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140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
140202 balanced scorecard implementation
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140202 balanced scorecard implementation

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Organizations that use a Balanced Scorecard approach tend to outperform organizations without a formal approach to strategic performance measurement …

Organizations that use a Balanced Scorecard approach tend to outperform organizations without a formal approach to strategic performance measurement
- World-class companies are 159% more likely to have mature BSC in place than less successful organizations
- Among 164 publicly traded companies, those with well-deployed BSC outperformed the control group by nearly 30% (Advances in Accounting, 2008)
- Organizations using BSC outperform the other companies by about 100 percent in having everyone in the organization understand what the organization's strategy is (Norton, The Strategy-Focused Organization, 2000)

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  • 1. “A Balanced Scorecard system provides a basis for executing good strategy well and managing change.” – Howard Rohm, CEO of Balanced Scorecard Institute This information is confidential and was prepared by Conjunct Consulting for trainingpurposes; it is not to be relied on by any 3rd Party without our prior written consent. CONFIDENTIAL
  • 2. Agenda 1. Insights from Leadership Retreat 2. Why Balanced Scorecard 3. Introduction to Balanced Scorecard 4. Implementation overview and timeline CONFIDENTIAL 2
  • 3. Agenda 1. Insights from Leadership Retreat 2. Why Balanced Scorecard 3. Introduction to Balanced Scorecard 4. Implementation overview and timeline CONFIDENTIAL 3
  • 4. We have already achieved broad alignment on most crew priorities Crew External Affairs Goal A Attract right people (students and profs)currently not in C2 through media channels Development Manage coherent training syllabus across all volunteers (consultants, leaders and professionals) Partners Select right project partners and prep partner for success Goal B Attract right clients through media channels Goal C Attract right donors (foundations, sustained giving, public) Develop content and experiential Manage and train all trainers learning for both hard and soft skills (internal and external crew) Oversee and manage project Ensure long-term, win-win teams to generate sound anchor relationships with recommendations partners Finance & Plan budget, control costs and Track, project and publish Ensure charity and IPC financial Impact ensure financial documents are in financials, impact and social return standards order on investment Internal Innovating by identifiying, building Structuring and auditing cross-crew Managing and simplifying Affairs and refining systems to increase org and in-crew processes for logistics effectiveness efficiency and complexity-reduction Professionals Filter and match professionals to PA Engage and retain alumni and Develop and maintain openings and Hub Leader openings professional members through partnerships with corporate and community events government organizations Sustainable Unify, improve, and execute on Coach, nurture and match future Communicate and align Leadership selection criteria and chapter leaders through feedback loops and volunteers on org vision, election processes based on org identification of upcoming and strategy and values through values and social impact current hub leadership gaps retreats, community events and mentorships CONFIDENTIAL 4
  • 5. Insights from Leadership Retreat (Jan 2014) Desires expressed during Leadership Retreat: 1. Effective communication of strategy and strategic priorities across the organization 2. Increased alignment of priorities across crews to facilitate effective collaboration 3. Improved communication and understanding of how Conjunct is performing (e.g. financially, operationally) Implementation of Balanced Scorecard methodology to address the above concerns CONFIDENTIAL 5
  • 6. Agenda 1. Insights from Leadership Retreat 2. Why Balanced Scorecard 3. Introduction to Balanced Scorecard 4. Implementation overview and timeline CONFIDENTIAL 6
  • 7. Traditional financial-focused models of performance management are inadequate • Traditional financial measures report on what happened last period without indicating how managers can improve performance in the next. • Financial measures are the result, not a driver, of performance • “If you can’t measure it, you can’t manage it” Organizations often fail to look at the full range of activities that result in superior performance. • Balanced scorecard functions as the cornerstone of a company’s current and future success • Serves as the focal point for the organization’s efforts, defining and communicating priorities to managers, employees, financial supporters, even customers Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993) CONFIDENTIAL 7
  • 8. More executives are focusing on leading rather than lagging indicators of growth 80 percent 68 percent of executives believe innovation is more important than cost reduction for longterm success. of respondents believe that taking care of customers and employees should come before profitability. Executives realize that growth depends on having happy, productive employees and satisfied customers. Profits will be the natural by-product. Source: Bain and Company, Management Tools and Trends (2011) CONFIDENTIAL 8
  • 9. Balanced Scorecard methodology (BSC) was created as a better alternative to traditional performance management tools Provides executives with a comprehensive framework to focus strategic vision Translates a company’s strategic objectives into a coherent set of performance measures • Aligns priorities across decentralized organizations • Maintains focus on the key drivers of growth Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993) CONFIDENTIAL 9
  • 10. BSC is a credible and well-researched strategy implementation tool • Drs. Kaplan and Norton (Harvard Business School) developed this approach to strategic management in the early 1990’s and its use has been tracked at hundreds of companies worldwide. • Over 60% of companies in the Fortune 500 use BSC e.g. Sears, Citicorp, AT&T etc. • Most widely adopted strategy implementation framework reported in the 2010 annual survey of management tools undertaken by Bain and Co: among 11,000 respondent companies, 65% of respondents use the tool • Not-for-profits are the largest growth segment of companies beginning to adapt the approach Source: McArdleRamerman Center, The Balanced Scorecard Discipline CONFIDENTIAL 10
  • 11. Companies that use the BSC report higher effectiveness and better results • Organizations that use a Balanced Scorecard approach tend to outperform organizations without a formal approach to strategic performance measurement • World-class companies are 159% more likely to have mature BSC in place than less successful organizations • Among 164 publicly traded companies, those with welldeployed BSC outperformed the control group by nearly 30% (Advances in Accounting, 2008) • Organizations using BSC outperform the other companies by about 100 percent in having everyone in the organization understand what the organization's strategy is (Norton, The Strategy-Focused Organization, 2000) Source: Advanced Performance Institute: What is a Balanced Scorecard? (2014), The Advisory Board Company (2013), Norton, the Strategy-Focused Organization CONFIDENTIAL 11
  • 12. Agenda 1. Insights from Leadership Retreat 2. Why Balanced Scorecard 3. Introduction to Balanced Scorecard 4. Implementation overview and timeline CONFIDENTIAL 12
  • 13. BSC focuses on 4 aspects: Financial, Customers, Learning & Growth, Internal processes Leading How will we sustain our ability to change and improve? Learning & Growth Internal processes What business processes must we excel at? Leading Source: Kaplan and Norton, The Balanced Scorecard (1996) Initiatives Vision & Strategy For each aspect, the following table is used to drive continuous improvement Targets Customers Financial How should we appear to our financial supporters? Lagging Objective s Measures Leading How should we appear to our customers? 1 . 2 . 3 . 4 . 5 CONFIDENTIAL 13
  • 14. The BSC Strategy Map outlines how the four perspectives support each other Source: Advanced Performance Institute: What is a Balanced Scorecard? (2014) CONFIDENTIAL 14
  • 15. BSC Strategy Map adapted for the nonprofit sector Format 1 Format 2 1. 2. 3. Format 3 BSC strategy map has found widespread use in the public and not-for-profit sector It is important to make a few changes, esp. moving the financial perspective from top spot on the strategy map template since, while finance is important, it is usually not the overall reason why the organization exists Instead, the main objective of public sector, government and notfor-profit organizations is to deliver services to their key stakeholders. This perspective usually sits at the top of the template to highlight the key stakeholder deliverables and outcomes Source: Advanced Performance Institute: What is a Balanced Scorecard? (2014) CONFIDENTIAL 15
  • 16. Agenda 1. Insights from Leadership Retreat 2. Why Balanced Scorecard 3. Introduction to Balanced Scorecard 4. Implementation overview and timeline CONFIDENTIAL 16
  • 17. To implement the BSC effectively, a structured approach must be taken 1. 2. 3. 4. 5. 6. 7. 8. Articulate the business’s vision and strategy Identify the performance categories that best link the business’s vision and strategy to its results (such as financial performance, operations, innovation, employee performance) Establish objectives that support the business’s vision and strategy Develop effective measures and meaningful standards, establishing both short-term milestones and long-term targets Ensure companywide acceptance of the measures Create appropriate budgeting, tracking, communication and reward systems Collect and analyze performance data and compare actual results with desired performance Take action to close unfavorable gaps Source: Bain and Company, Management Tools and Trends (2011) CONFIDENTIAL 17
  • 18. A structured approach must be taken to ensure companywide acceptance of the measures 1. Obtaining manager sponsorship and employee commitment at all levels 2. Involving a broad base of leaders, managers and employees in scorecard development 3. Agreeing on terminology and process for the organisation 4. Choosing influential balanced scorecard champions at each level 5. Starting with and maintaining good two-way communication 6. Working through vision, mission, values and strategy mapping before rushing to measures and initiatives Source: Stellar leadership: Introduction to the Balanced Scorecard for the Nonprofit sector CONFIDENTIAL 18
  • 19. Benchmarking helps to put key performance metrics in context for strategic management 1. 2. 3. 4. 5. Select a product, service or process to benchmark Identify the key performance metrics (BSC) Choose companies or internal areas to benchmark Collect data on performance and practices Analyze the data and identify opportunities for improvement 6. Adapt and implement the best practices, setting reasonable goals and ensuring companywide acceptance Source: Bain and Company, Management Tools and Trends (2011) CONFIDENTIAL 19
  • 20. Immediate action steps to effective implementation of the BSC Strategy Map 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Articulate the business’s vision and strategy – DONE? Agree on scope, terminology and ownership of processes – DONE? Obtain management commitment to implementation of the BSC Identify an influential BSC sponsor in each crew. Together, these will form the BSC Steering Committee who will champion and develop the Balanced Scorecard BSC SteerCo to develop the strategy map Obtain management commitment to the strategy map Communicate strategy map across the organization BSC SteerCo to develop objectives Obtain management commitment toobjectives Communicate objectives across the organization BSC SteerCo to develop key performance measurements Obtain management commitment tokey performance measurements Communicate key performance measurements across the organization BSC SteerCo to develop targets for key performance measures Obtain management commitment to targets for key performance measures Communicatetargets for key performance measures acrosstheorganization Gather data on current key performance measures Communicate data on key performance measures with management Management to develop initiatives to close the gap between current performance and targets for key performance measures Communicate initiatives across the organiztion Source: Bain and Company, Management Tools and Trends (2011) CONFIDENTIAL 20
  • 21. Case Study: Apple Computer, Inc. • Developed BSC to focus senior management on a strategy that would expand discussions beyond gross margin, return on equity, and market share • Formed a small steering committee intimately familiar with the deliberations and strategic thinking of Apple’s Executive Management Team • The five performance indicators at Apple are benchmarked against best-in-class organizations. Today they are used to build business plans Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993) CONFIDENTIAL 21
  • 22. Case Study: Apple Computer, Inc. – 5 Balanced Scorecard priorities, in order 1. Customer Satisfaction • Historically, Apple had been a technology- and product-focused company that competed by designing better computers. Customer satisfaction metrics were introduced to orient employees toward becoming a customer-driven company 2. Core Competencies • Company executives wanted employees to be highly focused on a few key competencies: for example, user-friendly interfaces, powerful software architectures, and effective distribution systems. 3. Employee Commitment and Alignment • Apple conducts a survey every two years to understand how well employees understand the company’s strategy as well as whether or not they are asked to deliver results that are consistent with that strategy 4. Market Share • Achieving critical threshold of market share was important not only for the obvious sales growth benefits but also to attract and retain software developers to Apple platforms. Shareholder Value • Included even though this is a result – not a driver – of performance. Intended to offset the previous emphasis on gross margin and sales Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993) CONFIDENTIAL 22

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