Innovation measures focus on the company’s ability to develop and introduce products that form the bulk of sales rapidly. A company’s ability to innovate, improve and learn is directly related to its value. That is, only through the ability to launch new products, create more value for, and improve operating efficiencies continually can a company penetrate new markets and increase its revenues and margins. Goals of this perspective include technology leadership, manufacturing learning, product focus and having sufficient time to market products.
Variables like the time required to develop the next batch of products, the manufacturing time from conception to maturity, the largest percentage of sales and new product introduction versus competition, also need be considered in order for the goals to be achieved This perspective is important because of the increase in intense global competition and the constant stream of new and more advanced products on the market.
It is primarily concerned with the shareholders view of performance generally meaning that the perspectives aim is to succeed financially by delivering value to the shareholders (Figge, Hahn, Schaltegger and Wagner, 2002:270). Furthermore, the perspective indicates if whether the strategy’s transformation leads to an improved economic success of growth (revenue growth rate), sustains (profitability such as ROE, ROCE & EVA) and harvest stage (cash flow & reduction capital requirements) and the perspective also assumes a double role (Figge et al, 2002:270).
However, as it is already mentioned that the financial perspectives assumes a double role we generally mean that it is able to define the financial performance as a strategy that is expected to achieve on the one hand, while on the other hand it is the endpoint of the cause and effect relationships that refers to the BSC perspective (Figge et al, 2002:271). Thus, managers will do anything possible to make sure that the time and accurate data is provided, as it is anticipated that more of the processing can be centralized and automated with the implementation of a corporate database (Markisons, Davison and Dennis, 1999:73).
Therefore, the main point generally being highlighted in this perspective is that is that current emphasize on financials can lead to unbalanced situations when associated to other perspectives, then conceivably a need to include additional financial-related data, such as cost-benefit data and risk assessment, in this category is necessary (Markisons et al, 1999:73). It is primarily concerned with delivering value to customers as it defines the customer/market segment in which it competes in.
Thus, by means of suitable strategic objectives, measure, targets and initiatives that the customer value proposal is represented in and the customer perspectives side through which the firm can achieve a competitive advantage is the envisioned market segment (Butler, Letza and Naele, 1997:153). However, the recent management philosophy has shown that an increasing understanding of the importance of customer focus and satisfaction in any company can either worsen or improve the conditions of the business (Butler et al, 1997:153).
This generally means that if customers are not satisfied, they will eventually find other suppliers that will meet their needs which will lead to a decline in the company’s financial position (Butler et al, 1997:153). Meanwhile, the opposite can happen meaning that a good a set of results from this perspective can lead to quite impressive future financial gains (Butler et al, 1997:153).
Furthermore, in the process of developing satisfaction metrics customers view the company in terms of cost, quality, time and performance with the objectives that the company needs to be able to introduce new products, respond to supply (on time delivery), to be the preferred supplier (share of key accounts) and create a relationship with the customers (number of cooperative efforts) (Butler et al, 1997:153). However, customer are in return analyzed in terms of the type of customers they are and the kind of processes for which are providing a product or service to those customer groups (Butler et al, 1997:153).