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Who's Counting?

You should be -- if you want to keep track of your company's performance.

For Court Coursey, tracking revenue isn't the only way he keeps score in his company. When the Atlanta entrepreneur sits down for quarterly meetings with the directors of, his 10-employee electronic document delivery business, each person gets a one-page scorecard that shows how the year-old company is doing in such areas as gaining new customers, cutting costs and building corporate value.

"It's a good way to get a grasp on the company and how it's performing," Coursey says of the scorecard system. Other businesspeople seem to agree, making scorecarding one of the hot new management tools of the '90s.

Large corporations, including Shell Oil and Advanced Micro Devices, have used brief summaries of key financial and other business information as a management tool for more than 10 years. The concept gained wider attention in 1992 through a series of Harvard Business Review articles by Harvard leadership development professor Robert Kaplan and management consultant David Norton.

In 1996, Kaplan and Norton wrote The Balanced Scorecard (Harvard Business School Press). Since then, the idea has taken on a life of its own, says Norton. Today, companies such as Mobil Oil, agricultural and industrial chemical and equipment producer FMC Corp. and engineering service provider Brown & Root rely on scorecards to manage their empires. With all this support, the concept may just become one of the most influential management innovations of the decade.

Mark Henricks is an Austin, Texas, writer specializing in business topics.

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This article was originally published in the July 1998 print edition of Entrepreneur with the headline: Who's Counting?.

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