[Music] welcome to HSM special today I have the honor to have with us here Dr Robert Kaplan as you know Dr Kaplan has been developing together with some other authors and consultant very important tools for management the the most known are thec cting in the balance score card Professor K is graduated and obtaining his master degree in electric engineering from MIT and has a PHD in operation research from Cornel University he is a chairman of the Paladium group and of course a well-known author of several management books so Professor Klan welcome nice to have you
here nice to be with you very good so could you in uh in brief words what is really the balance to scorecard what is it for and uh how it came to your mind how do you research and decided that these would be important tool for companies and now for government well I recognized in the 1980s that the financial measurements by themselves were insufficient to guide companies to success that they were really measures of a past strategy and past performance but didn't provide indicators of the future so many companies might be creating a great deal
of value by creating better customer Relationships by being better quality and delivering on time and by attracting and retaining terrific employees and giving them the skills they need uh to create more value for customers but if you didn't measure those things you weren't sure uh you know are you really achieving that and in the short run companies could report better financial performance by cutting back on training employees by not maintaining equipment by not improving processes and by alienating customers not investing in customer relationships and so we wanted to come up with a broader set of
indicators that would better reflect the total value creation that companies experienced in a period and we didn't want to throw away financials they're still important they measure success ultimately but we needed to supplement them with metrics about what the best companies were doing in the short term to create future value and so those were measures related to customer relationships it was measures related to process Improvement and Innovation and measures related to employee capabilities and motivation so you can think about the balance scorecard as a more robust uh General set of measurements that goes beyond the
financials to capture the drivers of future value creation who who was your first customer that applied successfully uh the BSC well the first uh set of companies that came to us right after our article was published were uh we there was a engineering construction company uh division of halberton uh for how to guide underwater construction projects with their targeted customers like shell and British Petroleum we worked with a major insurance company signal Property and Casualty Insurance we worked with a major Bank in New York City then called chemical bank and then emerged with uh uh
Chase Bank and also mobile mobile marketing refining in the US so I would say those were the the top five companies Pioneers yeah they were the Pioneers uh in fact in our first book we talked about mobile we called it Pioneer petroleum right to recognize that but that was really mobile
