-: Well I started working on what has come to be called the balanced scorecard back in 1990 through David Norton, the management consultant. The problem we addressed there was the limitations of financial measures that are in companies' financial reports, the income statement, balance statement of cash flows. And these are fine, they're wonderful statements, I teach them, and I believe in them. But I also know their limitations. They are reporting on past events, and they worked especially well in the kinds of companies we had in the 19th century, which were based on physical assets. We were building steel mills, we were building machine tools, or later automobiles. So financial statements work very well with tangible and financial assets. By 1990 you could see that the most valuable assets the companies had were their people and their customer relationships and their innovation, what accountants call their intangible assets. Now accountants think because they've given it a name that it's dealt with, but the name the accountants use to describe these assets is defining them by what it's not. Intangible assets means they're not tangible. In fact, when companies spend money to enhance their intangible assets, training employees, improving processes, developing new products, creating customer loyalty, the financial accountants say, "Oh, "that cost you money this period, "it's an expense. "You're worth less", when in fact they're worth more because they are improving the capabilities that are driving future value. Now I believe that if you don't measure something you can't manage it. And if we're failing to measure how well we're doing with our most important assets, we're probably not managing them very well, and that's the motivation for the balanced scorecard. Now we may not be able to measure them in financial terms, how much does a person work? How much is this new product worth? How much is a five percent increase in customer loyalty worth? That's difficult if not impossible. But I can quantify it. I can measure customer loyalty, I can measure the innovativeness of new products, I can measure the quality of processes, I can measure skills of employees. And so the balanced scorecard gave us a structured, comprehensive framework for measuring all the important assets and capabilities that an organisation has. The important insight is that the financial system cannot quantify the value of customers, innovation processes, people, systems, and even culture, but we can measure it, and by measuring it make it more manageable, and we think therefore direct companies are spending much better to enhance current and future capabilities.