Analog Devices: 1986-1992

The First Balanced Scorecard^©

by

Arthur M. Schneiderman

The first balanced scorecard was created in 1987 at Analog Devices, a mid-sized semiconductor company.  This e-book chronicles its development over the period of 1986-1992.  By understanding the environment in which it was born and nurtured, and how it grew over time, I hope you will gain insights that will help you in your efforts at improved organizational performance and competitiveness.

During my tenure at Analog from 1986 through 1992, I was the process owner for non-financial performance measurement and the balanced scorecard.  In documenting this history, I've relied heavily on my early audio or video taped presentations.  I want to be sure that I'm not inadvertently revising history; time tends to have that effect.  My principal objectives are to provide you with period data that demonstrates how Analog linked its performance measurement system to its Corporate Objective and business strategy and the richness and completeness of the improvement infrastructure that we had in place.  You can be the judge of how it compares to current best practices.    

Much of what has been previously written about this period at ADI is through the eyes of outside observers: Kaplan, Shank, and Hendrickson, for example, whose work was based on extensive interviews at Analog Devices.  In reading their writings, it has become clear that even scholars have difficulty in capturing in words the fullness of what really happened.  I'm sure I am guilty of the same oversimplifications.  For example, it's difficult to publicly talk about failures, particularly when individuals are involved.  So recognizing this inherent positive bios, I invite you to relive Analog's scorecard journey through the eyes of a very involved insider.

Finally, I posted my intentions to write this history more than six months ago.  I grossly underestimated the effort involved in locating, transcribing, and assembling the material.  And it's not over yet, as I continue to discover and correct errors and important omissions.  But I took my own advice and reluctantly accepted lower initial performance on my journey to 6s writing.

Many of you offered encouragement through your emails.  I hope that the result proves to be worth your wait.  Let me know what you think and thanks for your patience.

I've structured this history in three levels of increasing detail:

1. The "Contents" section below highlights the key milestones in Analog's evolution of the first balanced scorecard.

2. Each of the sections summarized in the contents then provides a more detailed description of this evolution.  Key period slides are shown to demonstrate how the various elements sequentially fell into place.  (Left-click on the slide to get a more readable full screen view and then use your browser's return button to resume the story).

3. Finally, a number of actual slides and presentations given by me in the period of 1986-1991 are made available in various formats.  Some of these presentations were video/audio taped and I have faithfully transcribed those tapes.  Where actual transcripts are not available, I've tried to briefly describe the relevant slides in as unbiased a way as is possible.  (PLEASE NOTE: I know that some of the other presentations were also recorded.  If you have a copy, or know where I can get one, please let me know so that I can arrange for its transcription and inclusion.)

Contents

Setting the Context - 1986

Phase 1: 1986/1987 - The Gestation Period: Developing the "Five-Year Plan"

Phase 2: 1988/1991 - Deployment

Phase 3: Continuous Refinement

Epilogue

Appendices