Balanced Scorecard Presentation For Gemba
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Balanced Scorecard Presentation For Gemba

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  • 1. Why Strategy Matters • Borrowing heavily from Kaplan’s Balanced Scorecard and Strategy Mapping. • I have taken everyone’s feedback from the meeting on 10/29 and attempted to place it into a comprehensive strategy map. • A Harvard Business School study shows that between 70-90% of businesses attempting a new strategy fail. • The Balanced Scorecard (BSC) approach nets results in 2-3 years. • It emphasizes consistent alignment and focus. • Five principles have to be embraced: – Translate strategy to operational terms. – Align the organization to the strategy. – Make strategy everyone’s everyday job. – Make strategy a continual process. – Mobilize change through executive leadership.
  • 2. Introducing Strategy Maps Financial Perspective To financially sustain our mission, what must we focus on? Customer Perspective Bottom-Up Process To achieve our vision, how should we appear to our customers? What is that “customer delight” combination of product, service, pricing, etc.? Internal Perspective To satisfy our customers, what operational processes must we excel at? What do we need to be better at than any of our competitors in order to create “customer delight”? Learning and Growth Perspective How will we sustain our ability Foundation / Multi-Disciplinary to change and improve? How do we build a learning, growing company? May appear to be foundational features or grounding principles.
  • 3. Learning & Growth Perspective
  • 4. Learning & Growth Perspective • Orienting Question: How will we sustain our ability to change and improve? How do we build a learning, growing company? • Divide into 3 areas: human, information & organizational capital. Human Capital Information Capital Organizational Capital • Culture • Skills • Systems • Leadership • Training • Databases • Alignment • Knowledge • Networks • Teamwork
  • 5. Internal Perspective
  • 6. Internal Perspective • Orienting Question: To satisfy our customers, what operational processes must we excel at? What do we need to be better at than any of our competitors in order to create “customer delight”? Develop Supplier Distribute to Produce Product Manage Risk Relations Customers •Lower cost of ownership. •JIT delivery. •Lower cost of production. •High quality supply. •Financial risk (high credit •Continuous improvement. •Lower cost to serve. •New ideas from suppliers. rating). •Process cycle time. •Responsive delivery time. •Supplier partnerships. •Operating risk. •Fixed asset utilization. •Enhance quality. •Outsource mature non- •Technological risk. •Working capital efficiency. strategic products & services.
  • 7. Customer Perspective
  • 8. Customer Perspective • Orienting Question: To achieve our vision, how should we appear to our customers? What is that “customer delight” combination of product, service, pricing, etc.? • Answer is some combination of the following: Product / Service Attributes Relationship Image Selection / Price Quality Availability Functionality Service Partnership Brand Breadth
  • 9. Financial Perspective
  • 10. Financial Perspective • Orienting Question: To financially sustain our mission, what must we focus on? Long-Term Shareholder Value Productivity Strategy Growth Strategy Operating Income Strategy Expand Penetrate Improve Increase Pursue Streamline Existing New Cost Fixed Asset “Lost” O/H Product Market Structure Utilization Business Lines Segments
  • 11. Pulling Together Strategy w/ Implementation … The Balanced Score Card (BSC) Keep in mind that these processes & themes (what I previously called Core Obstacles) can be changed and added based on your feedback from earlier slides.
  • 12. The Time Realities of BSC Long-Term Shareholder Value Operations Customer Innovation Management Management Processes Processes Processes Product Innovation Shareholder Value ($) Customer Management Operational Effectiveness 1 2 3 4 5 Time (years)
  • 13. Start w/ Key Definitions - Themes Financial Perspective To financially sustain our mission, what must we focus on? Product Innovation & Meaningful Line Extension Re-Energized & Re-Organized Sales Team Resource Allocation – Placement & Justification Low-Total Cost Position in Market Customer Perspective To achieve our vision, how should we appear to our customers? What is that “customer delight” combination of product, service, pricing, etc.? Internal Perspective To satisfy our customers, what operational processes must we excel at? What do we need to be better at than any of our competitors in order to create “customer delight”? Learning and Growth Perspective How will we sustain our ability to change and improve? How do we build a learning, growing company? May appear to be foundational features or grounding principles.
  • 14. Bringing the Processes & Themes Together
  • 15. The BSC Methodology & Template Strategy Map Balanced Scorecard Action Plan Process: Objectives Measurement Target Initiative Budget Theme: Financial Perspective INTENTIONALLY BLANK Customer Perspective Undefined for Now Internal Perspective Learning & Growth Perspective Total Budget $XXXX
  • 16. Low Total-Cost Position in Market Strategy Map Balanced Scorecard Action Plan Process: Operations Management Objectives Measurement Target Initiative Budget Theme: Low Total-Cost Market Position Financial Improve Cost Structure • Profitability • Savings due to Sourcing • >15% Perspective • Reduced Cost • O/H Absorption • O/H Abs. Var. • Defend mature P/Ns. •0 losses • W/L by customer & P/N • W/L Analysis • Attract & retain more @ retail. Customer Lowest Total • Industry Growth Rate vs. • P1 – Customer Delight customers. • Key account Cost Supplier Growth Rate (by •Budget Process Perspective • Challenge perception growth (% they account) that we will not project vs. Our compete on cost. goal) • Realistic • Identify & qualify Growth Goal Continue & Expand • China Sourcing – SP off shore vendors. Internal China Sourcing Evaluation • China Sourcing – TW • Define actual vs. • P/N analysis of savings • What % justifies • China Sourcing – Top 5 Perspective perceived cost • CT Product Re-Quote moving P/N? • Co-Extrusion CT Product advantage. • What % savings • Q1 2008 Sales Meeting • Reduce cost of key on CT to new product. broaden its sales? Learning & • Develop the necessary • 1 week for Growth Perspective skills in purchasing. standard products. • Design the support • Lead Time for Quotes • 2 weeks for • Design RFQ Process system to make • Awareness of Expectations custom products. • Expectations for Sourced Information Human for Sourced Products & New Product Launches. sourcing more • ____ our cost Capital Capital efficient. • Go/No-Go – Purchasing to purchase • Personnel Review RFQ for Logistics/ • Establish standards Capability w/ These Needs sourced product. Process Sourced Supply Chain/ for what we should be • Purchasing Products Purchasing pursuing as sourced manager capable products. of handling this. Total Budget $XXXX
  • 17. Product Innovation & Meaningful Line Extension Strategy Map Balanced Scorecard Action Plan Process: Innovation Processes Objectives Measurement Target Initiative Budget Theme: Product Innovation & Line Ext. Financial Growth Strategy • Revenue Growth • YOY Expectation • Defined. Perspective • Improved ROI • ROI Expectation • Defined. • New Products • ROR or $ revenue on • Renewed Existing • Obvious functionality existing NPD launches. • Defined. Product for Contractor Customer Appropriate differences. • # of Functional ∆s vs. • Min. of 3. • ER Product Perspective Selection • Ability to leverage competitive products. • Defined. • SP Redesign against other companies • Numerical goal on • TW Gen II in our segment. bay space or P/N’s gained. • OPP TW • In-House Development • 1 NPD Staff Internal Supplier Capabilities • Staff Addition(s) • NPD – Add Staff or Capability. • Metric for New • New Market Quarterly Outsource? Perspective • Penetrate New Market Report Markets Defined • Develop NM Report Market Operating Risks Segments & Developed Learning & Growth Perspective Human • NPD – Add Staff or • 1 NPD Staff Capital • Additional Staff Outsource? • Develop and • 1 NPD Training Training on • Do We Invest in NPD • Identify NPD Training Human communicate Program for X Innovation Training Program? philosophy w/ Employees Capital procedures and Product expectations on new Design & product development. Development Information Total Budget $XXXX Capital Justification For New Products
  • 18. Re-Energized & Re-Organized Sales Team Strategy Map Balanced Scorecard Action Plan Process: Customer Management Objectives Measurement Target Initiative Budget Theme: Re-Energized & Organized Sls Financial Growth Strategy & • Revenue Growth • YOY Expectation • Defined. Perspective Operating Income • Profitability • GM or O/H Abs. • Defined. Quality & Cost • New Awareness of • TBD • Defined. Perception our Attitude & Ability • Calls / Day • Defined. Customer • Heightened Presence • NP Placed @ Customer • Defined. •Sales Team • Add in-house NPD • P/N Growth by Cust. • Defined. Expectations Program Perspective Relationship / • Expand P/N’s • Account Touch Metrics • Defined. Service • Build Relationships • Consistent Performance • Grading System for • System designed Internal Re-Energized Team Standards & Expectations Field Sales Staff tied & implemented by Perspective • Accountability Systems To Annual Review January. • CRM Project Re-Organized Team (Budget & CRM) • # of NP Placed • Defined •Sales Team • Emphasis on Organization • % P/N & Gross Sales • Defined Meeting Learning & Growth Perspective Growth • Defined •Sales Team • Calls / Day • 2 / Year (Q1, 4) Expectations Program • # of Sales Meetings Human Human Information Capital Capital Capital • Large Account Key Large Paint & Mid- CRM / Sales • Training in Key Account • 1 Session/yr. Training Program Account Level Retail Mgmt Software Management. • 1 EC Sls Mgr. • EC Sales Manager Management • Added Staff @ Sr. Lvl. • By XXX. • CRM Project • Added CRM System • Min. 2 @ each. •Sales Team • # of Key Retailer Expectations Program Meetings Human Human Human Capital Capital Capital Total Budget $XXXX Senior Sales Team Expand Ears @ Retail Management Retail Mtgs Sales
  • 19. Resource Allocation – Placement & Justification Strategy Map Balanced Scorecard Action Plan Process: Operations Management Objectives Measurement Target Initiative Budget Theme: Resource Allocation Financial Streamline O/H • Profitability • GM or O/H Abs. • Defined. Perspective • % O/H Savings. • Defined. • Higher Quality • Calls / Day • Defined. •Sales Team Face Time with Focused • NP Placed @ Customer • Defined. Customer Relationship / Expectations Program Staff. • P/N Growth by Cust. • Defined. Perspective Service • Attitude, Aptitude & • Account Touch Metrics • Defined. Follow-Through . • New Standards for • System designed Internal • Performance Review • CRM Project Job-Specific Accountability & implemented by Accountability • Performance Review Perspective • Tied to Compensation January.) •Sales Team Expectations Program Learning & • Communicate Clear • Defined Expectations • System designed • Performance Review Expectations & Goals. By Job Category (top-down). & implemented by Growth Organizational • Transparency (on • Quarterly Presentation January. •Sales Team Perspective Capital Expectations Program performance & As to Job Performance • 4 Presentations • Quarterly Company Compensation on “my” Performance. On Financial Update Presentation Tied to Performance Performance Organizational Organizational Organizational Capital Capital Capital Total Budget $XXXX Quarterly Transparency on Refine Strategy Financial Annual Review Presentations Performance Process