Balanced Scorecard for Strategic Planning and Measurement

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ABF Advanced Balanced Scorecard Conference
April 2009

* How BSC can link and facilitate strategy planning
* Performance management measurement through Balanced Scorecard
* BSC as business intelligence to help organisation build strategic direction and measure the progress of strategic execution

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  • Balanced Scorecard for Strategic Planning and Measurement

    1. 1. BALANCED SCORECARD FOR STRATEGIC PLANNING AND MEASUREMENT Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings Berhad
    2. 2. Intro: CNI <ul><li>20 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, F&B Retail, Export/Trading, eCommerce, Shared Services </li></ul><ul><li>Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States, Vietnam </li></ul><ul><li>Staff force: ± 500 </li></ul><ul><li>Distributors: 200,000 </li></ul><ul><li>Products: Consumer Goods and Services </li></ul>
    3. 3. Introduction to Balanced Scorecard and Strategy
    4. 4. <ul><li>&quot;The digital watch didn't come from established watch companies, the calculator didn't come from slide rule or adding machine companies, video games didn't come from board-game manufacturers Parker Bros or Mattel, the ballpoint pen didn't come from fountain pen manufacturers, and Google didn't come from the Yellow Pages&quot; </li></ul><ul><li>Bob Seidensticker, Futurehype </li></ul>
    5. 5. What’s wrong with Strategic Planning Today? <ul><li>L ong-term Plans </li></ul><ul><li>O bjectives </li></ul><ul><li>S trategies </li></ul><ul><li>E nablers </li></ul><ul><li>R esources </li></ul>Also known as L.O.S.E.R.
    6. 6. What’s wrong with Strategic Planning Today? <ul><li>Biggest Threats often come from OUTSIDE your normal industry </li></ul><ul><li>Planning from the base of an ‘Existing’ organization vs. zero-based </li></ul><ul><li>Traditional Analysis (e.g. SWOT) based only on known or existing assumptions or knowledge </li></ul><ul><li>Spending too much time in market research and analysis </li></ul><ul><li>Defining the company from a Product/Service perspective vs. Category vs. JTBD (e.g. Coca-cola) </li></ul><ul><li>Wrong Benchmark – already successful vs. what made them successful </li></ul><ul><li>Implementing BSC and PMS to improve Business Model and Strategy </li></ul><ul><li>New strategy, same people </li></ul>
    7. 7. Why BSC? <ul><li>Reason 1: Balanced </li></ul><ul><li>Reason 2: Cause-and-Effect </li></ul>www.myCNI.com.my www.OOBEY.com
    8. 8. Balanced Scorecard: Corporate Financial “ To satisfy our stakeholders, what Financial objectives must we accomplish?” Internal Process “ To satisfy our customers, in which internal business processes must we excel?&quot; Customer “ Who are our target customers? What is our value proposition?” Learning & Growth “ What capabilities and tools do our employees require to help them execute our strategy?
    9. 9. Balanced Scorecard: NGOs, Non-Profits, Governments Mission “ Who are our targets? What is our value proposition?” Internal Process “ To satisfy our targets, in which internal processes must we excel?&quot; Learning & Growth “ What capabilities and tools do our staff require to help them execute our strategy? Financial “ To fulfill the Mission, what Financial, how do we fund Internal Processes?”
    10. 10. Side notes on BSC <ul><li>BSC should be a Thought Process and a Tool not a Religion (e.g. Excel ™ vs. Budgeting) </li></ul><ul><li>BSC ≠ Appraisal </li></ul><ul><li>New BSC implementations should start linking with Budgeting right from the beginning </li></ul><ul><li>The ‘proper’ BSC approach should rightly fully be heavily customized to the organization </li></ul><ul><li>‘ Strategic Planning’ trainings should be provided before ‘BSC’ trainings </li></ul><ul><li>Clear definitions for Accountability vs. Impact vs. Influence vs. Assistance </li></ul>
    11. 11. Today’s Agenda
    12. 12. Summary: Today’s presentation 1. Business Model + BSC = Boundaries 2. Strategy + BSC = How 3. PMS + BSC = Execution
    13. 13. What is the Business Model? USP Market Discipline Profit Model <ul><li>Google </li></ul><ul><li>Air Asia </li></ul><ul><li>Tata Nano </li></ul>
    14. 14. What is the Business Model? USP Market Discipline Profit Model
    15. 15. Business Model: Profit Model Revenue Cost Margin Cash Flow Assets
    16. 16. Strategy + BSC Revenue Financial Learning & Growth Internal Process Customers Cost Margin Cash Flow Asset
    17. 17. What is the Business Model? USP Market Discipline Profit Model
    18. 18. Intro: Market Discipline <ul><li>&quot;Exactly what I need&quot; </li></ul><ul><li>Customized products </li></ul><ul><li>Personalized communications </li></ul><ul><li>&quot;They're very responsive&quot; </li></ul><ul><li>Preferential service and flexibility </li></ul><ul><li>Recommends what I need </li></ul><ul><li>&quot;I'm very loyal to them&quot; </li></ul><ul><li>Helps us to be a success </li></ul>&quot;They are the most innovative&quot; &quot;Constantly renewing and creative&quot; &quot;Always on the leading edge&quot; &quot;A great deal!&quot; Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership &quot;A no-hassles firm&quot; Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy
    19. 19. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    20. 20. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    21. 21. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    22. 22. <ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li></ul><ul><li>Meet volatile customer needs </li></ul><ul><li>Fast concept-to- counter </li></ul><ul><li>Never satisfied - obsolete own and competitors' products </li></ul><ul><li>Learning organization </li></ul>Strategy: Value Disciplines <ul><li>Operational Excellence </li></ul><ul><li>Competitive price </li></ul><ul><li>Error free, reliable </li></ul><ul><li>Fast (on demand) </li></ul><ul><li>Simple </li></ul><ul><li>Responsive </li></ul><ul><li>Consistent information for all </li></ul><ul><li>Transactional </li></ul><ul><li>'Once and Done' </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Management by Fact </li></ul><ul><li>Easy to do business with </li></ul><ul><li>Have it your way (customization) </li></ul><ul><li>Market segments of one </li></ul><ul><li>Proactive, flexible </li></ul><ul><li>Relationship and consultative selling </li></ul><ul><li>Cross selling </li></ul>www.myCNI.com.my www.OOBEY.com
    23. 23. The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li></ul><ul><li>Make it easy to prepare </li></ul><ul><li>High Turnover </li></ul><ul><li>Tasks simple to learn & repeat </li></ul><ul><li>Make it quick </li></ul><ul><li>“ Fast Food” </li></ul><ul><li>Tests new products for Cooking Times </li></ul><ul><li>Make what customers want </li></ul><ul><li>Prowls market for new products </li></ul><ul><li>Monitored field tests </li></ul>*Adapted from: Businessweek , Februrary 5 th 2007 www.myCNI.com.my www.OOBEY.com
    24. 24. Strategy: Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
    25. 25. Strategy: Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) HP well-balanced portfolio, mass customization Acer super lean cost structure, aggressive pricing Apple powerful products, premium pricing, limited range Still Doing well in 2009
    26. 26. What is the Business Model? USP Market Discipline Profit Model <ul><li>Google </li></ul><ul><li>Air Asia </li></ul><ul><li>Tata Nano </li></ul>
    27. 27. Summary: Today’s presentation 1. Business Model + BSC = Boundaries  Done 2. Strategy + BSC = How 3. PMS + BSC = Execution
    28. 28. 2. Strategy + BSC = How ‘Hope’ is not a strategy
    29. 29. What is your Goal? <ul><li>Cost Reduction </li></ul><ul><li>Growth </li></ul><ul><li>Both? </li></ul>
    30. 30. Growth Strategy “ Double-Digit Growth”, Michael Treacy www.myCNI.com.my www.OOBEY.com <ul><li>Base Retention </li></ul><ul><li>Share Gain </li></ul><ul><li>Positioning </li></ul><ul><li>Adjacent Market </li></ul><ul><li>New Business </li></ul>GROWTH
    31. 31. Growth Strategy “ Double-Digit Growth”, Michael Treacy www.myCNI.com.my www.OOBEY.com <ul><li>Increase switching cost </li></ul><ul><li>Customize products </li></ul><ul><li>Preempt Defections </li></ul><ul><li>Brand </li></ul><ul><li>Neutralize Competitor advantages </li></ul><ul><li>Superior Value </li></ul><ul><li>Buy market share </li></ul><ul><li>Spot growth opportunities </li></ul><ul><li>Organized search </li></ul><ul><li>Promising Market? </li></ul><ul><li>Make or Buy? </li></ul><ul><li>Base Retention </li></ul><ul><li>Share Gain </li></ul><ul><li>Positioning </li></ul><ul><li>Adjacent Market </li></ul><ul><li>New Business </li></ul>GROWTH
    32. 32. How Markets determine Growth Strategies (1) <ul><li>Growth Rate </li></ul>www.myCNI.com.my www.OOBEY.com <ul><li>Base Retention </li></ul><ul><li>Share Gain (Acquisitions) </li></ul><ul><li>Market Positioning </li></ul><ul><li>Share Gain </li></ul><ul><li>Base Retention </li></ul>Strategy <ul><li>Lose customers slower than competitors </li></ul><ul><li>Create scale economics, squeeze costs </li></ul><ul><li>Maintain market share in strategic segments </li></ul><ul><li>Prepare for market decline </li></ul><ul><li>Competitors focus too much on getting new customers </li></ul>Why? Flat Fast Growth Rate
    33. 33. <ul><li>Churn Rate </li></ul>How Markets determine Growth Strategies (2) www.myCNI.com.my www.OOBEY.com <ul><li>Base Retention </li></ul><ul><li>Share Gain </li></ul><ul><li>Adjacent Market </li></ul><ul><li>Share Gain (Acquisitions) </li></ul><ul><li>Adjacent Markets </li></ul>Strategy <ul><li>Lose customers slower than competitors </li></ul><ul><li>Customers are always open to the best value and offer </li></ul><ul><li>Desperate to gain revenue </li></ul><ul><li>Buying customer base is cheaper than own efforts </li></ul><ul><li>New products, old customers strategy </li></ul>Why? High Low Churn Rate
    34. 34. How Markets determine Growth Strategies (3) <ul><li>Example: XYZ Sector </li></ul>www.myCNI.com.my www.OOBEY.com <ul><li>Market Positioning </li></ul><ul><li>Share Gain </li></ul><ul><li>Base Retention </li></ul><ul><li>Adjacent Markets </li></ul>Fast Growth, Low Churn
    35. 35. Side Notes on Cost Reduction Strategy <ul><li>Cost Reduction </li></ul>5% - 30% 30% - 80% Business Model <ul><li>USP </li></ul><ul><li>Profit Model </li></ul><ul><li>Market Discipline </li></ul><ul><li>Invest/Divest </li></ul>Operational <ul><li>Finance, HR, IT </li></ul><ul><li>Supply Chain </li></ul><ul><li>R&D </li></ul><ul><li>Sales & Marketing </li></ul>
    36. 36. Strategy + BSC Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Cash Flow Asset Satisfaction
    37. 37. Strategy: Disciplines, Priorities, and KPIs Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
    38. 38. <ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li></ul><ul><li>Meet volatile customer needs </li></ul><ul><li>Fast concept-to- counter </li></ul><ul><li>Never satisfied - obsolete own and competitors' products </li></ul><ul><li>Learning organization </li></ul>Strategy: Disciplines, Priorities, and KPIs <ul><li>Operational Excellence </li></ul><ul><li>Competitive price </li></ul><ul><li>Error free, reliable </li></ul><ul><li>Fast (on demand) </li></ul><ul><li>Simple </li></ul><ul><li>Responsive </li></ul><ul><li>Consistent information for all </li></ul><ul><li>Transactional </li></ul><ul><li>'Once and Done' </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Management by Fact </li></ul><ul><li>Easy to do business with </li></ul><ul><li>Have it your way (customization) </li></ul><ul><li>Market segments of one </li></ul><ul><li>Proactive, flexible </li></ul><ul><li>Relationship and consultative selling </li></ul><ul><li>Cross selling </li></ul>
    39. 39. <ul><li>Operational Excellence </li></ul><ul><ul><ul><li>Move know-how from top performing units to others </li></ul></ul></ul><ul><ul><ul><li>Benchmark against best in class </li></ul></ul></ul><ul><ul><ul><li>Ensure operations training for all employees </li></ul></ul></ul><ul><ul><ul><li>Use disciplines like TQM for continuous learning to reduce costs and improve quality </li></ul></ul></ul>Strategy: Value Disciplines
    40. 40. Strategy: Value Disciplines <ul><li>Customer Intimacy </li></ul><ul><ul><ul><li>Capture knowledge about customers </li></ul></ul></ul><ul><ul><ul><li>Understand customer needs </li></ul></ul></ul><ul><ul><ul><li>Empower front line employees </li></ul></ul></ul><ul><ul><ul><li>Ensure that everyone knows the customer </li></ul></ul></ul><ul><ul><ul><li>Make company knowledge available to customers </li></ul></ul></ul>
    41. 41. <ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce time to market </li></ul></ul></ul><ul><ul><ul><li>Commercialize new products fast </li></ul></ul></ul><ul><ul><ul><li>Ensure that ideas flow </li></ul></ul></ul><ul><ul><ul><li>Reuse what other parts of the company have already learned </li></ul></ul></ul><ul><ul><ul><li>Ensure there are multiple sources of funding </li></ul></ul></ul>Strategy: Value Disciplines
    42. 42. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
    43. 43. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
    44. 44. Strategy + BSC Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Cash Flow Asset Operational Excellence Product Leadership Customer Intimacy Investment Strategy Satisfaction
    45. 45. Alignment: 4-Wheels Model Culture Business Model Strategic Planning Structure Person Leadership Resources
    46. 46. Alignment: Framework <ul><li>Focus point </li></ul><ul><li>Alignment </li></ul><ul><li>Quality </li></ul><ul><li>Innovation & Differentiation </li></ul><ul><li>Risk taking </li></ul><ul><li>Performance Management </li></ul><ul><li>Corporate obsession </li></ul><ul><li>Decision making </li></ul>Culture
    47. 47. Alignment: Framework <ul><li>Org Structure </li></ul><ul><li>Job Design </li></ul><ul><li>C&B </li></ul><ul><li>Policies & procedures </li></ul><ul><li>Decision making </li></ul><ul><li>Job fit </li></ul><ul><li>Management Systems </li></ul><ul><li>BSC and KPIs </li></ul><ul><li>Decentralized & Empower </li></ul>Structure
    48. 48. Strategy: Framework <ul><li>Role modeling </li></ul><ul><li>Vision/Mission/Philosophy </li></ul><ul><li>Leadership Style </li></ul><ul><li>Delegation & Empowerment </li></ul><ul><li>C&B, Promotions </li></ul><ul><li>Sense of Urgency </li></ul><ul><li>Speak regularly about Performance </li></ul>Leadership
    49. 49. Strategy: Framework <ul><li>Recognition </li></ul><ul><li>Recruitment </li></ul><ul><li>Training </li></ul><ul><li>Profit sharing </li></ul><ul><li>Values </li></ul><ul><li>Motivation </li></ul><ul><li>Self Efficacy </li></ul><ul><li>Awareness </li></ul><ul><li>Useful Competencies </li></ul><ul><li>Career aspirations </li></ul><ul><li>Attribution (control) </li></ul>Person
    50. 50. Strategy: Framework <ul><li>Enablers </li></ul><ul><li>Technology </li></ul><ul><li>Equipment </li></ul><ul><li>Materials </li></ul><ul><li>Human </li></ul><ul><li>Intellectual Property </li></ul><ul><li>Partners </li></ul><ul><li>Property </li></ul><ul><li>Funding </li></ul><ul><li>CAPEX </li></ul><ul><li>OPEX </li></ul>Resources
    51. 51. Alignment: 4-Wheels Model Culture Business Model Strategic Planning Structure Person Leadership Resources
    52. 52. <ul><li>Product Leadership </li></ul>Each Discipline Requires Different Priorities & Resources Operational Excellence Customer Intimacy Organization, jobs, skills Management systems Information and systems Culture, values, norms
    53. 53. Each Discipline Requires Different Priorities & Resources <ul><li>Operational Excellence </li></ul><ul><li>Central authority, low level of empowerment </li></ul><ul><li>High skills at the core of the organization </li></ul><ul><li>Disciplined Teamwork </li></ul><ul><li>Process, product- driven </li></ul><ul><li>Conformance, 'one size fits all' mindset </li></ul><ul><li>Integrated, low cost transaction systems </li></ul><ul><li>The system is the process </li></ul><ul><li>Command and control </li></ul><ul><li>Quality management </li></ul>Organization, jobs, skills Management systems Information and systems Culture, values, norms
    54. 54. <ul><li>Product Leadership </li></ul><ul><li>Ad hoc, organic and cellular </li></ul><ul><li>High skills abound in loose-knit structures </li></ul><ul><li>Concept, future-driven </li></ul><ul><li>Experimentation and 'out of the box' mindset </li></ul><ul><li>Person-to-person communications systems </li></ul><ul><li>Technologies enabling cooperation </li></ul><ul><li>Rewarding individuals' innovative capacity </li></ul><ul><li>Risk and exposure management </li></ul><ul><li>Product Life Cycle profitability </li></ul>Each Discipline Requires Different Priorities & Resources Organization, jobs, skills Management systems Information and systems Culture, values, norms
    55. 55. Each Discipline Requires Different Priorities & Resources Organization, jobs, skills Management systems Information and systems Culture, values, norms <ul><li>Customer Intimacy </li></ul><ul><li>Empowerment close to point of customer contact </li></ul><ul><li>High skills in the field and front-line </li></ul><ul><li>Customer-driven </li></ul><ul><li>Variation and 'have it your way' mindset </li></ul><ul><li>Strong customer databases, linking internal and external information </li></ul><ul><li>Strong analytical tools </li></ul><ul><li>Customer equity measures like life time value </li></ul><ul><li>Satisfaction and share management </li></ul><ul><li>Focus on ‘Share of Wallet’ </li></ul>
    56. 56. Strategy + BSC Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Cash Flow Asset Operational Excellence Product Leadership Customer Intimacy Investment Strategy Competencies Information Systems Motivation, empowerment, alignment Satisfaction
    57. 57. Summary: Today’s presentation 1. Business Model + BSC = Boundaries  Done 2. Strategy + BSC = How 3. PMS + BSC = Execution  Done
    58. 58. 3. PMS + BSC = Execution KPIs and PMS
    59. 59. Reminder: Why BSC? <ul><li>Reason 1: Balanced </li></ul><ul><li>Reason 2: Cause-and-Effect </li></ul>www.myCNI.com.my www.OOBEY.com
    60. 60. Before we start… <ul><li>Which comes first? </li></ul><ul><li>Strategies -> KPI? </li></ul><ul><li>KPI -> Strategies? </li></ul>
    61. 61. Before we start… <ul><li>Which comes first? </li></ul><ul><li>Strategies -> KPI? </li></ul><ul><li>KPI -> Strategies? </li></ul><ul><li>already know our priorities, aware of all strategy options available </li></ul><ul><li>creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air Asia </li></ul><ul><li>conducting a business Turnaround e.g. MAS </li></ul>
    62. 62. Before we start… <ul><li>Which comes first? </li></ul><ul><li>Strategies -> KPI? </li></ul><ul><li>KPI -> Strategies? </li></ul><ul><li>want to find out possible strategies, </li></ul><ul><li>determine our priorities first thru selection of important KPIs; </li></ul><ul><li>growing through ‘normal’ business, not a Turnaround. </li></ul>
    63. 63. Example: Selection of KPIs for BSC <ul><li>Customer satisfaction </li></ul><ul><li>Customer loyalty </li></ul><ul><li>Market share </li></ul><ul><li>Customer complaints </li></ul><ul><li>Complaints resolved on first contact </li></ul><ul><li>Return rates </li></ul><ul><li>Response time per customer request </li></ul><ul><li>Price relative to competition </li></ul><ul><li>Total cost to customer </li></ul><ul><li>Average duration of customer relationship </li></ul><ul><li>Customers lost </li></ul><ul><li>Customer retention </li></ul><ul><li>Customer acquisition rates </li></ul><ul><li>Percentage of revenue form new customers </li></ul><ul><li>Number of customers </li></ul><ul><li>Annual sales per turnover </li></ul><ul><li>Win rate (sales closed/sales contact) </li></ul><ul><li>Customer visits to the company </li></ul><ul><li>Hours spent with customers </li></ul><ul><li>Marketing cost as a percentage of sales </li></ul><ul><li>Number of ads placed </li></ul><ul><li>Number of proposals made </li></ul><ul><li>Brand recognition </li></ul><ul><li>Response rate </li></ul><ul><li>Number of trade shows attended </li></ul><ul><li>Sales volume </li></ul><ul><li>Share of target customer spending </li></ul><ul><li>Sales per channel </li></ul><ul><li>Average customer size </li></ul><ul><li>Customers per employee </li></ul><ul><li>Customer service expense per customer </li></ul><ul><li>Customer profitability </li></ul><ul><li>Frequency (number of sales transactions) </li></ul>
    64. 64. Wrong KPIs <ul><li>“ What is the moral of the story?” </li></ul>
    65. 65. KPIs and Behavior <ul><li>Before: “Handle Time” Per Call </li></ul><ul><li>Motivated Call Centre staff to transfer callers, getting rid of complainers, making them someone else’s problem </li></ul><ul><li>Callers at 45% chance of being transferred </li></ul><ul><li>7,000 customers each week suffered transfers 7 times or more </li></ul>
    66. 66. KPIs and Behavior <ul><li>After: “Minutes Per Resolution” of a problem </li></ul><ul><li>Resolution in ONE CALL become the core goal </li></ul><ul><li>Reduced probability of call transfers from 45% to 18% </li></ul>
    67. 67. Cause and Effect Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Cash Flow Asset Operational Excellence Product Leadership Customer Intimacy Investment Strategy Competencies Information Systems Motivation, empowerment, alignment Satisfaction
    68. 68. Cause and Effect: An Example Financial Learning & Growth Internal Process Customers / Distributors Revenue Growth Productivity Market Value Department Operations Supplier & Alliances External Involvement Target Markets Products/ Services Channel Strategies Human Resources Technology Information & Intelligence Systems & Processes
    69. 69. Sample: Other 1 st Level KPIs across industries… <ul><li>Single view of customers across supply chain </li></ul><ul><li>Zero-error order capture </li></ul><ul><li>Streamline opportunity to cash processes </li></ul><ul><li>Leverage investment in ERP and backoffice systems </li></ul><ul><li>Increase customer loyalty and preference </li></ul><ul><li>Maximize customer revenue </li></ul><ul><li>Improve service quality and efficiency </li></ul><ul><li>Capture and close sales opportunities </li></ul><ul><li>Personalized customer experience </li></ul><ul><li>Maximize share of wallet </li></ul><ul><li>Player/customer loyalty </li></ul><ul><li>Multichannel customer service </li></ul>Manufacturing Travel & Leisure Hospitality <ul><li>Anticipate and prevent churn despite compensation </li></ul><ul><li>Increase number of products per customer </li></ul><ul><li>Turn call center information opportunity to up-sell and cross-sell </li></ul><ul><li>Increase customer satisfaction and loyalty </li></ul><ul><li>Understand customer behavior related to customer conversion, acquisition, and retention </li></ul><ul><li>Single view of customer </li></ul><ul><li>Multichannel customer experience </li></ul><ul><li>Personalized customer experience </li></ul><ul><li>Maximize ARPU </li></ul><ul><li>Minimize Churn </li></ul><ul><li>Mutichannel customer service </li></ul>Telecommunications Retail Financial Services
    70. 70. Sample KPIs for Each Discipline <ul><li>Operational Excellence </li></ul><ul><li>Price </li></ul><ul><li>Selection </li></ul><ul><li>Convenience </li></ul><ul><li>Zero Defects </li></ul><ul><li>Growth </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Customer Knowledge </li></ul><ul><li>Solutions Offered </li></ul><ul><li>Penetration </li></ul><ul><li>Customer Data </li></ul><ul><li>Customer-success focus </li></ul><ul><li>Product Leadership </li></ul><ul><li>Marketing </li></ul><ul><li>Functionality </li></ul><ul><li># of Successes </li></ul><ul><li># of Failures </li></ul><ul><li>Learn from key users </li></ul><ul><li>Interdisciplinary teams </li></ul><ul><li>Pipeline </li></ul>
    71. 71. B2B/B2G BSC Matching Customer/Client/ Government BSC Your BSC <ul><li>Draw your ‘customer’s’ BSC </li></ul><ul><li>Match their CP/IP with your CP </li></ul><ul><li>Identify IPs that support/conflict </li></ul>
    72. 72. Cascading Customer Perspective BD New Business Mkt Share Gain Mkt Base Retention Indirect Direct Targets Strategies Goals
    73. 73. E3 – Department BSC Customer Perspective – Marketing Department Budgeting Share Gain Base Retention OPEX CAPEX Targets Strategies Goals
    74. 74. Individual MBO Employee A – Marketing Executive Re: Base Retention Competition Crossovers Class B Customer Retention Class A Customer Retention Score Weight (%) Targets Action Plans KRAs
    75. 75. What’s In Between Planning and Execution? Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model www.myCNI.com.my www.OOBEY.com
    76. 76. What’s In Between Planning and Execution? Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model a.k.a. Strategy Planning a.k.a. Strategy Implementation www.myCNI.com.my www.OOBEY.com
    77. 77. Performance Execution Clarity www.myCNI.com.my www.OOBEY.com Useless Poor Average Good Excellent E D C B A
    78. 78. Performance Execution Clarity www.myCNI.com.my www.OOBEY.com Useless Poor Average Good Excellent E D Good C B A
    79. 79. Performance Execution Clarity www.myCNI.com.my www.OOBEY.com Useless Poor Average Good Excellent Commit Suicide E Not Good D Good C Very Good B Excellent A
    80. 80. Performance Execution Clarity www.myCNI.com.my www.OOBEY.com Commit Suicide Not Good Good Very Good Excellent Unacceptable performance E Did not fully meet planned results D Achieved Planned Results C Higher than planned results B Consistently achieved 4 for 3 quarters A
    81. 81. Performance and Pay Clarity <ul><li>Pay for Service </li></ul><ul><li>Pay for Job </li></ul><ul><li>Pay for Performance </li></ul><ul><li>Pay for Competency </li></ul>www.myCNI.com.my www.OOBEY.com
    82. 82. Performance and Pay Clarity <ul><li>Increment </li></ul><ul><li>Bonus </li></ul><ul><li>Promotion </li></ul>www.myCNI.com.my www.OOBEY.com
    83. 83. Compa Ratio Table <ul><li>Use this if your company: </li></ul><ul><li>Pays for Performance , and </li></ul><ul><li>Pays for Job rates </li></ul><ul><li>Def: </li></ul><ul><li>Mid-Point = Mid Point of Pay Grade </li></ul>Grade E2 Min RM2,000 MID RM2,500 Max RM3,000 www.myCNI.com.my www.OOBEY.com
    84. 84. Performance and Pay Clarity www.myCNI.com.my www.OOBEY.com 1 2 3 4 5 1 2 3 4 5 6 2 3 4 5% 6 7 3 4 5 6 7 8 4 5 6 7 8 9 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    85. 85. Performance and Pay Clarity www.myCNI.com.my www.OOBEY.com 0 0 0 0 0 1 0 0 1 1 1 2 3 4 5% 7 9 3 3 5 9 12 18 4 5 8 12 15 20 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    86. 86. Curse of the Bell Curve ‘ A’ Staff ‘ B’ Staff ‘ D’ Staff ‘ E’ Staff ‘ C’ Staff www.myCNI.com.my www.OOBEY.com
    87. 87. End Notes Tying it all up
    88. 88. Review processes <ul><li>Result Planning schedule inc. BSC, Budget </li></ul><ul><li>Quarterly Performance Appraisals </li></ul><ul><li>Sales performance reviews </li></ul><ul><li>Non-sales performance reviews </li></ul><ul><li>Annual Appraisals </li></ul><ul><li>Specialized KPI committees </li></ul><ul><li>CAR, PAR, SCAR KPI improvements </li></ul><ul><li>Internal Audit & MSD – process problems </li></ul><ul><li>HRM & TND – people problems </li></ul>
    89. 89. Problems, problems and more problems…
    90. 90. Alignment: 4-Wheels Model Culture Business Model Strategic Planning Structure Person Leadership Resources
    91. 91. Thank You. soft copy of slides: www.totallyunrelatedrandomanddebatable.blogspot.com

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