The handwriting is on the wall. The earlier era of measurement-based mangement was focused on industrial production. In operations such as automobile production, there are numerous tangible, repetitive processes that can be precisely measured and monitored. In private companies, profit or the 'bottom line' is the ultimate indicator of success, and earnings are carefully watched. This is the dial that senior staff are constantly watching.
Financial data are precise and objective.
However, they do not tell the whole story of a company's health. What we would like to have are some leading indicators to get an idea of what may be ahead. Lacking these, companies often drive straight ahead in the fog and suffer the consequences. The balanced scorecard offers an alternative to the traditional financial indicators. It describes and explains what has to be measured in order to assess the effectiveness of strategies.