The Balanced Scorecard

From the beginning, it is important to understand why measuring an organization's performance is both necessary and vital. An organization operating without a performance measurement system is like an airplane flying without a compass, a Formula One race car driver guiding his car blindfolded, or a CEO operating without a strategic plan. The purpose of measuring performance is not only to know how a business is performing but also to enable it to perform better. The ultimate aim of implementing a performance measurement system is to improve the performance of an organization so that it may better serve its customers, employees, owners, and stakeholders. If one " gets " performance measurement right, the data generated will tell the user where the business is, how it is doing, and where it is going. In short, it is a report card for a business that provides users with information on what is working well and what is not. With this in mind, Chapter 1 provides an overview of the various performance measurement systems used today by enterprises to drive improvements in overall organizational performance. A performance measurement system enables an enterprise to plan, measure, and control its performance according to a pre-A performance measurement system enables an enterprise to plan, measure, and control its performance according to a pre-defined strategy Balanced Scorecard for State-Owned Enterprises 2 defined strategy. In short, it enables a business to achieve desired results and to create shareholder value. The major performance measurement systems in use today are profiled below (in order of global adoption) and include