liff Nelson, an assistant professor in accounting, has been teaching all semester about performance measures that gAugust companies' strategic objectives, as part of his Managerial Accounting course in the School of Business Administration.

But Tuesday, school of business alumnus Michael Earley '91, added another dimension to the lesson: reality.

"How many chapters in your textbook are devoted to customer satisfaction?" Earley, assistant director in the Office of Chief Underwriter for Cigna Life Insurance Corp., demanded of the 80 or so students gathered for the class. "Not one," replied Earley, answering his own question to a chorus of nodding heads around the room.

"Now let me ask you, how many chapters are devoted to overhead allocation," asked Earley, who was on campus for the day to conduct a series of class discussions with Nelson's students. Again answering his own query, Earley noted - also to nods of agreement - that all of the textbook chapters were filled with traditional accounting topics, such as gross margins, operating expenses, nonrecurring losses (or gains), short-term investments, inventory, deferred revenue, and so on.

"Is this important? Absolutely," stressed Earley. "Financial instruments we use as a company are like our radar. Using them well is critical to a company's survival.

"But our competitive landscape is changing," he continued. "Our economy increasingly is becoming a service economy and in today's turbulent and highly competitive global business environment, companies need to think about things such as customer satisfaction and innovation and be on the lookout for new technologies. These are measures of performance that don't show up on a balance sheet or income statement. Neither are they found in textbooks."

Which is precisely why Nelson arranged to turn over his teaching pulpit to Earley for the day, so that students could network with a working professional and see what is going on in accounting in the business world.

Earley brings a wealth of experience and education to the discussion. He graduated cum laude in 1991 with a bachelor's degree in accounting. A year later, he passed the Connecticut CPA exam. He also holds a law degree from the University of Connecticut School of Law and passed his bar exam in 1996.

Nelson said the idea of inviting a practitioner to become a professor-for-a-day came from two of his students, Kitty Ciris and Jill Singer, president and vice-president respectively of Beta Alpha Psi, the honorary accounting fraternity. The group regularly hosts evening meetings that feature lectures by executives with area accounting firms. One of the invited speakers was Earley, who impressed the group's leaders so much that they recommended him to Nelson.

At Cigna, Earley was part of the team that developed the insurance giant's balanced scorecard, a promising new management tool being embraced by corporations worldwide. In contrast to single-mindedl y seeking to achieve quarterly financial gains, the scorecard enables managers to spotlight opportunities, heed early warning signals and think about getting the most out of existing assets via a system of performance measures.

"Companies no longer just look at profit-and-loss statements to measure their success," Nelson says. "With the balanced scorecard, managers are focused on how they performed and are positioned for the future - where the opportunities and threats are that traditional budget-driven accounting processes fail to see until it's too late."

Nelson notes that as a management planning tool, the balanced scorecard exposes four areas deemed to be critical to business competitiveness:

• the financial perspective: these yardsticks look at the strategic financial targets of an organization including increasing revenues, improving cost and profitability, and reducing risk;
  
  
• the customer perspective: measures that gauge attentiveness to the customer as the best insurance to preventing a competitor from coming along and serving them better;
  
  
• the learning and growth perspective: assessing how well an organization is on the lookout for new technologies and motivating its employees to keep up with new developments;
  
  
• the internal business perspective: this measure gauges the ability of an organization to deliver the best possible product and create new products as well.
  
  

"These are critical issues for accounting students to be familiar with today," Nelson said. "Mike's background and his ability to communicate the relevance of these new measurement concepts is one step in the process of exposing my students to the market as it is today."

In preparation for his professor-for-a-day stint, Earley developed a case study on the use of the balanced scorecard in the insurance industry that was distributed to Nelson's students as homework prior to the class. Students met in teams to develop answers to key questions Earley had developed. Their assignment also provided the basis for class discussions on what Cigna has done with this planning tool.

"It is really motivating to hear from somebody who's made it in business," said Nelson. "I have found these sessions give a very good dose of reality for the students and provide an excellent additional perspective they might not otherwise get."

David Bauman