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The Balanced Scorecard Perspectives: The Innovation and Learning Perspective

The adage 'our people are our greatest asset' has been honored more in breach than the observance in all too many organizations. It is an issue managers cannot afford to ignore, however. The operations of the organization are undertaken by the people within it. The ability, flexibility and motivation of staff are the foundation of most financial results, organizational objectives and departmental activities that are measured in the other quadrants of the scorecard.

Organizational expectations are always changing and legal departments are, as a consequence, required to make continuous improvement. This relies heavily on the department's ability to innovate, learn and improve, which collectively delivers better results for the whole organization.

The idea that everything else eventually depends upon the staff of an organization could suggest that the ultimate single indicator of long-term sustainable success, if there were such a thing, would be the speed at which the organization can learn to do new things successfully. Used in this way, the Balanced Scorecard framework gives consideration to the importance of investing for the future. Not just in traditional areas of investment such as R&D, but also in the human infrastructure of the organization - creating a 'learning organization' - if ambitious long term financial success objectives are to be achieved.

In short, there is no doubt that the effective development of staff can have a direct impact on the bottom line and can also directly affect all of the increases in profit possible through operational improvements. Simply increasing staff efficiency by 1% can often have the effect of improving profitability by twice as much.
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