01 Balance Scorecard For Upload
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01 Balance Scorecard For Upload Presentation Transcript

  • 1. The Abstraction Series
    Topic 1
    Balanced Scorecard
  • 2. Originated by Dr. Robert Kaplan and David Norton
    A Performance Measurement Framework which added non-financial measures to counter balance the effects of Financial performance
    Aligns Business Activities to the Vision and Strategy of the Organization
    Balanced Scorecard
  • 3. The Four layers
  • 4. Problems Balanced scorecard can Solve
  • 5. The Nine Step Framework
  • 6. Performance Measures
    Providing a way to see if the strategy is working
    Focus employees' attention on what matters most to success
    Allow measurement of accomplishments, not just of the work that is performed
    Provide a common language for communication
    Explicitly defined terms of owner, unit of measure, collection frequency, data quality, expected value(targets), and thresholds
    Ensuring Valid Measurement of the right things
    Verifiable Measures to Ensure Data Collection Accuracy
  • 7. Asking the Right Questions
    Who are our profitable customers?
    Do we pay the most attention to those customers?
    Do we know what these customers expect from us now and in the (near) future?
    Do we develop the products and services that will keep us in the running?
    Do our employees develop the knowledge and skills that the markets (will) ask?
    Do we recruit the right people?
  • 8. Overall Process
    Phase 1: The Strategic Foundation
    Phase 2: Three Critical Components
    Phase 3: Deployment
  • 9. Phase 1: The Strategic Foundation
    Consists of three steps:
    • Communicate the Strategy across all Levels
    • 10. Determine Major Strategic Areas for focussed efforts
    • 11. Build a Strategic Grid for each Major Strategic Area
    Step 1: Strategic Alignment and Communication
  • 12. Phase 1: Step 1: Communicate
    After Clearly formulating the Strategy it needs to be effectively Communicated
  • 13. Phase 1: Step 2: Strategic Areas
    Strategic Success Through Fence-Lined Strategic Areas is required for Clear Success Demarcations
    Linking Strategic Goal to a Strategic Area
  • 14. Phase 1: Step 3: Strategic Grids
    Structuring the Balanced Scorecard on Four Layers i.e. Financial, Customer, Internal Processes and Learning.
  • 15. Phase 1: Step 3: Strategic Grids
    Structuring the Balanced Scorecard on Four Layers i.e. Financial, Customer, Internal Processes and Learning.
  • 16. Phase 1: Step 3: Strategic Grids
    Structuring the Balanced Scorecard on Four Layers i.e. Financial, Customer, Internal Processes and Learning.
  • 17. Phase 2: Three Critical Components Step 4: Measurements
    • Every Strategic Objective Should be measurable
    • 18. Not all can be quantified and measured but it makes evaluation of
    such objectives difficult
    • Some Basic Guidelines:
  • Phase 2: Step 4: Measurements
    • Cause Effect Relationship between Leading and Lagging Indicators
    • 19. Customer perspective
  • Phase 2: Step 4: Measurements
    • Internal Process Perspective
    Leading Indicator:
    No. of New Products Introduced
    Leading indicator: Delivery Response Time to Customers
    Leading Indicator: Cycle Time for Resolving Customer Complaint
  • 20. Phase 2: Step 4: Measurements
    • Learning and Growth Perspective
    Leading Indicator:
    Attrition Rate
    Leading Indicator: Centralized database of Employees
    Leading Indicator: Number of Employee Suggestions
  • 21. Phase 2: Step 5: Targets
    • Setting Targets Based on Strategic Goals
  • Phase 2: Step 5: Targets
    • Adding Measurements & Targets to the Balanced Scorecard
  • Phase 2::Step 6: Programmes
    Sponsored by Upper level Management
    Utilizes Designated Leaders and Cross Functional Teams
    Consists of Deliverables, Milestones and a Timeline
    Requires Resources: Man / Machine / Money / material / Market etc.
    Structured Programmes have greater impact on Strategic goals
  • 22. Phase 3: Deployment
    Review and Re-alignment
    Integration of Other Business Areas with the Strategically improved Areas
    Finally linking compensation with the scorecards
    Building the Scorecards for the Entire Value Chain i.e. Customers, Production, sales, Innovation and all such elements
  • 23. Phase 3: Step 7: Best Practices
    Easy to Achieve but difficult to maintain because of Perfectionist Goals
    Successful companies have developed more tolerance levels
  • 24. A Consumer Electronics Manufacturing Firm
  • 25. A Consumer Electronics Manufacturing Firm
  • 26. Questions????
  • 27. Epstein, Marc, and Jean-François Manzoni. "Implementing Corporate Strategy: From Tableaux de Bord to Balanced Scorecards." European Management Journal , April 1998, pp. 190-203.
    "Harvard Business Review Balanced Scorecard Report." Harvard Business Review, 2002 to present (bimonthly).
    Kaplan, Robert S., and David P. Norton. Alignment: Using the Balanced Scorecard to Create Corporate Synergies. Harvard Business School Press, 2006.
    Kaplan, Robert S., and David P. Norton. "The Balanced Scorecard: Measures That Drive Performance." Harvard Business Review, July 2005, pp. 71-79.
    Kaplan, Robert S., and David P. Norton. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School Press, 2000.
    Kaplan, Robert S., and David P. Norton. Strategy Maps: Converting Intangible Assets into Tangible Outcomes. Harvard Business School Press, 2004.
    References
  • 28. Niven, Paul R. Balanced Scorecard Diagnostics: Maintaining Maximum Performance. John Wiley & Sons, 2005.
    Niven, Paul R. Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results, 2d ed. John Wiley & Sons, 2006.
    http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx
    http://www.clickhrd.com/knowledge_base/images/metrus-balance-scorecard.jpg
    http://www.strategy2act.com/solutions/bsc_toolkit/9-scorecard-helps-to-solve-full.gif
    http://www.exinfm.com/training/pdfiles/course11r.pdf
    References