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Balanced Scorecards DJA

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  • 1. Managing Strategy
    The BSCsolutionTM
    Aligning Strategy with Execution
    and
    Transforming Intangible Assets
    Into
    Tangible Outputs
    David Allinson
  • 2. Misalignment & Miscommunication of Organizational Strategy
    How does an organization assure their strategies are understood and internalized by all employees to assure the Mission is achieved?
  • 3. The BSCsolutionTM
    Transforming
    Organizations into
    Strategically
    Focused Businesses
    Developing
    Strategically
    Focused
    Culture
    • Operational Alignment with Strategy
    • 4. Evidenced-based management
    • 5. Flexibility to shift strategy
    • 6. Enterprise-wide Accountability
    Creating
    ActionableStrategy
    Mobilizing
    Change
    Value Add
    Process
    Establishing
    Accountability
    And
    Focus
    Driving
    Organizational
    Awareness
  • 7. The 12Critical Strategic Readiness Areas
    Commitment Developing a strategically focused culture
    1
    Committed to a systemic process
    12
    Business Reviews
    2
    Documented mission & strategy
    4
    11
    Budget & operations management
    3
    Buy-in from leadership team
    4
    5
    2
    4
    10
    Communicate Strategy/State of Business
    1
    Strategy mapped to top objectives
    5
    1
    2
    1
    4
    5
    9
    2
    Individual Objectives / Scorecards
    Targets established
    3
    6
    8
    Appraisals linked to Incentives
    Executive Dashboard
    Monitoring
    Scoring:
    1 = No or unaware.
    2 = No, but have discussed/considered.
    3 = Yes, but only recently implemented.
    4 = Yes, but still not ingrained in culture.
    5 = Yes, well established process in culture.
    7
    A Strategically Focused Organization has a “5” in all 12 Areas.
  • 8. What Are Scorecards And What Is Balanced?
    Scorecards
    Part of the BSC integrated solution for strategic management. BSCs detail key functional initiatives in support of each company-level strategic objective. BSCs are enterprise-wide and measure progress towards each initiative. Thus, assuring strategies are achieved. BSCs align all functions and activities with the strategies and mission.
    Balanced
    Per the Hackett Group (A global business process advisory firm www.thehackettgroup.co.uk), traditional financial measures should total 20% of all performance measures. 80% should be customer, operational process and intangible measures (e.g., human, technology and organizational capital).
    Executives
    Develop a “one-pager” mapping strategy statements to:
    • Core objectives in support of the strategy statements, and
    • 9. Key measurable targets for each objective.
    Managers
    Develop departmental scorecards detailing their:
    • Initiatives
    • 10. Measurable targets
    • 11. Owners and timelines
    • 12. Cross-organizational interdependencies
  • THEFOUNDATION
    Strategy Mapping
  • 13. THEFOUNDATION
    Departmental Scorecard
  • 14. Scorecards & Cross-Organizational Collaboration
    Product Management/R&D Scorecard
    Initiative
    Target
    Due Date
    Ownership
    Objective 1
    Create a web-based interactive community.
    Marketing Scorecard
    Finance Scorecard
    Objective 1
    Increase market awareness for new PSO capabilities
    Initiative
    Initiative
    Target
    Target
    Due Date
    Due Date
    Ownership
    Ownership
    Objective 1
    Improve revenue predictability
    Strategy
    Mapping
    Sales/Distribution Scorecard
    Initiative
    Target
    Due Date
    Ownership
    Objective 1
    Shift revenue mix to solutions
    BSC is a powerful tool for focused Strategy, execution and feedback
  • 15. Benefits
    CHRONIC EXECUTION GAPS CLOSED
    Measuring forward-looking financial and non-financial targets produces early gap identification. Cause and effect relationships are identified and controlled.
    STRATEGY TRANSLATION AND COMMUNICATION
    Executive team communicates to employees, partners and investors in a common operating language based on the BSCsolution TM. Employee attrition rates decrease, financial and non-financial targets are achieved and Board meetings are more effective.
    CROSS ORGANIZATIONAL COLLABORATION INCREASES
    Interdependent initiatives drive accountability across organizations. Silos diminish, critical functional linkages are measured.
    FINANCIAL AND MARKET PERFORMANCE IMPROVE
    Discretionary capital and resource decisions have focus on strategic statements. Cash dependent cycles compress and operating margins improve. Go-to-market plans and value drivers are monitored, corrected and optimized.
    STRATEGY MEASURED/CORRECTED
    Strategy feedback process proactively identifies risk/opportunity to the business plan. Executive team becomes nimble at recognizing, mitigating risks, pursuing the right opportunities and tuning strategy.
  • 16. BSCsolutionTM - Five Phase Implementation
    1
    5
    4
    3
    2
    Developing
    Strategically
    Focused
    Culture
    Creating
    Actionable
    Strategy
    Driving
    Organizational
    Awareness
    Establishing
    Accountability
    & Focus
    Mobilize
    Change
    Align
    Assess
    Sustain
    Key Activities:
    Understanding of how CEO/CFO think about the business, its mission and supporting strategies as well as the management of those strategies.
    Determine the organization's level of strategic "readiness".
    Educate CEO/CFO on the organization's level of strategic "readiness".
    Determine initial communication plan to employees.
    Establish personal employee objectives and targets.
    Link employee appraisals to objectives and an incentive plan for achieving targets.
    Create incentive plans tightly linked to achieving targets.
    Establish an on-going employee communication program.
    Establish mid-quarter business reviews.
    Establish monthly financial reviews.
    Create a Strategy Map
    Create Departmental Scorecards
    Obtain buy-in on the departmental Scorecards
    Example of Key Deliverables & Outputs:
    Document interview for CEO and CFO.
    Document Mission Statement and top strategies in support of the Mission.
    Spider gram
    A Strategic Map of objectives and targets that support strategies
    Final approved departmental scorecards
    Content for communication (e.g., town hall meeting, Web cast, emails, etc.)
    Employee information packets (e.g., Strategy Map and Departmental Scorecards).
    Individual scorecards
    Revised appraisals for executives, managers & individual contributor.
    Incentive plans for executives managers and individual contributors.
    Communication plan and calendar
    Framework for mid-quarter business reviews
    Framework for monthly financial review.
  • 17. Keys to BSCsolutionTM Success
    The CEO or CFO Should be a Sponsor and Involved
    • Awareness and internalization of the shared mission, vision and values required to execute the strategy.
    • 18. Availability of qualified leaders at all levels to mobilize the organization towards its strategy.
    • 19. Alignment of people, budgets, process and incentives with the strategy at all organization levels.
    • 20. No boundaries on communication, knowledge sharing and cross-organizational collaboration.
    Culture
    Leadership
    Alignment
    Teamwork
    Commitment to An On-Going Reporting Tool For Both Management and the Board.

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