If quality medical education is to survive in the increasingly competitive marketplace, medical schools need to adopt new tools that measure the value of all initiatives, both financial and non-financial, so that they can make informed decisions about their missions and future direction. The authors describe a tool of this kind called the Balanced Scorecard (originally created for traditional businesses), outline the version of it that they developed for the Department of Anesthesiology at Yale University School of Medicine, and discuss the first year of implementation (which began in 1997). The Balanced Scorecard is a set of measures designed to examine an organization's performance from the following four perspectives and to answer the key question suggested by each perspective: (1) The learning and growth perspective: Can we continue to improve and create value? (2) The internal business perspective: What must we excel at? (3) The customer perspective: How do our customers see us? (4) The financial perspective: How do we look to our shareholders? The first year of implementation of this approach at the Department of Anesthesiology involved creating measures of the four perspectives, determining whether data could be found for each measure and whether the data were in usable forms, and educating and involving the faculty in the process. The authors discuss the pros and cons of the Balanced Scorecard approach that they observed during the first year, and conclude with a list of seven lessons learned (e.g., start with measures that already exist). Overall, they are convinced that the Balanced Scorecard can be of great value to a department, even if the full implementation takes several years to complete.