The Balanced Scoreboard.

• Author: Bryne, Vincent J.

Reviewed by Vincent J. Byrne, former director of the finance and management division of Fairfax County Water Authority in Virginia.

The Balanced Scorecard describes a methodology to improve the way senior executives measure the performance of their organization. The authors' approach, which involves balancing short-term objectives with long-term strategies as an organization strives to achieve its mission, is summarized as follows: "The Balanced Scorecard provides the management system for organizations to invest in the long term - in customers, in employees, in new product development, and in systems - rather than managing the bottom line to pump up short-term earnings. It will change the way you measure and manage your business or organization."

My initial reaction to the book was negative on two grounds. First, I thought, "Just what we need - one more self-help book and methodology for improving the organization." Second, it seemed impossible for any long-term strategy to be realistic in the public sector in today's climate - a climate totally focused on the short term (i.e., reducing the costs of government and lowering taxes). Upon reflection, however, I appreciated how refreshing it is to contemplate a performance-based system that combines the short-term and the long-term into one balanced approach.

The authors' formalized system for examining an organization uses performance criteria and measurements in four major areas: financial, internal business processes, customers, and learning and growth. An organizational strategy focused on these areas should be developed as a first step based on the organization's mission. After the strategy is established, a comprehensive and meaningful array of performance measurements can be developed. The authors contend that most organizations concentrate on existing processes while not focusing on processes that are truly strategic and will benefit the organization in the long term.

The audiences intended for this book are the senior executives and governing boards of organizations. The balanced scorecard message transcends the executive level because an organization's agenda usually is developed by the board. If the agenda is short-term -...