Leadership and the Balanced Scorecard [Bob S. Kaplan, Professor at Harvard Business School] Bob S. KAPLAN: We introduced the balanced scorecard in about 1990, 1991. Within a few years, several companies had gone forward and implemented the system with quite a bit of success. I went back to do some research on these early adopters and learned that the CEOs of two of these early adopters were former Marine officers. Now, I used to be an engineer. And when I was an engineer, if you got one unusual result, you attributed it to experimental error. But two was an example of a new theory. And I thought, wow, there must be some interesting theory here. That's too much of a coincidence. So I went back to both of those CEOs and told them about each other and asked them, was there anything about their former life in the Marines that led them to adopt the balanced scorecard, this performance measurement system so effectively in their organizations? And both of them gave me the same answer. They hadn't thought of it until I mentioned it, but they said the number one responsibility for any Marine officer is communication. When they send the soldiers into battle, the general is not there with them. And soldiers are typically doing a very hazardous assignment. And despite doing a ton of planning, whatever they planned doesn't happen. The lieutenant gets shot, the equipment is dropped off in the wrong spot, the enemy is in a different position. And the troops can't call back and say, hey boss, it ain't working. What should I do now? And they said, before we sent any soldier into battle, we make sure every one of them knows the mission and the objectives. That's our number one priority. And then in the heat of battle, they regroup and they do what's necessary to achieve the mission and the objectives. And it's very interesting. When these former Marine officers became high level executives, they were looking for a similar tool to get every employee in the organization aware of what the mission and the objectives are. Because when a customer comes in for a transaction or when an employee is operating a very complex manufacturing process, the CEO is not there, and he or she is dependent upon that employee understanding not what they're supposed to do but what they are there to accomplish, how they can contribute to the success of the organization. And so these two CEOs found the balanced scorecard a very powerful and useful system to help them clearly communicate mission and objectives to every employee so that they all could understand it and they could all participate in helping the organization to accomplish its strategic objectives.