Balance score card with detail Information and example

1. Presented By :
Sarthak Omer (PGSF1443)
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2.  Introduced in 1992 by Drs. Robert Kaplan (Harvard Business
School) and David Norton as a performance measurement
framework
 The Balanced Scorecard is the most commonly used framework
for ensuring that companies execute their strategies
Where it started……..
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3.  A Balanced Scorecard monitors the performance of
all or part of an organization, towards strategic goals
 It is used in business, industry, government, and
nonprofit organizations worldwide to align business
activities
 It gives a framework and helps planners identify
what should be done and measured
What is Balance Scorecard?
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4.  Increase focus on strategy and results
 Align organization strategy with the work people on
day-to-day basis
 Improve communication of the organization’s Vision
and Strategy
 To provide a more reliable basis for awarding
incentive based pay
Why Implement a Balanced
Scorecard ?
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5.  To give managers a comprehensive view of the
performance of an employee and business
 Employee Satisfaction
 To survive and prosper in today’s world
 It provides feedback to both the internal business
processes and external outcomes in order to
continuously improve strategic performance and results
Why Implement a balanced
Scorecard ?
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6. Four Strategic Perspectives
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7.  Examines company’s implementation and execution
of its strategy
 Three possible stages as described by Kaplan and
Norton
 Rapid Growth
 Sustain
 Harvest
Financial
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8.  Customer Satisfaction
 Retention
 Marketing
 Product/Service in the eyes of the customer
Customer
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9.  Metrics based on this perspective allow the managers to
know how well their business is running
 Innovation - Measures how well the company identifies the
customer’s future needs
 Operations – Measures quality ,costs, technology & plant
infrastructure
Internal Business Process
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10.  Training
 Forward Focused
 Concerned with -Human capital
-Information capital
-Organizational capital
Learning and Growth
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11. Identify workforce requirements
Identify the required work force behaviors
Outline a strategy map
Identify the strategically
required organizational
outcomes
Formulate business strategy
Define business strategy
Outline the company’s value
chain activities
Process
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12. Balanced Score Card
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13.  Philips is world leader in healthcare, lifestyle and lighting
 Philips integrates technologies and design into
people life
 Mission :Improve the quality of people’s lives through
timely introduction of meaningful innovations
Philips
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14.  During the mid-90s, Netherlands based Royal Philips
reported losses
 Due to rapid changes in the external environment and
growing competition of Asian companies like LG and
Samsung
 Led to the Company initiating
 High manufacturing costs
 Initiating job cuts
 Selling unprofitable businesses
Issues
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15.  The initiative to implement the Balanced Scorecard came
from the top management at its HQ in the Netherlands
 Need to shift focus from high-volume business to high-
value business
 They realized they had to make operations
Flexible
Innovative
Why Balance Scorecard ?
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16.  This led the Company to introduce a program called
Business Excellence through Speed and Teamwork (BEST)
in July 1999
 The Balanced Scorecard was one of the tools of the BEST
 There were four perspectives in Philips' Balanced
Scorecard:
Competence
Processes
Customers
Finance
Implementation
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17.  They used Balanced Scorecard strategy across Philips’
divisions with more than 1,20,000 employees spread across
150 countries
 They established the Critical Success Factor’s (CSFs)
 Philips used the traffic light system to measure the level of
achievement of the key indicators:
Green light – Target that had been met
Amber – Performance in line with the target
Red – A problem area
Implementation
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18.  The Balanced Scorecard was used as an instrument to
Evaluate actual performance against targets
Monitor future plans
 It enabled employees understand the existing policies and
plans for the future
 Achieving revenue growth, employee satisfaction, customer
satisfaction were the common indicators in all business
units
Measuring Results
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