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HarperBusiness, 1993).
5 . Industrial age companies used traditional production and service delivery processes to supply different models and options to diverse consumers. This high-cost approach was not made visible until the development of activity based cost systems in the mid-1980s; see R. Cooper and R. S. Kaplan, “Measure Costs Right: Make the Right Decisions,”
Harvard Business Review
(September–October 1988): 96–103. Now companies recognize they must either achieve greater focus in the customer segments they choose to serve or deploy technology-based product and service delivery processes that enable high-variety outputs to be supplied at low resource costs.
6 . J. L. Bower and C. M. Christensen, “Disruptive Technologies: Catching the Wave,”
Harvard Business Review
(January–February 1995): 43–53.
7 . R. S. Kaplan and A. Sweeney, “Romeo Engine Plant,” 9-194-032 (Boston: Harvard Business School, 1994).
8 . R. K. Elliott, “The Third Wave Breaks on the Shores of Accounting,”
Accounting Horizons
(June 1992): 61–85.
9 . R. Simons,
Levers of Control: How Managers Use Innovative Control Systems to Drive Strategic Renewal
(Boston: Harvard Business School Press, 1995), 20.
10 . For an extensive discussion of single-and double-loop learning in management processes, see Chris Argyris and Donald A. Schön,
Organizational Learning II: Theory, Method, and Practice
(Reading Mass.: Addison-Wesley, 1996); and “Teaching Smart People How to Learn,”
Harvard Business Review
(May–June 1991): 99–109.

THE BALANCED SCORECARD
    The Balanced Scorecard provides executives with a comprehensive framework that translates a company’s vision and strategy into a coherent set of performance measures. Many companies have adopted mission statements to communicate fundamental values and beliefs to all employees. The mission statement addresses core beliefs and identifies target markets and core products. For example,
To be the most successful company in the airline business.

To be the best broad-based financial institution in our chosen markets.
    Mission statements should be inspirational. They should supply energy and motivation to the organization. 6 But inspirational mission statements and slogans are not sufficient. As Peter Senge observed: “Many leaders have personal visions that never get translated into shared visions that galvanize an organization. What has been lacking is a discipline for translating individual vision into shared vision.” 7
    As a specific example, Norman Chambers, the chief executive officer of Rockwater, an undersea construction company, led a two-month effort among senior executives and project managers to develop a detailed mission statement. Shortly after distributing this mission statement, Chambers received a phone call from a project manager on a drilling platform in the middle of the North Sea. “Norm, I want you to know that I believe in the mission statement. I want to act in accordance with the mission statement. I’m here with my customer. What am I supposed to do? How should I be behaving each day, over the life of this project, to deliver on our mission statement?” Chambers realized that there was a large void between the mission statement and employees’ day-to-day actions.
The Balanced Scorecard translates mission and strategy into objectives and measures, organized into four different perspectives: financial, customer, internal business process, and learning and growth. The scorecard provides a framework, a language, to communicate mission and strategy; it uses measurement to inform employees about the drivers of current and future success. By articulating the outcomes the organization desires and the drivers of those outcomes, senior executives hope to channel the energies, the abilities, and the specific knowledge of people throughout the organization toward achieving the long-term goals.
    Many people think of measurement as a tool to control behavior and to evaluate