THE BALANCED SCORECARD
The balanced scorecard, as described by Kaplan nd Norton, is an attempt to enhance existing performance measurement systems by extending its use as a strategic management tool. "The objectives and the measures for the balanced scorecard are more than just a somewhat ad hoc collection of financial and nonfinancial performance measures; they are derived from a top-down process driven by the mission and strategy of the business unit." They point out that the measures must be a balance between the external measures for shareholders and customers, and internal measures for management. They advocate the use of the balanced scorecard as a "strategic management system." 
The framework for the balanced scorecard is shown in Figure 1 and includes the following elements:
• Clarifying and translating the vision and strategy
• Communicating and linking strategic objectives and
• Planning and target setting
• Strategic feedback and learning.
Each of these objectives is related and essential to the continuing success of the business.
Kaplan and Norton also provide a framework to translate a strategy into operational terms, as shown in Figure 2. This framework provides measures of the following types: financial, customer, internal business process, and learning and growth. In this paper, I will not describe the balanced scorecard; it is better for the reader co get this information from the referenced book. One of the key steps in implementing the balanced scorecard system is to select and design measures, referred to as Task 6 in the appendix of the book, Building a. Balanced Scorecard. I will attempt to show how the use of key indicators is a way to get employee participation in the selection and evaluation of the performance measures.
WHAT ARE KEY INDICATORS?
Imagine a factoiy with one machine that makes all of the production for the plant. When it works, it makes a loud thump every time it makes a good piece; when it is not working, there is no thump. The plant manager knows immediately when there is a problem because the machine stops thumping, and he or she can take action to correct the situation. Ever}' business operation has one or more thumping machines that indicate how things are going; the trick is to find out what they are and how to measure them. These thumping machines are the key indicators of a business.
Key indicators, for the purposes of this paper, are planning and performance measures that answer most of the criticisms listed above. They have many worthwhile attributes, in that they
• Provide physical measures as well as financial
• Can be used as both planning and performance measures
• Can be used at all levels of the organization
• Can be adapted for use across the organization
• Are easy to understand and report
• Are easy to change as measurement needs change
• Can focus on improvement, not just control
• Can be assigned different priorities
• Can be selected by the persons being measures, to
gain acceptance and use
• Can be used as common measures for different functions to stimulate cross-functional relationships.Key indicators can alleviate some negatives of today's measure. However, they do not eliminate the need for good performance; they only measure it.
To Be Continued