communication & collaboration: personal impact

Management Learning Not Management Control: THE TRUE ROLE OF

PERFORMANCE MEASUREMENT?

Andy Neely Mohammed Al Najjar

M any people express simplified assumptions about the role of measurement in organizations. Homilies, such as "you get what you inspect, not what you expect," implicitly assume that the primary role of performance measurement is to pro-

vide managers with a means of control.' The continuing interest in the field, however, suggests that there must be more to performance measurement than this. For while management control is important, it is hardly the stuff of revolu- tion. Yet there is no better way than revolution to describe the current turmoil in organizations in terms of their performance measurement systems. One such system, the balanced scorecard, has swept the world."̂ The Gartner Group, the U.S.-based research consultancy, predicted that 60% of large U.S. firms had adopted the balanced scorecard by the end of 2001. Major ERP vendors, such as Oracle and SAP, launched balanced scorecard reporting modules for their software in 2000. Survey data suggest that in the five years prior to 2000, around 50% of companies attempted to transform their organizational perfor- mance measurement systems, while more recent data indicate that 85% of orga- nizations will have performance measurement initiatives underway by the end of 2004.^ Similar data can be found in Europe. The Conference Board reported that approximately three quarters of the European companies that they studied had changed their measurement systems in the last three years and that the majority expeaed to continue to change their measurement systems in the future.'* In the late 1990s, interest in performance measurement and the bal- anced scorecard was relatively limited in Asia. Now, however, there is growing anecdotal evidence that the topic is taking off there as well.^

These observations raise a fundamental question. Namely, why is there such a high level of interest in performance measurement globally? Many people recognize and acknowledge the shortcomings of the performance

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Management Learning Not Management Control: Th(_

measurement systems traditionally used by firms.^ However, authors have writ- ten about these since the early 1980s^ and before.** So what is new about these recent developments? One of the themes that emerges in the current literature is that performance measures have hidden value. They can support managers [and other organizational members] as they seek to clarify strategy, communi- cate strategy, and challenge assumptions.^

Measures as a Means of Challenging Assumptions

While the practitioner community has concentrated on measurement as a means of clarifying and communicating strategy, members of the academic com- munity have argued that measurement plays another role. The data produced as a result of performance measurement can be used to challenge the assumptions that managers hold about how their businesses operate. A particularly powerful technique for facilitating this is strategy mapping.'^ Strategy maps are cause- effect diagrams that seek to make explicit the links between different perfor- mance measures, effectively mapping the management team's theory of how their organization operates.

Take, for example, a consulting firm pursuing a strategy of customer inti- macy, based on the assumption that stronger relationships with clients will result in high levels of repeat business and hence higher revenues. One way of build- ing strong relationships with clients is to adopt a key account management structure and assign individual partners to look after specific clients. Clearly this is a simplified business model, but the underlying logic is clear. Assigning part- ners to manage individual client relationships should result in deeper relation- ships between the firm and its clients. In turn these deeper relationships should allow the firm to understand the needs of its clients better and hence deliver better service. The delivery of better service will result in higher levels of cus- tomer satisfaction and retention. Higher levels of customer retention should lead to repeat business and hence higher revenues.

It is important to understand that this business model is just a model. It is based a series of assumptions that might not be valid. Authors already recognize that aligning measures to strategy is important, because measures affect the way people behave.^' Now, however, authors also recognize that measurement data can be used to challenge the assumptions that are inherent in the strategy itself.'-

In effect, this notion of using measurement data to challenge assumptions is akin to Chris Argyris's concept of double-loop learning, which involves learn- ers questioning their assumptions and theories.'^ While appealing, there are few practical examples in the public domain of organizations using their mea- surement data in this way. Indeed the authors of this article have only identified a handful of related studies reported in the literature, most of which concern the retail industry and many of which build on the service-profit chain."* The first, a study by Rucci et al , concerns the efforts of Sears to build an employee- customer-profit chain.'^ Using econometric analysis techniques, such as causal

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.gement Control: The True Role of Performance Measurement?

pathway modeling, Rucci et al. conclude that for Sears, a "5 point improvement in employee attitudes will drive a 1.3 point improvement in customer satisfac- tion, which in turn will drive a 0.5% increase in revenue growth." Barber et al. conducted a similar study using data gathered from a large UK retail chain. They concluded that a 1% increase in employee commitment could lead to a monthly increase of up to £200,000 in sales per store.'^ Silvestro reports a third study, again in the retail sector. Silvestro's study draws on data collected from 15 stores in one of the UK's four largest supermarket chains and reveals interesting nega- tive correlations between employee satisfaction and measures of productivity, efficiency, and profitability. Negative correlations are also found between employee loyalty and both productivity and profitability. Silvestro contends that the reason for these unexpected negative correlations is the exogenous variable—store size—that has an impact on all of the performance dimensions included in the analysis.'^

Banker et al.'s study is based on 72 months' worth of data from 18 hotels managed by a hospitality firm and concludes that not only is customer satisfac- tion a good predictor of future financial performance, but also that the measure itself contains some important additional information not reflected in past financial Andy Neely is Deputy Director of the UK's measures.'^ Ittner and Larcker's study also Advanced Institute of Management Research, c J 1̂ . J. . . • • 1 a Professor at Cranfield School of Management, finds that customer satisfaction is positively ^^^ ^ .̂̂ ^̂ .̂ g p^^^^^^^^ ̂ ^ London Business associated with future accounting perfor- School. mance, but notes a ceiling on financial ^r. Mohammed Al Najjar is a General Manager returns beyond which the additional invest- with the Amiantit Group. ments required to increase customer satisfac- tion are not outweighed by the subsequent financial returns. Additionally, Ittner and Larcker note threshold levels for customer satisfaction and argue that only when these are passed do financial returns accrue to the business.'"^

The study by Campbell et al. is the one most closely aligned with the research reported in this article.^'^ They set out to explore whether measurement data could be used to assess the effectiveness of strategies in practice. Again, they used data drawn from the retail sector. The firm they studied had recently decided to move from an operating efficiency to a differentiation strategy and then back again. Campbell et al. used the data gathered by this firm to test the effectiveness of these two strategies and concluded that measurement data can be used to test the effectiveness of organizational strategies.

Research Methodology

This research adopted a three-phase methodology to explore the ques- tion: Can managers use measurement data to challenge the assumptions inher- ent in their business model? A variety of senior managers in British Airways were interviewed in the first phase. These interviews enabled the researchers to gain a broad insight into the activities of the company and to understand in depth the measurement data that were available within it. Data on the

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Management Learning Not Management Control: Th<

T A B L E I . Research Methodology Adopted

Phase Aims Activity Data Sources

Phase To gain an understanding of the organization, the industry and the competitive environment

To identify the measurement systems that existed W\XU\r\ the organization and the data contained in them.

Multiple interviews with key informants.

Interviewees included: Finance and Investor Relations Manager, Market Information Manager, Performance Measurement Manager and Strategy and Planning Manager

Phase 2 To gather five year's worth of quantitative data from the sources identified in phase I.

Analysis of existing measurement systems within the organization.

Data from financial system and external agencies that hold the customer and employee satisfaction data for the business.

Phase 3 To analyze and interpret these data in collaboration with the members of British Airways to ensure a robust and well- grounded analysis.

Data analysis followed by workshops and interviews to further guide and enrich the analysis process.

Series of workshops.

Interviews with 38 customers and 14 members of cabin crew staff to explore findings.

business's financial performance, customer satisfaction, and employee satisfac- tion for a five-year period were accessed and investigated in the second phase. The third phase involved iterative analysis and discussion of these data, the aim of which was to build a robust and well-grounded theory about what was hap- pening in the organization. At regular intervals, the researchers supplemented this quantitative approach with interviews and discussions of a more qualitative nature, deliberately designed to provide insights into the robustness of the grounded theory about the business that the researcher and managers were collaboratively developing. Table 1 summarizes the phases of this research and details the rationale for each one.

Phase 1: British Airways—Background and Context British Airways is one of the world's leading airlines, employing over

60,000 people and servicing more than 200 destinations worldwide. The com- pany's strategy throughout the 1990s was to compete on service, in an industry dominated by companies that compete on price. Sir Colin Marshall, former Chairman of British Airways, is quoted as saying:

"You're always going to he faced with the fact that the great majority of people will buy on price. But even for a seeming commodity, such as air travel, an ele- ment of the traveling public is willing to pay a slight premium for superior service. They arc the people we've been trying to attract and retain as customers. We don't just mean people who fly business class, first class, or the Concorde. Many service companies ignore the fact that there are also plenty of customers in the lower end of the market who are willing to pay a little more for superior service. It all comes back in the end to value for money. If you can deliver something

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.i_aiM..ig laiiagement Control: The True Role of Performance Measurement?

extra that others are not or cannot, some people will pay a slight premium for it."-'

Underpinning British Airways' strategy is the assumption that the deliv- ery of excellent service will result in higher levels of customer retention and hence profitability (if the right customers are retained). The business encapsu- lated this philosophy in its mission statement, which was to ensure that British Airways is the customer's first choice through the delivery of an unbeatable travel experience. As Marshall acknowledges, delivering an unbeatable travel service relies heavily on the performance and attitude of the airiine's employees.

"We strongly believe that to deliver consistent service quality, our employees must understand their role in delivering superior service and must have the power to deal with customer problems."^^

To understand what constituted "superior service" for its customers, British Airways conducted a significant program of market research. Through 400 focus groups and associated interviews, the airline identified eight "moments of truth" that had the potential to influence the customer's percep- tion of service. These "moments of truth" included: ticket purchase, check-in service, departure, aircraft condition, in-flight service, meal rating, baggage claim, and executive club membership.

Phase 2: Data Collection The next stage of the research involved exploring each of the moments of

truth and establishing the most appropriate measures of performance for them. The company made data available for the time period January 1992 to March 1997. The specific data made available are listed in Table 2, which also shows their relationship to the eight moments of truth.

Phase 3: Data Analysis and Interpretation The moment-of-truth approach adopted by British Airways implicitly

assumes that each interaction passengers have with the airline has an equal influence on overall customer satisfaction. The first round of analysis sought to test this assumption. The researchers accessed data on: calls answered within 20 seconds, check-in service, departure on-time, cabin crew service, and meal rat- ing. These five factors were correlated with overall customer satisfaction and with one another (see Table 3). As Table 3 shows, a statistically significant rela- tionship exists between overall customer satisfaaion and three factors: check-in service, cabin crew service, and meal rating.

However, when only the three significant factors—check-in/service, cabin crew service and meal rating—are regressed onto overall customer satisfaction, the only factor that emerges with a significant coefficient is cabin crew service:

Overall Customer Satisfaction = 0.553XCabin Crew Service-1-21.94

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T A B L E 2. Data Made Available By British Aii^ays

Financial Performance

Customer Retention

Customer Satisfaction

Answering Calls Quickly

Check-In Service

Departure on Time

Aircraft Condition

Cabin Crev*/ Service

Meal Rating

Short-Handed Baggage

Executive Club

Employee Satisfaction

Quarterly data on sales revenues were made available to the research team. Monthly data and net yield per revenue passenger kilometer were also released.

Intention to repeat purchase and willingness to recommend were captured through consumer audit questionnaires (issued to passengers waiting for baggage) and in-flight surveys.

Customer perspectives of service were captured through consumer audit questionnaires and in-flight surveys.

This measure tracks the percentage of calls answered in less than 20 seconds by reservations/sales staff. Data are captured automatically via the telephone system.

This IS an overall measure of the services offered to customers during the check-in process. It includes the feedback from the customers on the procedures for managing check-in queues, the waiting time in the queue, the speed of the check-in process when the front of the queue is reached, and the manner of the check-in staff.

The industry's standard measured as the percentage of flights departing within 15 minutes of schedule.

This is a regular investigation of the interior condition of the aircraft conducted by a team of qualified engineers.The process includes identification of any faults in the cabin, e.g., condition of seats as well as cleanness of the aircrafL

This measure covers three main cabin services: namely, the manner of the cabin crew (i.e., making the customer feel special and valued), attitude of cabin crew towards serving customers, and pace of cabin crew service.

This measures the taste of the food and the quantity offered.

Overall loss rate of baggage measured per 1000 passengers This includes reporting mishandling and damage of baggage.

The feedback is obtained from passengers who are members of this club about the Airline's performance on the various services offered to them.

Employee satisfaction is tracked through employee input surveys consisting of approximately 70 questions. Eleven such surveys were conducted between 1992 and 1997. There were made available to the research team.

As cabin crew service appeared to have such an important relationship with customer satisfaction, the next phase of analysis involved exploring the relationship between cabin crew service and the remaining four factors more fully. The results of the correlation analysis, which are shown in Table 4, demon- strate that both check-in service and meal rating are positively correlated with cabin crew service. Intuitively, this observation makes sense. Many passengers do not deal with the airline directly when purchasing tickets—either because their office buys tickets for them or they deal with a travel agent. Effectively the first time most passengers "touch" the airline will be at check-in. If check-in is a positive experience—i.e., the queue is not too long, the passenger is allocated

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T A B L E 3. Drivers of Customer Satisfaction (Pearson Correlation Significance. I-tailed)

, Overall customer satisfad:ion [OCS] ' excellent or very good %

Meal rating [MR] excellent or very good %

Cabin crew service [CCS] excellent or y^ry good %

Departure on Time [DOT1%

Check-in service [CIS] excellent or very good %

Calls answered [CA] < 20 seconds %

OCS

1,000 NA

MR

0.424 .001**

1.000 NA

CCS

0.525 .OOO*'*

0.589 .000**

1.000 NA

DOT

0.145 .162

0.145 .095

-0.275 .025

1.000 NA

CIS

0218 .045*

0.143 .159

0234 .049

0296 .017

1.000 NA

CA

-0.141 .170

-O.069 .315

-0.124 .193

0.106 229

0243 .043

1.000 NA

•Correlation is significant at the 0.05 level. **Correlation is significant at the 0.0 i level.

T A B L E 4 . Correlation Analysis-Cabin Crew Pearson Correlation Significance (I-tailed)

.:, Cabin Crew Service [CCS] excellent or very good %

Meal Rating [MR] excellent or very good %

Departure on Time JDOT]%

Check-In Service [CIS] excellent or very good %

Calls Answered [CA] < 20 seconds %

CCS

1.000 NA

MR

0.490 .000**

1.000 NA

DOT

-0.326 .009**

-0.197 .079

1.000 NA

CIS

0.669 .000**

0120 .197

-.070 .308

1.000 NA

CA

-0.061 .333

-0.067 .317

0.095 .250

0. 08 .221

1.000 NA

••Correlation is significant at the 0.01 level.

the seat they want, etc—then the passenger is likely to board the plane in a posi- tive frame of mind. The next major interaction the passenger will have with the airline will be the meal service, as it is at this time that passengers will talk with a member of cabin crew and state meal and drinks preferences, etc. Hence it is logical that these two factors—check-in service and meal rating—are correlated with cabin crew service.

The final correlation identified is somewhat counterintuitive. The data suggest departure on time is negatively correlated with cabin crew service. That is when planes leave late passengers tend to report that cabin crew service is better. A potential explanation for this lies in the service recovery process that occurs when planes leave late. First the pilot informs passengers of the delay and often the pilot "passes the buck," blaming air traffic control for the delay.

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Management Learning Not Mahagement Control: Thf

Second, the pilot often tells the passengers that he or she is negotiating with air traffic control to try and have the delay reduced. In those cases where the pilot is successful, he or she can inform the passengers of the good news.

Qualitative evidence, gathered during the course of this study, suggests that cabin crew also try harder when plane delays have been announced. There are two reasons for this. First the late departure means that the cabin crew have slightly more time before take-off to ensure that the passengers have settled down—i.e., they can offer them drinks, newspapers, and refreshments. Second, there is an incentive for cabin crew to deliver superior service when planes leave late—simply to dampen down any frustration that passengers might feel.

The Link Between Customer Satisfaction and Financial Performance

In addition to customer satisfaction data, British Airways also made avail- able to the research team data on the passenger's willingness to recommend the airline to friends or colleagues, and information on financial performance, mea- sured in terms of Net Yield per Revenue Passenger Kilometer (RPK). Analysis of these three measures revealed a growth and a decline phase for each. Customer satisfaction grew between April 1993 and July 1995, and then declined from July 1995 through to March 1998. Willingness to recommend grew and declined during exactly the same time periods. The airline's financial performance improved between April 1994 and November 1997, and then declined from November 1997 through to March 1999.

Correlation analysis revealed statistically significant relationships between customer satisfaction and willingness to recommend for both the growth and decline phases. During the time period April 1993 to July 1995, when both customer satisfaction and willingness to recommend were growing, the r and p values were 0.490 and <0.01 respectively. During the time period July 1995 to March 1997, the r and p values were 0.597 and <0.01 respectively.

The Link Between Employee and Customer Satisfaction

The airline also made available to the research team data on employee satisfaction. These data were captured on eleven different occasions during the time period 1993 to 1998 through Employee Input surveys. Initial analysis of the data gathered through the Employee Input surveys revealed a general decreasing trend in employee satisfaction for the period December 1993 through to June 1998. However, there was some fluctuation around this trend, as employee satisfaction appeared to improve between December 1993 and Sep- tember 1995, then decrease until July 1997, then increase until March 1998 and then decrease until June 1998. The researchers set out to establish the cor- relations between the individual questions in the Employee Input Surveys and employee satisfaction. Figure 1 shows the results of this analysis. It should be noted that while there were strong positive correlations for most factors, there was a statistically significant negative correlation between "employee satisfaction and relationship with immediate boss."

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lagement Control: The True Roie of Performance Measurement?

F I G U R E I . Factors of Employee Satisfaction Correlated with Overall Employee Satisfaction

Management Practices and Work Relationships

R Factor

0.58 My immediate manager manages people well.

0.76 I think my business unit does a good job of placing the most competent people in management positions.

0.59 My immediate boss does a good job of building teamwork

0.83 My immediate manager is open to my ideas and suggestions for change.

0,81 I believe managers and leadership in my business unit are interested in our well-being.

-0.58 How satisfied are you with [a good working relationship with my

,,. immediate boss]?

Employee Satisfaction

Leadership and Strategic Direction

t Factor

0.96

0.88

0.95

0.73

0.90

Employees are treated with respect in British Airways, regardless of the job they do.

Senior management provides a clear sense of direction for the airline.

0.98 British Airways is highly regarded by its employees.

0.78 I believe that British Airways operates openly and honestly in its internal dealings.

In my judgment, British Airways as a whole is well managed.

British Airways' mission is "to be the best successful company in the airlines industry." How well do you think British Airways is doing against this objective? ^ ^

In my opinion. British Airways is truly committed to customer satisfaction.

Personal Developnnent and Growth

R Factor

0.81 I believe I have the opportunity for personal development and growth in British Airways.

I have sufficient training opportunities to improve my skills/develop new skills.

How satisfied are you with the [career development opportunities] in your current job?

The findings about employee satisfaction are particularly important when one bears in mind the overall trend in employee satisfaction in British Airways during the period under investigation. Over an extended period of time, employees have been reporting that they are becoming more and more dissatis- fied. At the same time they have been reporting that generally the situation is getting worse—my immediate manager is not managing people well, the business is not placing the most competent people in management positions, employees are not treated with respect, opportunities for personal development and growth are not provided. The one item that appears to have improved during the same time period is relation- ship with immediate boss.

An interpretation of these data is that front-line employees are discussing openly with their immediate mangers their frustrations with the organization.

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They are complaining to their managers that the husiness is not well managed, that senior management is not providing a clear sense of direction, that the busi- ness does not care ahout its employees, and that it is not offering appropriate opportunities for personal development and growth. In response to these com- plaints, their manager is saying, "Yes, I agree." Thus, the front-line employees and the managers are huilding a stronger relationship on the basis of their shared frustrations with the organization.

Additional qualitative evidence gathered during discussions with junior employees supports this interpretation of the data. During discussions with the authors, one commented:

"I do not have a problem with my boss. 1 beheve that he has nothing to do with our problems. I feel that he cannot help it. Sometimes we know about a decision from the media before he [the immediate boss] knows about it."

While another reported that he believed that most of the company's problems were related to the executive team and not his team leader. Asked to explain how this made him feel, he commented:

"We are in the same boat. . . against them!"

While interesting in themselves, and undoubtedly of value to the busi- ness, these findings do not explain directly the relationship between customer and employee satisfaction, so the final stage of the analysis involved exploring whether these two data sets—customer and employee satisfaction were corre- lated [r=0.801, P<0.01]. A regression analysis conducted on these data revealed a regression equation of:

Overall Customer Satisfaction = 0.25 X Overall Employee Satisfaction-f-39.36

Integrated Performance Analysis

The previously presented analysis can be integrated into a single frame- work of the form shown in Figure 2. While it would be possible to continue to refine the statistical analysis underpinning the model and continue to assess the validity of the linkages it is the authors' contention that to do so is not the important part of the process. The key here is to contrast the analysis presented in Figure 2 with the way British Airways and many other firms would analyze their performance data. Traditionally, performance data are analyzed indepen- dently. Managers in particular departments or functions examine sub-sets of the data. The marketing director and his colleagues, for example, review in detail the data relating to customer satisfaction. Separately, human resources explore the data gathered through the staff survey, while the accountants investigate the business' financial performance. What would not have happened, however, is an integrated analysis. Nobody within the organization would have been charged with pooling all the data that exist within the organization and examining them from a holistic perspective. Yet performing such an analysis is a valuable way of

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Bagement Control: The True Role of Performance Measurement?

F I G U R E 2. Integrated Correlation Map

Net Yield per Revenue Passenger

Kilometer

Willingness To Recommend

Customer Satisfection

Cabin Crew Service Employee Satisfaction

Management Practices and Work

Relationships

Leadership and Strategic

Direction

Personal Development and

Growth

highlighting the unexpected links between different dimensions of performance —i.e., the negative correlation between cabin crew service and departure on time in the case of British Airways. It is these unexpected links that provide the opportunity for management learning, as they should cause managers to re-examine and question the assumptions they hold about how the business operates.

An interesting question remains, namely: Why were such integrated performance analyses not a regular part of the British Airways management process? Discussions with relevant managers from different departments during feedback sessions identified four primary reasons. Firstly, top management was criticized for not taking a "helicopter" view of the business. In the late 1990s, British Airways was an organization with very strong functional silos. Customer satisfaction initiatives were not linked to employee satisfaction training plans, because they were "owned" by different departments and groups. The second reason why integrated analyses were not undertaken was felt to be simply the pressure on managers to complete their day-to-day activities. Managers in

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Management Learning Not Management Control: TH

British Airways tended to engage in short-term, operational activities, rarely leaving time for more strategic discussion. The third barrier identified was that of access to the necessary data. Different departments own different data sets and it is not always easy, either for political or practical reasons, to integrate these data sets. The researchers involved in this project spent close to two years accessing data from British Airways to enable the analysis reported in this article to be carried out. Rarely do organizations have sufficient sustained focus to undertake such long-term analyses. Finally, it became apparent that several people working in related areas such as Market Research and Human Resources simply did not have the necessary skills to analyze the data they had access to. Interestingly, this is something that many organizations now appear to be recognizing, with ever increasing numbers of firms appointing performance analysts, with explicit responsibility for better exploiting the performance data being collected.

Discussion: Implications forTheory and Practice

Our understanding of performance measurement has developed signifi- cantly in the last few years. Executives the world over have accepted that the measurement systems they have traditionally relied upon are woefully inade- quate for the 2P' century. They recognize that heavy reliance on financial mea- sures can simply result in short-term, dysfunctional behavior. They have bought into the concept of supplementing their financial measures with non-financial ones and they have invested significant sums in developing more balanced mea- surement systems as a result.

In the academic community these developments have been accompanied by an upsurge of interest in the processes associated with the design and imple- mentation of measurement systems. Some have devoted considerable research effort to investigating and documenting how executives can decide what they should measure.'^' Others have explored the challenges of implementing mea- surement systems.^*

Now, however, there is growing recognition that while these two issues are of fundamental importance, one of the biggest questions for the future is: How can executives make better use of the data that exist in their organizations? How can organizations perform the integrated performance analysis outlined in the British Airways case? How can they build the technical infrastructure that enables them to undertake such an analysis easily? Finally, how can they be sure that the organization they manage has access to the necessary data anaiysis and interpretation skill? Addressing issues such as these will be a significant challenge for those researching performance measurement in the 2P' century.

A similar challenge can be levied for the practitioner community. Here it is important to acknowledge the significant investments that many companies make on an annual basis in their performance measurement systems. Organiza- tions are collecting significant quantities of data yet rarely do they appear to be making the best use of these data. Without performing the integrated perfor- mance analysis described here, executives are missing a significant opportunity

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to extract value from the data they have access to and thereby missing an opportunity to understand more fully how the organizations they manage are functioning.

Notes L R. Anthony, Planning and Control Systems: A Framework for Analysis (Boston, MA: Harvard

University Press, 1965); H. Koontz, "Management Control: A Suggested Formulation of Principles," California Management Review. 1/2 (Winter 1959): 47-56.

2. R.S. Kaplan and D.P. Nonon, "The Balanced Scorecard—Measures That Drive Performance," Han'ard Business Review. 70/1 (January/February 1992): 71-79.

3. M.L. Prigo and K.R. Krumwiede, "Balanced Scorecards: A Rising Trend in Strategic Perfor- mance Measurement," Journal of Strategic Performance Measurement. 3/1 (February/March 1999): 42-48; M.L. Frigo, "2000 GMG Survey on Performance Measurement: The Evolution of Performance Measurement Systems," Cost Management Update. 105 (2000): 1-3; D. Rigby, "Management Tools and Techniques: A Survey," California Management Review. 43/2 (Winter 2001): 139-160; S. Silk, "Automating the Balanced Scorecard," Management Accounting, 79/11 (1998): 38-44; G. Speckbacher, J. Bischof, and T. Pfeiffer, "A Descriptive Analysis on the Implementation of Balanced Scorecards in German-Speaking Countries." Management Accotmting Research. 14/4 (December 2003): 361-387; B. Marr, A.D. Neely, M. Bourne, M. Kennerley, M. Franco, M. VN̂ ilcox, C. Adams, and S. Mason, "Business Performance Mea- surement: What Is the State of the An in Large U.S. Firms?" in A.D. Neely, M. Kennerley, and A. Walters, eds.. Proceedings of the 4"' International Conference on Performance Measurement. Edinburgh, Scotland, 2004.

4. S. Gates, Aligning Strategic Performance Measures and Results (New York, NY: The Conference Board, 1999).

5. Private conversation between Professor Andy Neely and Professor Takeo Yoshlkawa, who translated Kaplan and Norton's 1996 book into Japanese.

6. A.D. Neely, Measuring Business Performance (London: Economist Books, 1998). 7. R.S. Kaplan, "Measuring Manufacturing Performance: A New Challenge for Managerial

Accounting Research," The Accounting Review. 58/4 (1983): 686-705; R.S. Kaplan, "Yester- day's Accounting Undermines Production," Harvard Business Review. 62/4 (July/August 1984): 95-101.

8. V.F. Ridgway, "Dysfunctional Consequences of Performance Measurements," Administrative Science Quarterly. 1/2 (September 1956): 241-247; W. Skinner, "Manufacturing—Missing Link in Corporate Strategy," Harvard Business Review, '^ll'i (May/June 1969): 136-145; V̂ . Skinner, "The Anachronistic Factory," Harvard Business Review. 49/1 (January/February 1971): 61-70.

9. A. Neely, J. Mills, K. Platts, H. Richards, M. Gregory, M. Bourne, and M. Kennerley, "Per- formance Measurement System Design: Developing and Testing a Process-Based Approach," International Journal of Operations ^Production Management, 20/9-10 (2000): 119-145; R.S. Kaplan and D.P. Norton, The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment (Boston, MA: Harvard Business School Press, 2001); R.S. Kaplan and D. Nonon, The Balanced Scorecard: Translating Strategy into Aaion (Boston, MA: Harvard Business School Press, 1996); Neely (1998), op. dt.

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