operation of specific internal processes in order to serve our customers
and fulfill our value proposition. Our task in this perspective is to identify those
processes and develop the best possible measures with which to track our
progress. To satisfy customers, you may have to identify entirely new internal
processes rather than focusing your efforts on the incremental improvement of
existing activities. Service development and delivery, partnering with the com-
munity, and reporting are examples of items that may be represented in this per-

spective.We will examine the development of performance measures for Internal
Processes in greater depth during Chapters Four and Five.
Learning and Growth Perspective
If you expect to achieve ambitious results for internal processes, customers, and
financial stakeholders, where are these gains found? The measures in the Learning
and Growth perspective (also referred to as the Employee Learning and Growth
perspective) of the Balanced Scorecard serve as the enablers of the other three per-
spectives. In essence they are the foundation on which this entire house of a
Balanced Scorecard is built.
Once you identify measures and related initiatives in your Customer and
Internal Process perspectives,you can be certain of discovering some gaps between
your current organizational infrastructure of employee skills (human capital),
information systems (information capital), and climate (organizational capital) and
the level necessary to achieve the results you desire.The measures you design in
this perspective will help you close that gap and ensure sustainable performance
for the future.
Like the other perspectives of the Scorecard, we would expect a mix of core
outcome (lag) measures and performance drivers (lead measures) to represent the
Learning and Growth perspective. Employee skills, employee satisfaction, avail-
ability of information, and alignment could all have a place in this perspective.
Many organizations I’ve worked with struggle in the development of Learning
and Growth measures. It is normally the last perspective to be developed, and
perhaps the teams are intellectually drained from their earlier efforts of develop-
ing new strategic measures, or they simply consider this perspective “soft stuff”
best left to the Human Resources group. No matter how valid the rationale
seems, this perspective cannot be overlooked in the development process. As I
mentioned earlier, the measures you develop in the Learning and Growth per-
spective are really the enablers of all other measures on your Scorecard.We’ll dis-
cuss objectives and measures for this perspective in Chapters Four and Five.
The Evolution of the Balanced Scorecard
When Kaplan and Norton developed the Balanced Scorecard some 15 years ago,
they were basically attempting to solve a measurement problem: How can we
balance the historical accuracy and integrity of financial metrics with the drivers
of future financial success? The Balanced Scorecard proved to be an eloquent
solution and was ultimately hailed as one of the 75 most influential business ideas
of the 20th century by the Harvard Business Review.As is the case with any idea
whose utility has been forged at the hands of actual practitioners with a real need,
the Balanced Scorecard benefited greatly from the constant tinkering and exper-
imentation of organizations bent on deriving ever-greater benefits from the tool.

The second generation of the Balanced Scorecard manifested as what has been
termed a “strategic management system,” which simply implies linking short-
term actions to long-term strategy by way of the Balanced Scorecard. Budgeting
and compensation were the logical processes to benefit from a union with the
Balanced Scorecard, and so it was as organizations began to find innovative methods
of developing budgets linked to strategy, and incentive systems based on balanced
metrics of performance.
Perhaps the greatest virtue of the Balanced Scorecard framework is its unde-
niable power as a communication tool.With the advent of strategy maps in the
mid-1990s, organizations discovered a potent new method of clearly and simply
describing their strategies in a coherent way to data-rich but information-starved
employees. Attempting to discern how strategy could be enacted had for years
been an exercise of groping hopelessly in the dark, but with the introduction of
the strategy map and Balanced Scorecard, a light literally appeared. No longer is
strategy some poorly understood treatise bandied about by executives,but instead
it is transformed into simple objectives and measures that drive real people to real
behaviors leading to real results.
is the balanced scorecard here to stay?
Let’s put all of our cards on the table and begin with an examination of the“f word.”
No, not that “f word,” the other, far more disturbing one—fad. I’ve been getting
the question from conference participants, clients, and readers for the better part
of the last 10 years:Is the Balanced Scorecard a fad? Far from resenting this query,
I welcome it and the spirit of discourse and discovery it engenders. And why
shouldn’t we question the longevity of the Balanced Scorecard? In this era of
global communication and networks, new ideas flourish and spread faster than
chicken pox through a kindergarten class.The metaphor is intentional because
many ideas seem to spark more organizational suffering than breakthrough results
as originally conceived. Additionally, the longevity of business ideas is gradually
diminishing. Back in the 1950s and ’60s, the average life of a management theory
was around 15 years, whereas today the average idea has a shelf life of approxi-
mately three years.21 Even if you choose to believe in the value of new ideas,
where do you begin? Why, just in the last several years, you could:
Flatten your pyramid, become a horizontal organization, and eliminate
hierarchy from your company.You can empower your people, open your
environment, and transform your culture.You can listen to your cus-
tomers, create a customer-focused organization, and commit to total
customer satisfaction. You can do the “vision thing,” write a mission
statement, and put together a strategic plan.You can improve continu-

ously, shift your paradigms, and become a learning organization.You can
devote yourself and your company to total quality management. Or you
can reengineer your corporation.22
Have you sampled any of the tempting delights of this menu? If so, you’re cer-
tainly not alone. However, as a result of many highly publicized flops, we’ve
become increasingly skeptical of new ideas promising to be the panacea we’ve
been searching for in our quest for business success. But before we write off the
entire management idea factory as out of touch or “pie in the sky,” let’s cast a
more critical eye on what goes on when an idea is adopted by an organization.
There is little doubt that some among us are simply idea chasers, rushing
wildly from one unproven business nostrum to the next, with little thought of
the practical utility of the idea for this business at this time. I believe that virtu-
ally all ideas out there contain at least a kernel of value if judiciously imple-
mented in the face of a real business need. Therefore, the first question you
should ask yourself when considering the adoption of a new idea or technique
(including the Balanced Scorecard) is:“What business need will this tool help us
solve right now, and in the future?” If you can’t provide a compelling response to
that question, one you can sell to your employees who will be looking to you for
guidance and leadership, then you must seriously reconsider your intentions.
Even if you have a driving business need, a “burning platform,” you may still fall
victim to lackluster implementation. Frequently, this problem is the real culprit
in the ongoing drama being played out in companies around the world.All too
often a new idea is sold convincingly, ushered in enthusiastically, but given inad-
equate resources and lacking the ongoing commitment from senior management
to give it any legitimate opportunity to bear fruit.
The Life Cycle of Ideas
As you may have guessed, I’m a fan of new ideas. In fact, I agree with composer
John Cage, who once remarked: “I can’t understand why people are frightened of new
ideas. I’m frightened of the old ones.”23 So you can imagine my delight when I
recently discovered an entire book dedicated to the topic. What’s the Big Idea?
goes deep into a discussion of business ideas and the gurus who spearhead their
acceptance. In an interesting section early in the book, the authors outline the
cycle of a successful business idea within an organization.24 The five phases are
outlined in Exhibit 1.3.
Every idea has a progenitor, which is represented either by the person intro-
ducing the idea to the organization or preceding ideas that sparked interest in the
current movement. Once introduced, ideas generally start small in the form of a
pilot, a limited-scale implementation in one area of the organization. Pilots are
conducted to test the rigors of the idea in the real world and to determine if they

are appropriate for a wider release throughout the company. Typically, those
working on the pilot are the only group aware of the idea, and resources both in
the form of budget and management attention tend to be scant.
Once the pilot has been deemed a success, the idea is generally transformed
into a program, gaining the attention of most senior managers and beginning to
attract resources as it spreads throughout the company.The idea is said to have
gained perspective once it has become part of the everyday routine of the com-
pany.While the idea has gained “mind share” in a large percentage of the popu-
lation, people are still conscious of the idea as they practice it.The final stage in
the internal life cycle of a business idea is that of pervasiveness. Gone are the con-
sulting projects,conferences,and gurus,which may have originally trumpeted the
idea.At this point in its evolution, the idea has become ingrained in the fabric of
the organization and is practiced without being overtly discussed.
Organizations that have successfully implemented the Balanced Scorecard have
reached the stage of pervasiveness, one in which the Scorecard provides a trans-
parent background for virtually every facet of the operation.The tool has become
part and parcel of the everyday running of the company, and while people may be
cognizant of the theoretical dimensions of the framework, those underpinnings
are simply accepted and no longer expounded in a variety of forums.At this point
the Balanced Scorecard has become the cornerstone of management practices,
guiding reporting, budgeting, performance appraisal, and frequently, incentive
compensation. Organizations implementing the Scorecard could do worse than
contemplating this end state of pervasiveness as an initial goal of the implementa-
tion. One of my clients did just that.At the outset of their journey, they declared
success as “every employee having the ability to articulate our strategy and how their role
contributes to the success we will be achieving in executing our plan.”25 They realized
early on that success lay in commitment, rather than compliance to the notion of
the Balanced Scorecard. Once employees were committed through a guiding
rationale, extensive communication, and ongoing management support, they
would embrace the Scorecard and use it to its full capacity, ultimately resulting in
knowledge, focus, and alignment throughout the organization.
exhibit 1.3 The Life Cycle of a Business Idea Within the Organization
Progenitor
Pilot
Project
Program
Perspective
Pervasiveness–
The Balanced
Scorecard has reached
this point in many organizations
Time
Adapted from material presented in “What’s the Big Idea,” Thomas H. Davenport and
Laurence Prusak, What’s the Big Idea (Boston, MA: Harvard Business School Press, 2003).

The Balanced Scorecard Is on Sound Footing for Longevity
Many business observers suggest that the overwhelming majority of business
ideas aren’t entirely new.26 This suggestion most likely results from that uniquely
human phenomenon to build on the work of others using the latest data and
information to improve or adapt ideas to fit current and anticipated circum-
stances. In simpler terms, we like to tinker. And let’s be thankful for that trait
because it has made possible everything from the Constitution under which we
live to the modern conveniences of daily life we take for granted.The Balanced
Scorecard was put forth by Kaplan and Norton early in the 1990s as a revolution-
ary idea for measuring organizational performance. I would suggest, however,
that the basic tenets of the model map very well to work done by management
scholars years, and sometimes decades, earlier.While constantly evolving through
the work of academics and practitioners alike, the Balanced Scorecard is on solid
theoretical footing, which supports its potential as a business tool for the ages.
Peter Drucker is one of the most widely read and heralded management
thinkers of our time.His ideas and musings on the art and science of business have
helped shape management direction throughout the world for the past 60 years.
Drucker’s “TheTheory of the Business”27 argues that all organizations—whether
they know it or not—operate under a set of assumptions about market, cus-
tomers, competitors, technology, competencies, and other fundamental dynam-
ics.The assumptions in all areas must fit one another to produce a valid theory,
they must be known and understood throughout the organization,and they must
be tested constantly.A Balanced Scorecard approach is remarkably analogous.The
“fit” to which Drucker refers is reflected through the cause-and-effect relation-
ships in the Balanced Scorecard. In using the Scorecard as a communication tool,
organizations are ensuring that their strategy is known and understood through-
out the organization, as Drucker asserts must be the case with any valid theory.
Finally,just as assumptions must be tested constantly in Drucker’s model,Balanced
Scorecard results must be analyzed on an ongoing basis and used to learn about
the effectiveness of strategy execution.
In a similar vein,there are striking similarities between the notion of cause and
effect as demonstrated in the Balanced Scorecard and the idea of “syndrome
dynamics” as put forth by Abraham Maslow. Most of us are familiar with the
name Maslow from college courses during which we were introduced to the icono-
graphic “hierarchy of needs.” So it may come as a surprise to learn that Maslow
also spent time studying organizations, resulting in several provocative ideas,
including syndrome dynamics.28 The basic principle of syndrome dynamics is
this: Organizations are “embedded” in their immediate communities; this imme-
diate community is embedded in the larger community, which in turn is embed-
ded in the country, which is embedded in theWestern world, and so on. I would
suggest that each of the four perspectives of the Scorecard represents syndromes

in Maslow’s vernacular. The Scorecard perspectives—Financial, Customer,
Internal Processes, and Employee Learning and Growth—are contained and
structured within the organization. Consistent with Maslow’s theory, they share
functional relationships in the sense that demonstrable causes and effects can be
listed. In fact, the organization would be unable to function without any one of
these elements and the myriad of assumed relationships that underlie them.
Finally, no discussion of the Balanced Scorecard’s roots would be complete
without a reference to the Tableau de Bord, a performance measurement system
that emerged in France at the turn of the 20th century. Originally developed by
process engineers attempting to improve their production processes by better under-
standing cause-and-effect relationships (sound familiar?),theTableau de Bord was
soon used by top management as a set of critical indicators used to assess per-
formance in achieving strategic outcomes.29 Like the Balanced Scorecard, indi-
cators comprising a Tableau de Bord are best generated from a translation of the
organization’s mission.
Answering the Question
And now the answer you’ve all been waiting for: Is it or is it not a fad? Based on
the undeniable results derived from thousands of organizations of every conceiv-
able type and size in every corner of the globe, and on the constant evolution of
the tool to meet the demands and rigor of new practitioners, no, I do not believe
the Balanced Scorecard is a fad.
Perhaps the Balanced Scorecard is better wrapped in another colloquialism,
“good common management sense.” Despite the constant cries of unrelenting
change swirling about us, there remain core elements of business that must be
managed: strategy, planning, measurement, reporting, and so on. Regardless of
what awaits us in the days and years ahead, these pillars will remain, and the
Balanced Scorecard (or whatever moniker it’s given in the future) will be there,
standing resolutely awaiting the challenge of translating inspiring visions and
strategies into the day-to-day actions carried out by employees everywhere in
making those dreams a reality.
notes
1. Mike Bourne and Andrew Neely, “Why Measurement Initiatives Fail,” Quality
Focus, 2000 v4, p. 3.
2. Ibid.
3. John Micklethwait and Adrian Woolridge, The Company (New York: Modern
Library Chronicles, 2003), p. 187.
4. Ibid., p. 182.

5. Mark A. Stephens and Aaron R. Runk, “Sarbanes-Oxley Compliance Drives
Need for Collaborative Management,” Visum Solutions e-paper, 2004, p. 2.
6. Thomas A. Stewart, Intellectual Capital (NewYork: Currency, 1999), p. xxi.
7. Interview on National Public Radio’s Morning Edition, October 27, 2000.
8. Baruch Lev, “Sharpening the Intangibles Edge,” Harvard Business Review, June
2004, pp. 109–116.
9. Brian E. Becker, Mark A. Huselid, and Dave Ulrich, The HR Scorecard (Boston,
MA: Harvard Business School Press, 2001), p. 7.
10. Avery Hunt, “Mobilizing for Well-Being: The Army Medical Department’s
Balanced Scorecard Transformation,” Balanced Scorecard Report, May–June 2003,
pp. 9–10.
11. “ImClone’s Ex-CEO Arrested, Charged with InsiderTrading,” Wall Street Journal,
June 13, 2002.
12. Ibid.
13. Roy Harris,“Picking up the Pieces,” CFO.com, August 2004.
14. Emily Kaiser,“Wal-Mart Looks to Reputation,” USAToday, September 9, 2004.
15. Henry Mintzbert, Bruce Ahlstrand, and Joseph Lampel, Strategy Safari (New
York:The Free Press, 1998).
16. Michael Hammer, “Why Leaders Should Reconsider Their Measurement Sys-
tems,” Leader to Leader, No. 24, Spring 2002.
17. See note 9.
18. R. Charan and G. Colvin,“Why CEOs Fail,” Fortune, June 21, 1999.
19. Michael E. Porter, “Strategy and the Internet,” Harvard Business Review, March
2001, pp. 62–78.
20. Michael Treacy and Fred Wiersema, The Discipline of Market Leaders (Reading,
MA: Perseus Books, 1995).
21. Tom Lester,“PickYour Favorite Fad,” TheTimes of London, September 13, 2001.
22. From Eileen Shapiro, as quoted in:Thomas H. Davenport and Laurence Prusak,
with H. James Wilson, What’s the Big Idea? (Boston, MA: Harvard Business
School Press, 2003), p. 56.
23. Quotation found on www.quotationspage.com.
24. Thomas H.Davenport and Laurence Prusak,with H.JamesWilson,What’s the Big
Idea? (Boston, MA: Harvard Business School Press, 2003), p. 53.
25. Allan A. MacDonald, “Implementing the Balanced Scorecard to Create a Stra-
tegy Focused Organization,” unpublished dissertation, 2004.
26. See note 24, p. 59.
27. Peter Drucker, Managing in a Time of Great Change (New York:Truman Tilley /
Dutton, 1995).
28. Abraham H.Maslow,Maslow on Management (NewYork:JohnWiley & Sons,1998).
29. Marc J. Epstein and Jean François Manzoni, “The Balanced Scorecard and
Tableau de Bord,” Management Accounting, August 1997, p. 29.

23
First Things First
Have you heard the one about Sherlock Holmes and Dr. Watson out on a
camping adventure? They’d gone to sleep beneath the night sky when Holmes
awoke and shook his companion.“Watson, look at the sky and tell me what you
see.” “I see millions of bright stars,”Watson answered. “And what does that tell
you?” Watson reflected and stated confidently: “Astronomically, it tells me that
there are countless galaxies and potentially billions of planets. Astrologically
speaking, Saturn is in Leo.Theologically, I see that God is all powerful and that
we are small and insignificant.And you, Holmes?”
Holmes paused. “What I see,Watson, is that someone has stolen our tent!”
Moral of the story: Never overlook the obvious, regardless of the circumstances.
So it is with our examination of the Balanced Scorecard.The most logical point
of departure on this journey is a discussion of two fundamental aspects of
implementation success: why are you developing a Balanced Scorecard, and do
you have effective executive sponsorship?You may devise the most ingenious set
of measures ever encountered in the organizational universe, but without these
two foundational elements in place,your Balanced Scorecard will be in great peril
from the beginning. In this chapter, we’ll explore these topics and provide you
with the opportunity to gauge your success in securing this foundation for
your work.
why balanced scorecard
and why now?
Management guru Peter Drucker once observed that the most common source
of mistakes in management decisions is the emphasis on finding the right answer
rather than the right question.This is a provocative point, and one that is central
chapter
2

to the first theme of this chapter. The single most important question to ask
yourself before embarking on a Balanced Scorecard implementation is simply:
Why? Why are we developing a Balanced Scorecard for this organization,
and why now?
We’re all familiar with the impressive statistics surrounding Balanced Scorecard
usage in the organizational world: adopted by approximately 50% of the Fortune
1000, hailed as one of the 75 most influential business ideas of the 20th century,
embraced by public, private, and nonprofit enterprises alike. Mere adoption of
the tool, however, does not guarantee that business results will necessarily begin
flowing as rapidly as Niagara Falls. Like any other business tool you employ, the
Balanced Scorecard must solve an organizational issue, plug a hole, cure a head-
ache, or the like.You choose the metaphor, but the bottom line is that you must
possess a legitimate business reason for implementing the Balanced Scorecard.As
we all know, swimming with the tide on all things business-related is not a
roadmap for success.True breakthrough results await those with the courage and
discipline to pursue a path of differentiation—answering opportunities and chal-
lenges with a unique response specifically designed to harness the best the organ-
ization has to offer. Organizations of this ilk quickly recognize that the Balanced
Scorecard is not to be considered a panacea for all that ails them.Rather,it is a care-
fully considered tool rendered with surgical precision to solve real business issues.
Let me share with you some of the risks you face if you choose to simply
develop a Balanced Scorecard for the sake of developing a Balanced Scorecard—
and many companies are guilty of this error in judgment.Last year I began work-
ing with a government organization under the sponsorship of a senior executive.
To my absolute delight, he was downright inspirational in our initial meetings
and training sessions with employees. He frequently repeated such refrains as:
“The Balanced Scorecard is the single greatest priority of this unit this year.”
“My number one priority is the successful implementation of the Balanced Score-
card.” “I’m committing all the resources necessary to develop the Balanced
Scorecard.”These are wonderful statements: inspirational, direct, and indicative of
true sponsorship. But have you noticed what is missing? Not once did he address
why the organization had determined that the Balanced Scorecard was an appro-
priate tool at this moment. I suggested he insert the “why” message in all future
correspondence, but for some reason he hesitated.
Despite our best efforts, over time the implementation began to struggle, and
we were rapidly losing momentum. Eventually, I turned to that most reliable of
corporate news sources—the grapevine—to find out what people were saying
about the Balanced Scorecard. It turns out that most employees were convinced
that in the absence of a stated reason for the Balanced Scorecard, their boss was
planning to use it as a tool for generating layoffs within the unit, and as a result
they were refusing to provide any support for the implementation. “Why lead
ourselves to the chopping block?” was the defining sentiment among the rank

FIRST THINGS FIRST 25
and file. The sponsor was shocked by this news because he sincerely saw the
Balanced Scorecard as a tool that could eventually lead to the attraction of new
resources for the group. He attempted to regroup, but the damage was done, and
we spent literally weeks thereafter communicating the true message of why the
Balanced Scorecard was being implemented. It’s a sad but true fact of the busi-
ness world—in the absence of a motive for change, employees will generate one,
and chances are it won’t be the message you had in mind!
Virtually any type of change has the potential to feel threatening to those who
are affected by it.We’ve all experienced the warm and fuzzy comfort of the sta-
tus quo both in our personal and professional lives.Why, it took my wife 10 years
to convince me to change the brand of toothpaste I use! Change is difficult;there-
fore, it’s essential for you to answer the question of why the Balanced Scorecard
is a necessary step for your organization and why now.As Larry Weinbach, CEO
of Unisys, points out:
Make sure that you recognize not everybody is going to come on board
on day one and that it’s going to take a lot of face time to ensure that
people understand where you want to go and why....The why becomes
a big issue because, it may seem surprising, but a lot of people may not
understand why you want to make the strategic change, even if the com-
pany is not doing well.1
Like the absent tent revealing the sparkling night sky above Sherlock Holmes,the
rationale for change may be glaringly apparent to you,but chances are you have far
greater access to strategic information than most of your employees,the very group
who will ultimately be charged with the responsibility of living the Balanced
Scorecard on a day-to-day basis.To them,the case for change may be unwarranted
or simply unknown, and without that knowledge it will prove exceedingly dif-
ficult for you to gain their true commitment to the implementation.
Determining Why to Use the Balanced Scorecard
Your choice for adopting the Balanced Scorecard must be a personal one, based
on the environment you face and your belief in the tool’s ability to lead you to
improved results for all of your stakeholders. However, there are several com-
monly cited motivations, and we’ll discuss each in the following paragraphs.
Upon further reflection, some organizations may appropriately determine that
the time is not right for a Balanced Scorecard.To help you make that decision,
please refer to the assessment guide in Exhibit 2.1.
Probably the most oft-mentioned impetus for implementing a Balanced
Scorecard is the effective execution of a new strategy. As discussed in Chapter One, the
odds are heavily stacked against those wishing to execute their strategies, and
therefore, the Balanced Scorecard has emerged as a very popular, and extremely

To complete the exercise, read each statement and determine how much you agree with
what is stated. The more you agree, the higher the score you assign. For example, if
you fully agree, assign a score of 5 points.
1 2 3 4 5 1. Our organization has invested in Total Quality Management (TQM) and
other improvement initiatives but we have not seen a corresponding
increase in financial or customer results.
1 2 3 4 5 2. If we did not produce our current Performance Reports for a month,
nobody would notice.
1 2 3 4 5 3. We create significant value from intangible assets such as employee
knowledge and innovation, customer relationships, and a strong
culture.
1 2 3 4 5 4. We have a strategy (or have had strategies in the past) but have a hard
time successfully implementing it.
1 2 3 4 5 5. We rarely review our performance measures and make suggestions for
new and innovative indicators.
1 2 3 4 5 6. Our senior management team spends the majority of their time
together discussing variances from plan and other operational issues.
1 2 3 4 5 7. Budgeting at our organization is political and based largely on historical
trends.
1 2 3 4 5 8. Our employees do not have a solid understanding of our mission,
vision, and strategy.
1 2 3 4 5 9. Our employees do not know how their day-to-day actions contribute to
the organization’s success.
1 2 3 4 5 10. Nobody owns the performance measurement process at our
organization.
1 2 3 4 5 11. We have numerous initiatives taking place at our organization, and it’s
possible that not all are truly strategic in nature.
1 2 3 4 5 12. There is little accountability in our organization for the things we agree
as a group to do.
1 2 3 4 5 13. People tend to stay within their “silos,” and as a result we have little
collaboration among departments.
1 2 3 4 5 14. Our employees have difficulty accessing the critical information they
need to serve customers.
1 2 3 4 5 15. Priorities at our organization are often dictated by current necessity or
“fire-fighting.”
1 2 3 4 5 16. The environment in which we operate is changing, and in order to suc-
ceed, we too must change.
1 2 3 4 5 17. We face increased pressure from stakeholders to demonstrate results.
1 2 3 4 5 18. We do not have clearly defined performance targets for both financial
and nonfinancial indicators.
1 2 3 4 5 19. We cannot clearly articulate our strategy in a one-page document
or “map.”
1 2 3 4 5 20. We sometimes make decisions that are beneficial in the short term
but may harm long-term value creation.
exhibit 2.1 Assessing the Need for a Balanced Scorecard

exhibit 2.1 (Continued)
Scoring Key:
20 – 30: If your score fell in this range you most likely have a strong performance
measurement discipline in place. The program has been cascaded throughout your
organization to ensure that all employees are contributing to your success, and it is
linked to key management processes.
31 – 60: You may have a performance measurement system in place but are not experi-
encing the benefits you anticipated or need to succeed. Using the Balanced Scorecard
as a Strategic Management System would be of benefit to you.
61 – 100: Scores in this range suggest difficulty in successfully executing your strategy
and meeting the needs of your customers and other stakeholders. A Balanced Scorecard
system is strongly recommended to help you focus on the implementation of strategy
and align your organization with overall goals.
effective tool in this regard. A note of caution is in order here, however. Some
organizations will embark on a Balanced Scorecard effort in the belief that the
implementation will lead to the development of a new and winning strategy.Let’s
be very clear:The Balanced Scorecard is a tool that was designed to assist you in
executing your strategy, not crafting a new strategy. The inherent assumption
accompanying the Balanced Scorecard is that your organization possesses a strat-
egy and requires a tool to bring it to life on a day-to-day basis.To be fair, how-
ever, I have witnessed implementations in which the building of a Balanced
Scorecard has led organizations to reconsider their strategic directions and dis-
cover new paths, enlightened from the discussion and debate that characterizes
Balanced Scorecard development sessions.
Many organizations may have a clear and concise strategy, forged from the fires
of the best available knowledge, but find it difficult to galvanize that vision across
a diverse workforce.This dilemma is not surprising when you consider phenom-
ena such as mergers and acquisitions,which are increasingly bringing together cul-
tures that may provide synergies down the road but are vastly different.As the ink
is drying on the contracts, employees are faced with the question:“What do we
do now?” Many organizations will turn to the Balanced Scorecard in an attempt
to drive focus and alignment from top to bottom throughout the enterprise.Again,
the Scorecard admirably answers this call through the deceptively simple objec-
tives and measures that can be quickly communicated and grasped across the com-
pany. Cascading the Scorecard, a topic we’ll consider in more detail in Chapter
Six, provides every employee with the opportunity to openly declare how his or
her actions are contributing to the overall success of the company, and in so doing
drives those frequently elusive elements of organizational focus and alignment.
The average tenure of CEOs in the United States is declining rapidly, with the
typical stay in the chief executive’s chair a scant three years. Given the unrelent-
ing focus on driving value for shareholders, CEOs have precious little time to
Adapted from Balanced Scorecard Step by Step for Government and Nonprofit Agencies by
Paul R. Niven.

establish themselves as credible leaders, capable of producing the results craved by
markets.A Balanced Scorecard is frequently used to deliver their change agenda in a
clear and coherent fashion, one capable of being absorbed and acted on quickly.
What better way for an ambitious executive to put her stamp on the organiza-
tion than by creating a compelling set of objectives and measures, emanating
from strategy, and aimed at taking the organization to the next level.
Just a cursory scan of the business pages, or even the front page headlines, will
reveal the existence of many crises in the corporate world. Barely a day goes by
that we don’t hear of the impending death of a company, or in some cases, entire
industries. Emerging successfully from a crisis requires many things, but chief among
them is the focus on a few, key business priorities that will right the ship in the
short term and lead to ongoing profitability in the long term. When Greg
Brenneman and Gordon Bethune were charged with the unenviable task of
turning around the fast-sinking Continental Airlines in 1994, they quickly
grasped the necessity of getting the struggling company focused on fundamen-
tals.A key component of their “Go Forward Plan” was the relentless tracking of
15 or so key performance measures designed to get everyone from baggage han-
dlers to executives rallying around exactly what it would take to turn the com-
pany around.2 As Brenneman, Bethune, and countless other corporate chieftains
have learned, the right performance measures—crafted from strategy and woven
together to tell your story—have the unique ability to drive laser-like focus on
business results. Within a year of their turnaround efforts, Brenneman and
Bethune were able to shepherd the ailing Continental from worst to first in dis-
patch reliability and shave a hefty $275 million from their maintenance budget.
Companies with their feet to the fire tend to garner the lion’s share of busi-
ness press and generate tantalizing headlines, but what of the vast number of
organizations that are moving along very well, making their way in a slow and
steady progression of ever-greater results? Is the Balanced Scorecard right for
them?The answer is a resounding yes. Proactive organizations currently enjoying
success realize that sustaining prosperity is a challenge to be confronted every day.
In fact, generating enthusiasm for a change vision may pose an even greater chal-
lenge to those whose employees are operating in a blissful state of confidence,
buoyed by past results.That hasn’t stopped organizations like Datex-Ohmeda, the
largest division of Instrumentarium and a world leader in the production of
machinery used in acute care.When they turned to the Balanced Scorecard, the
picture could hardly have been brighter; since their inception as a new division
of Instrumentarium in 1998, Datex-Ohmeda had posted double-digit growth
figures and achieved the targeted 15% operating profit level ahead of schedule.
They realized, however, that past success was in no way indicative of future profits,
especially in light of toughening competition and increasing customer demands.
The Balanced Scorecard has ensured that their strategy is well-understood across
the many languages and cultures of the organization, and it helped build a uni-
fied team committed to moving ahead together as one.3

Most of what we’ve discussed thus far in this section can be capably repre-
sented by numbers and words. It’s easy for a CEO to gather employees in a con-
ference room and enthusiastically announce the company’s new strategy,
accompanied by mouse pads and coffee cups with slogans emblazoned promi-
nently. It’s equally simple to provide the stark reality of a grim situation to a fre-
quently incredulous crowd in the form of distressing financial results, but all too
often neither of these approaches produces the intended effect of bringing peo-
ple to action. Some find the messages remote and abstract, whereas others feel
the problem rests solely with senior management, and it’s their responsibility to
get the company out of any mess, regardless of how it was created.
Encountering this situation, some organizations will take the road frequently
less traveled and bring their teams face to face with operational problems.That’s
exactly what NewYork City Police Commissioner William Bratton did to bring
the harsh reality of the city’s crime problems into the laps of his managers.4 As
head of the city’s transit police in 1990, Bratton discovered that none of his sen-
ior staff officers rode the subway to work.Most commuted,and when they arrived
at work, they were shuttled throughout the gridlocked streets of NewYork in the
comfort of city-provided vehicles. Complacency reigned, because it was difficult
for staffers to feel the literal pain and fear of subway riders when they were trav-
eling safely and comfortably. Bratton quickly extinguished their self-imposed
comfort by insisting that every transit police official—including himself—ride the
subway to work, to meetings, and at night.What they experienced came as a cold
slap in the face to many: aggressive beggars panhandling relentlessly, winos and
homeless people sprawled over benches,and gangs of youths running wild and fre-
quently intimidating those citizens courageous enough to brave the system. No
longer was subway crime a nonthreatening statistic on some innocuous report;
instead, it was transformed into a living, breathing reality.
The need for change was deeply planted in the psyches of managers, and
Bratton used it to push for changes in the transit police, and later throughout the
entire department.You may not require such dramatic actions as those enacted
by Bratton, but certainly you can take concrete steps to introduce the reality of
your situation to your employees. Simply speaking to customers, visiting stores
where your products are sold, or requiring all employees to use your products or
services for a week and report on their experiences may be enough to jolt some
team members out of the comforts of complacency and enhance their willing-
ness to embrace a case for change.
The Benefits of Having a Guiding Rationale
Shallow and vague rhetoric simply won’t cut it in today’s information economy.
Employees want and need to understand the strategy of the company and how
they contribute to it in a meaningful way.We’re overloaded with data at every
turn on the corporate highway, and weary managers need the ability to discern

the truly important from the marginally noteworthy. Once you’ve made the
decision to use the Balanced Scorecard, your first obligation is to clearly explain
why that choice has been made and what benefits you expect as a result. The
more specific you are, the better—outline in vivid detail the challenges you face
from competitors, changing customer tendencies, supplier pressures, stakeholder
demands, and so on. Demonstrate to your team why change is not simply an
option, but an imperative if you are to stay in the game and sustain your success.
Developing a rationale for your Balanced Scorecard is not a one-time, check-
that-off-the-list activity. Rather, it is an ongoing anthem for the implementation,
one that informs all future decisions regarding your Scorecard development. At
each junction on the path of Balanced Scorecard development, you’re faced with
choices.The guiding rationale you’ve put forth will help illuminate that path and
create sound solutions that further embed the tool in the fabric of the organiza-
tion. Finally—and you all know this—every implementation will lose momen-
tum at one time or another; the practical realities of modern business and its
multitude of attendant priorities make that a virtual certainty. The true test is
whether you can emerge from these periods of corporate lethargy with renewed
vigor and enthusiasm for the task at hand.A guiding rationale for your Balanced
Scorecard can serve as your rallying cry, bringing together the entire organiza-
tion under the banner of why you made this decision in the first place.
who owns the balanced scorecard?:
exploring executive sponsorship
One of the books I’m currently reading is Stephen Ambrose’s utterly engrossing
tale of the Lewis and Clark expedition, Undaunted Courage. It reads more like a
novel than an historical account of two 19th-century explorers, and the twists
and turns would make any Hollywood screenwriter envious. One of the many
things that fascinates me about the journey of the Corps of Discovery is the
innumerable choices faced by Meriwether Lewis and William Clark throughout
their epic journey. Supplied with the most rudimentary of maps and lacking any
concrete knowledge of geography west of the Continental Divide, they had to
make potentially life-altering decisions on a daily basis: which route to take, how
to traverse seemingly unconquerable terrain, which Indian tribes to trust and
trade with, how to ensure the ongoing fitness and safety of their men, and so on.
It’s a long way from Lewis and Clark to the executive floors of our major cor-
porations, but consider for a moment the parallels with the modern executive.
Charting the direction of today’s business enterprise must sometimes feel strik-
ingly similar to being in an isolated wilderness without a reliable map.The jour-
ney to strategic execution is fraught with challenges, each with the potential to
severely damage corporate and executive fortunes alike. Like Lewis and Clark,

Another Random Scribd Document
with Unrelated Content

for presentation to the Association, to be spread upon the records.
(See Proceedings, p. 130.)
TRANSACTIONS OF THE EXECUTIVE BOARD.
List of American dissertations. In accordance with vote of Council,
the following committee from the College and Reference Section was
appointed to arrange for the publication of the list of dissertations
proposed by the section: B. C. Steiner, C. W. Andrews, W. M. Smith.
Committee on resolutions. A committee on resolutions to serve
during the Waukesha conference was appointed, as follows: Herbert
Putnam, Mary W. Plummer, J. C. Dana.
Secretary's expenses. A communication was received from the
Finance Committee, recommending that the sum of $425 be allowed
for the expenses of the secretary's office for the year ending July 16,
1901. It was Voted, That $100 additional be also appropriated for
the secretary's expenses for the past year.
Non-library membership. It was Voted, That the names of 38
persons not engaged in library work, as presented by the treasurer,
be accepted for membership in the Association.
No meeting of the incoming Council or executive board was held,
and the appointment of special and standing committees, reporters,
etc., was therefore deferred.
Helen E. Haines, Recorder.
ELEMENTARY INSTITUTE.
An Elementary Institute, for the presentation of "first principles" in
library work, was held in the assembly room of the Fountain Spring
House on Tuesday evening, July 9. In the absence of Miss Cornelia
Marvin, chairman, Miss L. E. Stearns presided. The meeting was
quite informal, and there were no prepared papers, except one by
Miss Gratia Countryman on
OPPORTUNITIES.

(See p. 52.)
An introductory speech was made by Mr. Dewey, who spoke of the
educational force that libraries should exert in the community, and
the varied field before the public library of to-day. There was some
general discussion, in the course of which J. C. Dana read a letter
describing pioneer library work carried on in the Yukon district of
Alaska, and E. P. McElroy told of some interesting incidents
connected with the work of his library at Algona, Iowa.
An early adjournment was made to attend the display of
stereopticon views of library buildings which was given on the same
evening.
ILLINOIS STATE LIBRARY SCHOOL ALUMNI
ASSOCIATION.
A most enthusiastic reunion of the alumni of the Illinois State Library
School was held at Waukesha on July 5, in connection with the
meeting of the A. L. A.
Forty-seven members of the Alumni Association sat down to a long
table which had been spread for them in the dining-room of the
Fountain Spring House, where a very pleasant hour was passed in
renewing old friendships and hearing about the work of classmates
who had gone out to make themselves famous in the library world.
Following the dinner a business meeting was held, after which the
members listened to a most interesting report by Miss Katharine L.
Sharp, director of the Illinois State Library School, on the growth and
present condition of the school, showing the changes which have
come to it from its connection with the University of Illinois.
Miss Sharp gave an outline of each course as it is now given in the
school, noting the changes which have been made and the reasons
for these changes. The report was of especial interest to the early
graduates of the school, who could follow the changes made in the
course of instruction, the general development in scope and

methods, and could so well comprehend the great growth of the
school since its establishment at Armour Institute of Technology, in
Chicago, in 1893.
Margaret Mann, Secretary.
THE SOCIAL SIDE OF THE WAUKESHA
CONFERENCE.
By Julia T. Rankin, Carnegie Library, Atlanta, Ga.
To chronicle the social side of the twenty-third annual meeting of the
American Library Association is a pleasant duty. To recall all of the
courtesies extended to us by our hosts of the Middle West would
take more time than is at my disposal and more space than the
Proceedings allot to the frivolous recreations of the strenuous
librarians. Through the entire period of the meeting, the good people
of Waukesha did everything in their power to make the time pass
pleasantly and Mr. Walker, the proprietor of the Fountain Spring
Hotel, worked early and late to make the members comfortable. Golf
had a few members marked for its own, and these were not
deterred by the 110°-in-the-shade-conditions. Dancing was in order
every evening after the meetings (Sunday excepted) and the
gentleman from Washington is said to have solved the problem of
how often a man can dance with the same girl in a given evening.
The piazzas were ample and as each led to some spring sooner or
later, the "water habit" became popular. The dining-room was, in the
language of the daily papers, "taxed to its utmost," but all
shortcomings were treated with good-natured indifference when it
was understood that the hotel had never accommodated so many
people in its history, and the management promptly increased its
force of servants to meet the occasion.
According to the program the social side of the conference should
have begun on the evening of July 3 with "friendly greetings" at 8.30
p.m.; but as the New York party did not arrive until 9 p.m., and the

New England party not until 2 a.m., it will readily be seen that the
friendly greetings had to be postponed. Social amenities, however,
commenced on the morning of "the Fourth" when the proverbial
early bird, arrayed in cool flannels or faultless duck, promenaded the
long veranda of the Fountain House and greeted the later arrivals.
As the "later arrivals" had almost all come from a distance during
one of the hottest weeks of the hottest summer known, and were
consequently covered with dust and cinders, it was tantalizing to see
the earlier arrivals in such cool array, and welcome speeches were
cut short until the dust of travel could be removed.
The coolness of the evening found a refreshed, summer-attired
conference wending its way to the Methodist Church where the
public meeting was held. The speeches were interrupted repeatedly
by the festive small boy and his Fourth of July crackers. The
explosions caused untimely mirth when they punctuated or
emphasized the well rounded periods of the orators. The formal
meeting was followed by informal groups on the veranda of the
hotel and at the springs where thirsty mortals never tired of drinking
the "fizzy" waters, that have made Waukesha famous as the
"Saratoga of the West," and, indeed, the place has many features
similar to its famous Eastern prototype.
Friday evening was devoted to various dinner parties of the alumni
of the library training schools, and the dining-room with its long
tables and flowers presented a festive scene. College yells and class
cheers resounded through the halls. One got a good idea of the
number of technically trained library assistants now dispersed over
the country.
Saturday evening the hotel management provided a dance for the
guests and the great dining hall was transformed into a gay
ballroom. Although Mr. Cutter was absent the dancing contingent
was ably represented, and a delightful evening was enjoyed.
The program meetings were well attended and the many papers
presented during the sultry days of the first week made Sunday a
welcome day. The Rest Cure seemed to be the order of the day until

after lunch, when most of the members went to Milwaukee to see
the public library, where an informal reception was held. Misses
Stearns, Dousman, Van Valkenburgh and Stillman entertained a
party of 40 at White Fish Bay. A trolley ride to Milwaukee and on to
this beautiful bay proved a good appetizer for the very excellent
lunch provided. The view of the lake was keenly enjoyed and the
day was clear and cool. Twenty miles home and an early supper, and
most of us were willing to retire early, for the trip to Madison next
day was scheduled for an early hour.
Although the day spent in Madison was not strictly a "social" feature
of the conference, yet so delightfully did the citizens of Madison
welcome the visiting librarians that the record of the day in truth
belongs to the social chronicler. Its pleasures came as a complete
surprise to those who had not prepared themselves with Appleton's
guide and other works of ready reference. The building of the
Historical Society is certainly one of the most beautiful and sensibly
arranged libraries in the United States and its situation on the
outskirts of the grounds of the University of Wisconsin leaves
nothing to be desired. In fact it would be hard to picture a more
beautiful situation for a university town than this. The lakes, the
undulating landscapes and the beautiful roads extending for twenty-
five miles and maintained by a committee of public spirited men,
who also are responsible for planting the roadsides with hardy
shrubs, trees and flowers, make the external conditions ideal. The
whole party was driven through the town, the university campus,
and through five or six miles of the park roads, and was then
escorted through the library building by Mr. Thwaites, Mr. Bradley
and the assistants. It was while the members were being driven
through the town that the new library anthem was perpetrated, and
"Of all the cakes
My mother makes
Give me the gingerbread!"
will go down in A. L. A. history linked with

"Here's to Mr. Bradley
Who smiles on us so badly,
gladly,
mad
ly,
sa
dly!"
The whole 350 found chairs in the gymnasium of the university and
disposed of every one of the doughnuts promised to them by Mr.
Thwaites in his eloquent address on Luncheons the previous day.
The afternoon was spent in inspection of the beautiful new library
building, and here an hour or so later the "official photograph" was
taken, the delegates being seated on the steps of the library with its
stately façade for background.
Madison refused to maintain us after five o'clock, and on our return
to Waukesha we found that the City Federation of Women's Clubs of
Waukesha would be "at home" in our honor, so we put on our
prettiest frocks and were presented in due form. The reception
committee comprised Mrs. H. Y. Youmans, president of the State
Federation; Miss L. E. Stearns, Mrs. O. Z. Olin, Mrs. C. E. Wilson,
Miss Winifred Winans, Miss Emily Marsh and Miss Kate Kimball. A
bevy of pretty girls served tempting ices and a musical program was
delightfully rendered.
Tuesday's program was almost too much for even the most
confirmed conference attendant. From 9 a.m. till 1 p.m. and from 2
p.m. till 6 did we sit and listen or stand and discuss the program. At
9 p.m. Mr. Eastman's display of library architecture, by means of a
stereopticon, proved to be one of the most interesting features of
the meeting. It is wonderful the advancement made in this form of
library development; and still more wonderful how many bad
libraries are still being built when so much information is to be had
on the subject.
Later the dining-room was cleared and the conscientious librarians
who had sat all day in interesting sessions were invited to relieve the

monotony of work with the terpsichorean muse. It was a pretty sight
to see the girls in their muslin frocks and all the young and old
members meet in the measures of a Virginia reel. And such a reel; it
will go down to history as the dance of the Waukesha meeting. Staid
librarians growing bald with the weight of a nation's libraries; quiet
instructors in library economics, all unbent to the fascination of this
old-fashioned country dance.
Wednesday's sessions were somewhat broken by the necessary
preparations for departure. In order to leave nothing undone the
hotel management arranged a fire spectacle this last afternoon of
the conference and the fair grounds looked their best with flames
leaping in the air and the black smoke rolling on. There was a large
attendance of spectators, including the town fire department who
declared the exhibition a great success.
Then came the leavetakings, and after many handshakings and
hearty appreciations of hospitality, the conference gradually
disintegrated and only a small number of us were among that
fortunate party lined up along the wharf at Milwaukee to take the
lake trip to Buffalo en route to our homes.
We stood in silence as the big white Northwest loomed in sight. This
ship and its twin-sister the Northland represent the perfection of
modern lake travel and rival the trans-Atlantic liners in elegance and
comfort. It was a sleepy party that sought staterooms early. The
morning came fine and cloudless, and although the dawn and
sunrise on the water seemed to come very early in this high latitude,
it was a thing of beauty—an aquarelle of Nature's best workmanship.
The trip to Mackinac was marked by the organization of the Infinite
Eight, a secret society having blood-curdling ritual and banded
together for offensive and defensive tactics in the war upon the
cuisine—led by the gallant survivor of the "Adventures of a house-
boat." This company attacked everything that was before it and
demolished everything within its reach. Not until the last day were
any reverses recorded and then Neptune with his trident reduced the
gallant band to four. In memory of this glorious record the survivors

have applied for arms consisting of a ship rampant on a field azure
and the motto
Puellæ Pallidæ non ad cenam veniunt.
When Buffalo was reached the Pan-American exhibition claimed
everyone's attention. Most of the party were there by eleven o'clock
and spent the rest of the day. Mr. Elmendorf claimed a number of
the men and gave them a delightful dinner in "In Nuremburg," and
everyone was in front of the great pilons in time to see the electricity
turned on at 8.30, after which the gondoliers became popular. It was
Georgia Day at the Exposition and the A. L. A. members who had
attended the Atlanta conference were greeted by a familiar figure in
the person of Mr. Cabiniss, who had addressed the Association at
Atlanta and was one of the orators of the day. The most popular part
of the proceedings, however, was the singing of the refrain
"He laid aside a suit of
gray
To wear the Union blue"
which was cheered and encored many times.
Sunday was spent at Niagara Falls by most of the survivors and
everything was accomplished, even to going under the American
Falls. Many goodbyes were said in the Nuremburg restaurant at the
Exposition that evening and the shutting off of the electric light
closed one of the pleasantest post-conference trips in the history of
the Association.
OFFICERS AND COMMITTEES
SERVING IN 1900-01 AND DURING WAUKESHA CONFERENCE.
President: Henry J. Carr, Scranton Public Library.
First vice-president: Ernest C. Richardson, Princeton University
Library.

Second vice-president: Salome Cutler Fairchild, New York State
Library.
Secretary: Frederick W. Faxon, Boston Book Co.
Treasurer: Gardner M. Jones, Salem Public Library.
Recorder: Helen E. Haines, Library Journal, New York.
Registrar: Nina E. Browne, A. L. A. Publishing Board, Boston.
Trustees of the Endowment Fund: Charles C. Soule, Brookline;
John M. Glenn, Baltimore, Md.; G. W. Williams, Salem, Mass.
A. L. A. Council:[J] Henry J. Carr, John C. Dana, Melvil Dewey,
George Iles, Mary W. Plummer, R. R. Bowker, C. A. Cutter, W. I.
Fletcher, W. E. Foster, Caroline M. Hewins, Wm. H. Brett, F. M.
Crunden, Frank P. Hill, Hannah P. James, J. N. Larned, C. W.
Andrews, John S. Billings, Electra C. Doren, Wm. C. Lane, J. L.
Whitney, C. H. Gould, J. K. Hosmer, Herbert Putnam, Katharine
L. Sharp, Charles C. Soule.
Executive Board: President, ex-president (R. G. Thwaites), vice-
presidents, secretary, treasurer, recorder.
Publishing Board: Chairman, W. I. Fletcher; W. C. Lane, George
Iles, R. R. Bowker, Melvil Dewey.
STANDING COMMITTEES.
Finance: James L. Whitney, George T. Little, Charles K. Bolton.
Co-operation: W. L. R. Gifford, W. R. Eastman, Electra C. Doren,
J. G. Moulton, Agnes E. Van Valkenburgh.
Public Documents: R. R. Bowker, Adelaide R. Hasse, W. E.
Henry, Johnson Brigham.
Foreign Documents: C. H. Gould, C. W. Andrews, L. B. Gilmore,
James Bain, Jr.
Co-operation with Library Department of N. E. A.: J. C. Dana,
Melvil Dewey, F. A. Hutchins.

SPECIAL COMMITTEES.
By-Laws: H. M. Utley, W. C Lane, B. C. Steiner.
Gifts and Bequests: Reporter, George Watson Cole.
Handbook of American Libraries: F. J. Teggart, T. L.
Montgomery, C. W. Andrews.
International Catalog of Scientific Literature: John S. Billings, C.
W. Andrews, Cyrus Adler.
International Co-operation: E. C. Richardson, R. R. Bowker, S. H.
Ranck, Mary W. Plummer, Cyrus Adler.
Library Training: John C. Dana, W. H. Brett, Electra C. Doren,
Eliza G. Browning, E. C. Richardson.
Title-pages to Periodicals: W. I. Fletcher, Thorvald Solberg.
SECTIONS AND SECTION OFFICERS.
College and Reference Section: Chairman, W. I. Fletcher;
secretary, Olive Jones.
State Library Section:[K] Chairman, L. D. Carver; secretary,
Maude Thayer.
Trustees' Section: Chairman, H. M. Leipziger; secretary, T. L.
Montgomery.
Catalog Section: Chairman. A. H. Hopkins; secretary, Agnes E.
Van Valkenburgh.
Children's Librarians' Section: Chairman, Annie C. Moore;
secretary, Mary E. Dousman.
ATTENDANCE REGISTER.
Abbreviations: F., Free; P., Public; L., Library; Ln., Librarian; As.
Assistant; Ref., Reference; S., School; Com., Commission; Tr. Trustee.

Abbott, Elizabeth Lilyan, As. P. L., Cincinnati, O.
Adams, Katharine S., Ln. Adams Memorial L., Wheaton, Ill.
Adams, Zella Frances, Library Organizer, 624 Church St,
Evanston, Ill.
Ahern, Mary Eileen, Ed. Public Libraries, Library Bureau,
Chicago, Ill.
Allen, Jessie. As. P. L., Indianapolis, Ind.
Allen, Jessie M., 229 No. Topeka Ave., Wichita, Kan.
Allen, Sylvia M., As. P. L., St. Louis, Mo.
Ambrose, Lodilla, As. Ln. Northwestern Univ. L., Evanston, Ill.
Anderson, Edwin Hatfield, Ln. Carnegie L., Pittsburgh, Pa.
Andrews, Clement Walker, Ln. The John Crerar L., Chicago, Ill.
Apple, Helen, As. P. L., Milwaukee, Wis.
Applegate, Elsie, As. P. L., Indianapolis, Ind.
Bacon, Gertrude. As. P. L., Milwaukee, Wis.
Baker, Florence E., State Hist Soc. L., Madison, Wis.
Baldwin, Clara F., Ln. Minn. State L. Commission, 514 Masonic
Temple, Minneapolis, Minn.
Ball, Lucy, Ex. Ln., 210 N. Union St., Grand Rapids. Mich.
Bangs, Mary Freeman, 80 Huntington Ave., Boston, Mass.
Bardwell, Willis Arthur, As. Ln. P. L., Brooklyn, N. Y.
Bardwell. Mrs. Willis A., Brooklyn, N. Y.
Barker, Bess L., As. P. L., Portland, Oregon.
Barnard, Pierce R., As. P. L., St. Louis, Mo.
Barnes, Mrs. Clara P., Ln. Gilbert M. Simmons L., Kenosha. Wis.

Bate, Florence E., McClure, Phillips & Co., 141 E. 25th St, N. Y.
City.
Bates, Flora J., Cataloger, 7013 Yale Ave., Chicago.
Beck, Sue, Ln. P. L., Crawfordsville, Ind.
Beer, William, Ln. Howard Memorial L. and Fisk Free and P. L.,
New Orleans, La.
Bell, Martha W., Ln. P. L., Beloit, Wis.
Benedict, Laura Estelle Watson, Ln. Lewis Institute. Chicago, Ill.
Bennett, Helen Prentiss, Ln. P. L., Mattoon, Ill.
Berryman, J. R., Ln. State L., Madison, Wis.
Best, Mrs. Louise L., Ln. P. L., Janesville, Wis.
Billon, Sophie C., Ln. L. Assoc, Davenport, Ia.
Biscoe, Ellen Lord, Albany, N. Y.
Biscoe, Walter Stanley, Senior Ln. State L., Albany, N. Y.
Bishop, William Warner, Ln. Academic Dept., Polytechnic
Institute of Brooklyn, N. Y.
Blend, Belle, As. P. L., Milwaukee, Wis.
Booth, Jessie. As. P. L., Chicago, Ill.
Bowerman, George Franklin, Ln. Wilmington Inst. F. L.,
Wilmington, Del.
Bowerman. Mrs. George F., Wilmington, Del.
Bowker, R. R., Ed. Library Journal, N. Y. City.
Bradley, Isaac S., Ln. and Asst. Supt. State Hist. Soc., Madison,
Wis.
Branch, Elizabeth, Univ. of Ill. L. S., Champaign, Ill.
Brett, W. H., Ln. P. L., Cleveland, O.
Briesen, Henreiette von, Ln. P. L., Manitowoc, Wis.

Brigham, Johnson, Ln. State L., Des Moines, Ia.
Brigham, Mrs. Johnson, Des Moines, Ia.
Brigham, Mabel. As. P. L., Milwaukee, Wis.
Brown, Bertha Mower, Ln. P. L., Eau Claire, Wis.
Brown, Gertrude L., Cataloger F. P. L., Evanston, Ill.
Brown, Margaret W., Travelling L. As., State L., Des Moines, Ia.
Brown, Walter L., As. Supt. P. L., Buffalo, N. Y.
Browne, Nina E., Sec'y A. L. A. Publishing Board, 10-1/2 Beacon
St., Boston, Mass. Registrar, A. L. A.
Browning, Eliza G., Ln. P. L., Indianapolis, Ind.
Buntescher, Josephine, As. P. L., Milwaukee, Wis.
Burnet, Duncan, 701 Glenwood Av., Avondale, Cincinnati, O.
Burns, Adeline, As. P. L., Milwaukee, Wis.
Burton, Kate, Ln. P. L., Geneva, Ill.
Calkins, Mary J., Ln. P. L., Racine, Wis.
Canfield, Dr. James H., Ln. Columbia Univ. L., New York, N. Y.
Cargill, Joseph, As. P. L., Milwaukee, Wis.
Carpenter, Mary F., Ln. State Normal School, West Superior, Wis.
Carr, Henry J., Ln. P. L., Scranton, Pa., and Pres. A. L. A.
Carr, Mrs. Henry J., Scranton, Pa.
Carter, Lillian M., As. P. L., Milwaukee, Wis.
Carver, L D., Ln. State L., Augusta, Me.
Carver, Mrs. L. D., Augusta, Me.
Chapin, Artena M., 1st As. State L., Indianapolis, Ind.
Chapman, Mabel E., Ln. Milwaukee-Downer College, Milwaukee,
Wis.

Chapman, Susan, As. P. L., Milwaukee, Wis.
Chase, Adelaide M., 109 Brooks St, W. Medford, Mass.
Chase, Jessie C., As. P. L., Detroit, Mich.
Cheney, John Vance, Ln. Newberry L., Chicago, Ill.
Chipman, Kate, Ln. P. L., Anderson, Ind.
Clark, Josephine A., Ln. U. S. Dept. of Agriculture, Washington,
D. C.
Clarke, Elizabeth Porter, Ref. Ln. F. P. L., Evanston, Ill.
Clatworthy, Linda M., Cataloger P. L., Dayton, O.
Coad, Priscilla, As. P. L., Milwaukee, Wis.
Cole, Theodore Lee, ex-Trustee, 13 Corcoran Bldg., Washington,
D. C.
Colerick, Margaret M., Ln. P. L., Fort Wayne, Ind.
Cooke, Thos. F., Pres. F. L., Algona, Ia.
Corey, Deloraine Pendre, Pres. P. L., Malden, Mass.
Corey, Mrs. Deloraine P., Malden, Mass.
Cory, H. Elizabeth, Ln. Carnegie L., Lawrenceville Br., Pittsburgh,
Pa.
Countryman, Gratia A., As. Ln. P. L., Minneapolis, Minn.
Crafts, Lettie M., As. Ln. Univ. of Minnesota, Tr. P. L.,
Minneapolis, Minn.
Craver, Harrison Warwick, As. Carnegie L. Technical Science
Dept., Pittsburgh, Pa.
Crawford, Esther, Head Instructor Summer School for Librarians,
State Univ., Iowa City, Ia.
Crim, Margaret E., Clerk P. L. Com. of Indiana, Indianapolis, Ind.
Crunden, Frederick M., Ln. P. L., St. Louis, Mo.

Curran, Mrs. Mary H., Ln. P. L., Bangor, Me.
Cutter, William Parker, Chief Order Division L. of Congress,
Washington, D. C.
Dana, John Cotton, Ln. City L., Springfield, Mass.
Danforth, George F., Ln. Indiana Univ. L., Bloomington, Ind.
Davis, H. W., Milwaukee Free Press, Milwaukee, Wis.
Davis, Olin Sylvester, Ln. P. L., Lakeport, N. H.
Dean, C. Ruth, As. P. L., St Louis, Mo.
Decker, Cora M., As. Ln. P. L., Scranton, Pa.
De Moe, Claire, As. P. L., Milwaukee, Wis.
Denison, George A., C. & G. Merriam Co., Springfield, Mass.
Denton, J. H., Chairman P. L. Com., Toronto, Canada.
Dewey, Melvil, Director State L., Albany, N. Y.
Dexter, Lydia Aurelia, 2920 Calumet Ave., Chicago. Ill.
Dickey, Helene L., Ln. Chicago Normal S., Chicago, Ill.
Dill, Miss Minnie A., As. Ln. P. L., Decatur, Ill.
Dillingham, W. P., Tr. State L., Montpelier, Vt.
Dippel, Clara E., As. P. L., Indianapolis, Ind.
Dixson, Mrs. Zella A., Ln. Univ. of Chicago, Chicago.
Dockery, Mrs. E. J., F. L. Com., Boise, Idaho.
Donaldson, Allison, As. P. L., Milwaukee, Wis.
Doolittle, Hattie A., Ln. Williams F. L., Beaver Dam., Wis.
Doren, Electra Collins, Ln. P. L., Dayton, O.
Douglas, Matthew Hale, Ln. Iowa Coll. L., Grinnell, Ia.
Dousman, Mary Ella, Head Children's Dept., P. L., Milwaukee,
Wis.

Downey, Mary E., As. Ln. Field Columbian Museum, Chicago.
Drummond, Mary, Tr. Adams Memorial L., Wheaton, Ill.
Dudley, W. H., As. Ln. Univ. of Wisconsin, Madison, Wis.
Durham, Josephine E., Ln. P. L., Danville, Ill.
Dwight, Agnes L., Ln. F. P. L., Appleton, Wis.
Earl, Mrs. Elizabeth C., P. L., Com. of Indiana, Connersville. Ind.
Eastman, Linda A., Vice-Ln. P. L., Cleveland, O.
Eastman, William Reed, Inspector P. L. Dept., State L., Albany,
N. Y.
Eaton, Harriet L., As. P. L., Oshkosh, Wis.
Elliott, Carrie. Ref. Ln. P. L., Chicago.
Elliott, Julia E., Ln. P. L., Marinette, Wis.
Ellison, Mrs. Annette C., Children's Ln. P. L., Minneapolis, Minn.
Elrod, Jennie, Ln. P. L., Columbus, Ind.
Engle, Emma R., As. F. L., Philadelphia, Pa.
Ensign, Katherine W., 404 E. 2d St., Duluth, Minn.
Evans, Mrs. Alice G., Ln. P. L., Decatur, Ill.
Faddis, Miss Zoe, As. Chicago S. of Education L., Chicago.
Fairbanks, May L., Ln. Cornell Coll., Mt. Vernon, Ia.
Fatout, Nellie B., Ln. P. L., Elwood, Ind.
Faxon, Frederick Winthrop, Manager Library Dept., The Boston
Book Co., Boston, Secretary of A. L. A. (address 108 Glenway
St., Dorchester, Mass.)
Faxon, Mrs. F. W., Dorchester, Mass.
Felt, Anna E., Financial Secy. Board of Library Directors, Galena,
Ill.

Fernald, Helen Augusta, 384 Adams St., Dorchester, Mass.
Ferrell, Cullom Holmes, Washington, D. C.
Ferrell, L. C., Supt. of Documents, Washington, D. C.
Ferrell, Mrs. L. C., Washington, D. C.
Field, Walter T., Library Dept. Ginn & Co., 378 Wabash Ave.,
Chicago, Ill.
Field, Mrs. Walter T., Chicago, Ill.
Fitzgerald, Eva M., Ln. P. L., Kokomo, Ind.
Fletcher, William I., Ln. Amherst Coll. L., Amherst, Mass.
Flint, Col. Weston, Ln. P. L. of the District of Columbia,
Washington, D. C.
Forstall, Gertrude, As. The John Crerar L., Chicago, Ill.
Foss, Sam Walter, Ln. P. L., Somerville, Mass.
Foster, Mary Stuart, As. Wis. State Hist. Soc., Madison, Wis.
Foye, Charlotte H., As. The John Crerar L., Chicago, Ill.
Frame, Hon. A. J., Waukesha, Wis.
Frame, Walter, Waukesha, Wis.
Freeman, Marilla Waite, Ln. P. L., Michigan City, Ind.
Gainer, Mrs. C. A., Ln. State L., Boise, Idaho.
Galbreath, C. B., Ln. State L., Columbus, O.
Gale, Ellen, Ln. P. L., Rock Island, Ill.
Ganley, Marie, Cataloger P. L., Detroit, Mich.
George, Helene Thekla, Ln. F. P. L., Sioux Falls, S. D.
Gerould, James Thayer, Ln. Univ. of Missouri L., Columbia, Mo.
Glatfelter, Mr. J. H., L. Bldg. Committee, State Normal School,
Emporia, Kan.; Supt. City School, Atchison, Kan.

Godard, George S., Ln. State L., Hartford, Conn.
Goding, Sarah E., As. Ln. F. L., Philadelphia, Pa.
Goldberger, Ottilie, Clerk P. L., Chicago, Ill.
Gould, H. A., L. Dept. A. C. McClurg & Co., Chicago, Ill.
Goulding, Philip S., Head Cataloger Univ. of Missouri L.,
Columbia, Mo.
Gove, Hon. P. L., Mayor, Waukesha, Wis.
Graham, Emma, Ln. P. L., Sidney, O.
Gray, John H., Tr. Northwestern Univ. L., Evanston, Ill.
Greene, Janet M., Organizer, 4812 Indiana Ave., Chicago.
Gunthorp, Pauline, As. The John Crerar L., Chicago, Ill.
Hackett, Irene A., Ln. Y. M. C. A. L., Brooklyn, N. Y.
Hafner, Alfred, Bookseller, 9 E. 16th St, New York, N. Y.
Hafner, Mrs. Alfred, New York, N. Y.
Haines, Helen E., Managing Ed. Library Journal, N. Y. City.
Recorder A. L. A.
Hall, Howard J., Ln. Univ. of Arizona L., Tucson, Ariz.
Haller, F. L., Trav. L. Commissioner, care Lininger & Metcalf Co.,
Omaha, Neb.
Hamilton, Ella A., Ln. P. L., Whitewater, Wis.
Hanna, Belle S., Ln. P. L., Greencastle, Ind.
Hanson, James Christian Meinich, Chief Catalog Division, L. of
Congress, Washington, D. C.
Hardy, E. A., Sec. P. L., Lindsay, Ont.
Harpole, Minnie P., As. Ln. Library Bureau, Chicago.
Harris, George William, Ln. Cornell Univ. L., Ithaca, N. Y.

Harrison, Joseph Le Roy, Ln. Providence Athenæum, Providence,
R. I.
Harter, Lyle, Ln. P. L., Huntington, Ind.
Hartswick, Howard B., 1st As. State L., Harrisburg, Pa.
Hartswick, Mrs. Jennie Betts, Clearfield, Pa.
Hawley, Emma A., As. Ln. State Hist Soc., Madison. Wis.
Hawley, Mary E., As. Cataloger The John Crerar L., Chicago, Ill.
Hayes, Rutherford Platt, Asheville, N. C.
Henderson, Mrs. Kate A., Ln. P. L., Joliet, Ill.
Henneberry, Kate M., As. Ln. P. L., Chicago.
Hensel, Martin, Ln. P. School L., Columbus, O.
Henry, W. E., Ln. State L., Indianapolis, Ind.
Hild, Frederick H., Ln. P. L., Chicago, Ill.
Hill, Cora M., Supt. Circulating Dept. F. P. L., Evanston, Ill.
Hill, Prof. J. H., Latin Professor; Chairman L. Committee, State
Normal School, Emporia, Kan.
Hilligoss, Gertrude, As. P. L., Indianapolis, Ind.
Hine, J. W., Art Metal Construction Co., Boston.
Hine, Mrs. J. W., Boston.
Hoagland, Merica, L. Organizer of Indiana, Office of P. L. Com.,
State House, Indianapolis, Ind.
Hock, Mrs. Maggie, Kokomo, Ind.
Hodges, Nathaniel Dana Carlile, Ln. P. L., Cincinnati, O.
Hoover, Anna F., Ln. P. L., Galesburg, Ill.
Hopkins, Anderson Hoyt, As. Ln. The John Crerar L., Chicago, Ill.
Horne, Miss Lulu, As. City L., Lincoln, Neb.

Hornor, Martha, As. P. L., Milwaukee, Wis.
Hosmer, Prof. James Kendall, Ln. P. L., Minneapolis, Minn.
Hostetter, A. B., Supt. and Sec'y Illinois Farmers' Institute,
Springfield, Ill.
Hostetter, Mrs. A. B., Springfield, Ill.
Hough, Georgia Rodman, Ln. P. L., Madison, Wis.
Howard, Clara E., Student Univ. of Ill. L. S., Champaign, Ill.
Howey, Mrs. Laura E., Ln. Hist. Dept. State L., Helena, Mont.
Hoyt, Jessie F., As. P. L., Eau Claire, Wis.
Hubbard, Anna G., Ref. Ln. State L., Indianapolis, Ind.
Hubbell, Jennie P., Ln. P. L., Rockford, Ill.
Huse, Hiram A., Ln. State L., Montpelier, Vt.
Hutchins, Frank A., Sec. Wisconsin F. L. Commission, Madison,
Wis.
Hyer, F. S., Agent Houghton, Mifflin & Co., 378 Wabash Ave.,
Chicago, Ill.
Iles, George, Journalist, Park Ave. Hotel, N. Y. City.
Ingalls, Jennie, Ln. P. L., Fort Madison, Ia.
Johnson, Mary Hannah, Ln. Howard L., Nashville, Tenn.
Jones, Elizabeth D., Pasadena, Cal.
Jones, Gardner Maynard, Ln. P. L., Salem, Mass. Treasurer A. L.
A.
Jones, Mary Letitia, Ln. P. L., Los Angeles, Cal.
Jones, Olive, Ln. Ohio State Univ. L., Columbus, O.
Josephson, Aksel Gustav Salomon, Cataloger The John Crerar L.,
Chicago, Ill.
Jutton, Emma R., Reviser Univ. of Ill. L. S., Champaign, Ill.

Kautz, F. R., Tr. Butler Coll. L., Irvington, Ind.
Kealhofer, William, Tr. Washington Co. F. L., Hagerstown, Md.
Keefer, Jessie G., As. P. L., Scranton, Pa.
Kellogg, Myra, As. P. L., Indianapolis, Ind.
Kelso, Tessa L., with Baker, Taylor Co., N. Y. City.
Kennedy, John Pendleton, L. of Congress, Washington, D. C.
Keogh, Andrew, Ln. Linonian & Brothers L., Yale Univ., New
Haven, Conn.
Kercheval, Margaret McE., 1st As. Howard L., Nashville, Tenn.
Kerr, Willis Holmes, Acting Vice-Pres. Bellevue Coll., Bellevue,
Neb.
Knudson, Signa, As. P. L., Milwaukee, Wis.
Kohler, Minnie, Ln. P. L., Moline, Ill.
Krengel, F. W., Adv. Dept. Public Libraries, Library Bureau,
Chicago, Ill.
Kroeger, Miss Alice Bertha, Ln. Drexel Inst. L., Philadelphia, Pa.
Lamb, Mary J., As. P. L., Fond du Lac, Wis.
Lane, Harriet, Ln. P. L., Freeport, Ill.
Lane, Lucius Page, As. P. L., Boston, Mass.
Langton, Joseph F., As. Ln. P. L., St. Louis, Mo.
Larson, Charles A., As. P. L., Chicago.
Lawson, Publius V., Vice-Pres. L. Board, Menasha, Wis. Pres. Fox
River Valley L. Assoc. Pres. Winnebago County Board of
Libraries.
Leach, Davis Parker, Ln. L. Assoc., Portland, Ore.
Leavitt, Charlotte D., Ln. McClymonds P. L., Massillon, O.

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