1 / 81

The Balanced Scorecard

italia
Download Presentation

The Balanced Scorecard

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. The Balanced Scorecard Planning for long-run organizational success

    2. The Balanced Scorecard: A Good Idea in 1992

    3. The Balanced Scorecard: A Great Idea by 2002 50% usage in Fortune 500 Harvard Business Review “Hall of Fame” 50,000+ BSC on-line members

    4. Balanced Scorecard Hall of Fame Implemented Strategies and Achieved Breakthrough Results… Fast

    5. © 1998 Renaissance Worldwide, Inc. and Robert S. Kaplan, All rights reserved. Question: How can complex organizations achieve results like this in such short periods of time?

    6. A Gap Exists Between Mission-Vision-Strategy and Employees’ Everyday Actions

    7. The Balanced Scorecard Links Vision and Strategy to Employees’ Everyday Actions

    8. Balanced Scorecard Balance between Financial measures of performance Long-range competitive abilities

    9. Balanced Scorecard Four aspects of firm performance Financial Customer Internal business Innovation and learning

    10. Financial Perspective How do we look to stockholders? Survive Succeed Prosper

    11. Customer Perspective How do our customers see us? New products Responsiveness Quality

    12. Internal Business Perspective At what must we excel currently? Manufacturing/service excellence New product/service introduction

    13. Innovation and Learning Perspective Can we continue to improve and create value? Technological leadership Time to market Employee training and satisfaction

    14. Perspectives are Interrelated Innovation pleases customers which are necessary for good financial results Good financial results make financing improvements possible

    16. The Complete Balanced Scorecard Strategy Map

    17. Overall Concepts Not just a set of measures Measures must relate to strategy Critical success factors Measures are interrelated Must understand how the perspectives influence each other

    18. Overall Concepts Not a quick process Implementation requires Thought Analysis Data-gathering Time

    19. Overall Concepts Thought What is our strategy? What is critical to implementing the strategy? How can we measure our progress?

    20. Overall Concepts Analysis What are the linkages between functions? What drives the achievement of goals? What measures correlate with the drivers?

    21. Overall Concepts Data-gathering What data is available? What isn’t? How should it be gathered? Reported?

    22. Overall Concepts Time Cannot be done in an afternoon Successful implementation may take several months Never-ending process

    23. Implementation Steps Initiative must start at the top Only senior management has grasp of overall strategy And the authority to make strategic decisions Doomed without commitment from the top

    24. Implementation Steps Requires teamwork, collaboration Different perspectives, expertise required Not a one-person job Won’t produce buy-in

    25. Implementation Steps Interview senior managers Input on strategic objectives Input on critical success factors Input on possible measures

    26. Implementation Steps Gain consensus Senior managers develop tentative scorecard as a group Individual reactions Suggested refinements

    27. Implementation Steps Expand consensus Larger group refines tentative scorecard Finishing touches Consensus on vision, objectives, measures, targets, implementation program, etc.

    28. Implementation Steps Selection of metrics Must relate to strategic goals Both leading and lagging May not be “exact” May come from external sources Not too many Not too few

    29. Implementation Steps Roll-out Link to data bases and information system Communicate to employees Develop scorecards for lower levels

    30. Implementation Steps Periodic reviews Has strategy changed? Are the objectives valid? Are the activities valid? Are the measures valid? The scorecard evolves with the organization

    31. The Road to Disaster Senior management not committed No one else will be either Lack of consensus Lack of commitment

    32. The Road to Disaster Consultants Good Provide needed expertise Bad Take over the project Consensus, commitment of employees is lost

    33. The Road to Disaster Failure to communicate Employees don’t understand: Strategy Their roles Importance of the scorecard measures

    34. The Road to Disaster Lack of “push-down” Lower levels operating as before Operations are not tied to corporate scorecard Scorecard is ignored at lower levels

    35. The Road to Disaster Carve it in stone It won’t be perfect, ever Must evolve Delay implementation until perfect See above

    36. The Road to Disaster The compensation issue Powerful motivator of performance Poorly designed scorecard will not show strategic improvements even if individual measures show progress

    37. The Scorecard as a Change Agent Four steps Translating the vision into action Communicating and linking Business planning Feedback and learning

    38. Translating the Vision Strategy must be reduced to a set of objectives and measures which can be operationalized “We want to be the best” won’t do

    39. Communicating and Linking Corporate strategy must be communicated to all levels Lower levels must have objectives linked to corporate objectives

    40. Business Planning Integrate the financial plan with the business plan Use the scorecard to allocate resources to critical activities Avoids the short-term spending mentality

    41. Feedback and Learning Monitor short-term results to determine if progress is being made toward long-term objectives May need to refine measures, activities, objectives, even strategy

    43. The Principles of a Strategy-Focused Organization

    44. Principles of the Strategy Focused Organization: TRANSLATE THE STRATEGY TO OPERATIONAL TERMS

    45. Mobil NAM&R Strategy Map

    46. The Balanced Scorecard Framework Is Readily Adapted to Non-Profit and Government Organizations The Mission, rather than the financial / shareholder objectives, drives the organization’s strategy

    47. Boston Lyric Opera Strategy Map

    48. A KPI Scorecard: The Four “P’s”

    49. What’s missing from the 4P’s KPI scorecard?

    50. A Good Balanced Scorecard Tells the Story of Your Strategy Every measure is part of a chain of cause and effect linkages All measures eventually link to organizational outcomes A balance exists between outcome measures (financial, customer) and performance drivers (value proposition, internal processes, learning & growth)

    51. The Principles of a Strategy-Focused Organization

    52. Principles of the Strategy-Focused Organization: LINK AND ALIGN THE ORGANIZATION AROUND ITS STRATEGY

    53. Summary: Top-to-Bottom Strategy Alignment Unleashes Full Organization Potential

    54. The Principles of a Strategy-Focused Organization

    55. Principles of the Strategy Focused Organization: MAKE STRATEGY EVERYONE’S EVERYDAY JOB

    56. Making Strategy Everyone’s Job

    58. Employee Innovations: Mobil Speedpass™

    59. Making Strategy Everyone’s Job

    60. Ultimately, Team and Individual Goals and Objectives Are Aligned to the Strategy

    61. Making Strategy Everyone’s Job

    62. Mobil USM&R Incentive Plan

    63. Linking Compensation to the Balanced Scorecard Experience with successful BSC users indicates that linking the BSC to incentive compensation is essential to success

    64. The Principles of a Strategy-Focused Organization

    65. Making Strategy a Continual Process

    67. Achieving Stretch Target Performance May Require Strategic Initiatives Capital Investments New Products/Services New Customers New Regions New Partners

    68. The Scorecard Process Provides Rigor for Selecting and Managing Initiatives

    69. The Principles of a Strategy-Focused Organization

    70. Using the BSC to Link Strategy to Operational Management

    71. Explicit Causal Links from Operational Improvements to a Customer-Based Value Proposition Explicit Linkages to Productivity Enhancements and Financial Outcomes Identify Entirely New Processes for Improvement Set Priorities among Processes to Improve BSC Adds to Total Quality Programs

    72. The Principles of a Strategy-Focused Organization

    73. Reporting and Feedback: Monthly Scorecard Summary

    74. Effective Strategic Management Is Based Upon a “Double Loop” Learning Approach Test hypotheses about your strategy Assess changes in the environment Identify emerging strategies

    75. The Principles of a Strategy-Focused Organization

    76. To Succeed, the Executive Leader Must be Engaged in the Strategic Change Process…

    77. Pitfalls Middle Management Team: Lack of Senior Management Commitment (“Bacon and Eggs Breakfast”) Done Only by One or Two Individuals Held at the Top: For Senior Management Only Too Long a Development Process: “Best Becomes the Enemy of the Good” “Just Do It!” Treating the Balanced Scorecard as a Systems Project Just a “checklist” for compensation purposes (the 4 P’s)

    78. Typical Balanced Scorecard Project Schedule

    79. Balanced Scorecard Project Team

    80. How are Organizations Doing on the Journey?

    81. What Separates the Winners from the Losers?

    82. For further information, visit www.bscol.com

More Related