BTMU Building Enterprisewide Platform With Bsc

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BTMU Building Enterprisewide Platform With Bsc

  1. 1. - Building an Enterprise-wide Management Platform with BSC - “The BTMU Approach” July 12 2007, Boston The Bank of Tokyo-Mitsubishi UFJ, Ltd. Kyota Omori, Managing Director, CEO for the Americas Takehiko Nagumo, Senior Manager, Corporate Planning Division
  2. 2. Contents Company Profile BSC History at BTMU The BTMU Approach: Visioning 1. Framing 2. Implementing 3. Learning 4. 2
  3. 3. The Bank of Tokyo-Mitsubishi UFJ, Ltd. Representative Nobuo Kuroyanagi Stock Holder Mitsubishi UFJ Financial Group, Inc. (MUFG) Market Cap (MUFG) JPY 13,576 billion Capital Stock (BTMU) JPY 996,973 million Date of Establishment August 25, 1919 Number of Employees 52,978 (consolidated base) Number of Branches Japan: 1,008, Overseas: 412 (inc. UBOC) (As of March 31, 2007) 3
  4. 4. BTMU Global Network Domestic Branch Network Overseas Branch Network East Japan Retail: 354 Corporate: 171 24 West Japan 323 Americas 525 Retail: 187 EMEA 43 Union Bank Corporate: 97 22 of California (UBOC) 199 Asia and Oceania 284 Central Japan Retail: 131 Corporate: 68 Domestic Branches Total: 1,008 Overseas Branches Total: 412 (As of March 31, 2007) 4
  5. 5. Organizational Structure and BSC Scope 【Organizational Structure】 【BSC Scope】 Layer 1: Enterprise Strategy Map Top Management Layer 1: Enterprise Strategy Map Top Management Retail Corporate Global Operations Global Corporate Banking Banking Markets Layer 2: BU-Level BSC & Systems Layer 2: BU-Level BSC BU Center BU BU Unit BU UNBC Group Regional HQs Corp & Invest Commercial Transaction Layer 3: HQ-Level BSC Layer 3: HQ-Level BSC (Except UNBC) Divisions/ Divisions/ Divisions/ Divisions/ Layer 4: Division/Branch BSC Layer 4: Division/Branch BSC Divisions Divisions Branches Branches Branches Centers Employees Layer 5: Personnel Scorecard Layer 5: Personnel Scorecard 5
  6. 6. Business Portfolio (MUFG Consolidated base) 6
  7. 7. Evolutional Stages of BSC at BTMU Phase 1 Phase 3 Phase 2 Phase 4 (Jul. 2001~Jun. 200) (Jul. 2004~Dec. 2004) Phase (Jan. 2006~Current) (Jan. 2005~Dec. 2005) “New Concept: “Enterprise-Wide “Implementing BSC “BSC for Pre/Post- BSC Meets CSR” BSC Introduction” Merger Integration” at BTM Americas” •• Corporate governance •• Performance Evaluation •• Sharing new mission, •• Employee participation Corporate governance Performance Evaluation Sharing new mission, Employee participation (BU accountability) vision, and strategy in strategic planning (BU accountability) vision, and strategy in strategic planning Focus •• Communication b/w and execution process Communication b/w and execution process Japanese and non- •• Building a common plat- •• Cultural integration Japanese and non- Building a common plat- Cultural integration Japanese employees form for strategic •• Emphasis on society Japanese employees form for strategic Emphasis on society management and environment management and environment •• CFT approach CFT approach •• How to cascade -- •• How to visualize •• Linkage to employee •• Improving incentive How to cascade How to visualize Linkage to employee Improving incentive Challenges top down vs. bottom up strategy to employees MBO process system top down vs. bottom up strategy to employees MBO process system •• Integrating COSO •• Setting bank-wide •• Reducing # of metrics •• Integrating various CS Integrating COSO Setting bank-wide Reducing # of metrics Integrating various CS framework into BSC common objectives ES processes to BSC framework into BSC common objectives ES processes to BSC 7
  8. 8. FRAME IMPLEMENT LEARN VISION CSR Concept as the Essence of Management Philosophy Economy Shareholders Local Customers Community BTMU Employees Environment Government Society Environment - “Together with our stakeholders, we aim for a harmonious and prosperous world, and we will do our utmost to help create a sustainable society.” 8
  9. 9. FRAME IMPLEMENT LEARN VISION Growth with “Customer First” and “Locally Driven” Attitude Sustainable Growth via “Spiral Up” Sustainable Growth via “Spiral Up” Future Future Needs Needs Customer Customer Delight Delight Potential Potential Needs Needs Customer Customer Appreciation Appreciation Recognized Recognized Needs Needs Customer Customer Acceptance Acceptance Customer Satisfaction Employee Satisfaction - “Customer first” and “locally driven.” “It is my desire to foster a corporate culture that is truly powered at the local level.” 9
  10. 10. FRAME IMPLEMENT LEARN VISION Management Emphasis on Compliance and Risk Management Public’s Trust & Confidence Corporate Value Credit Strategy Risk Risk Governance Framework Legal & Regulatory Operational Risk Risk Systemic Risk Market Risk People Risk Settlement Crisis Information / Reputational Ethical Risk Money Risk Management Security Risk Data Laundering Country Risk Liquidity Risk - “We will comply strictly with all laws and regulations and conduct our business in a fair and transparent manner to gain the public’s trust and confidence.” - “We will seek to inspire the trust of our shareholders by enhancing corporate value through…..appropriate risk management….” 10
  11. 11. FRAME IMPLEMENT LEARN VISION Define Strategic Framework / Process Using Strategy Map quot;GLOBAL TOP 5quot; Position Improve B/S Structure Grow Revenue 【Corporate Social Responsibilities】 【Customer Value Proposition】 Improve Capital Reduce Costs Efficiency No.1 Service No.1 Reliability No.1 Global Coverage Brand Image Voice of External CS Management 【CUSTOMER】 【SOCIETY】 Score Stakeholders Score Sat. Score External Customer Internal Customer Local Community Satisfaction Satisfaction Environment Initiative Business Line (Retail, Corp., Overseas) (Mgmt, Business, Subs.) 【Compliance & Risk Management】 Evaluation Sat. Score Value Creation Value Protection OPERATION RM PO Regulatory Branch Office Internal & ISO9001/14001 Governance Framwork Exam. Results External Audit Audit & Exam. Marketing Strategy Sat. Score Compliance & Ethics IB Cross-sell Operational Channel Strategy Internal Control Mkt Products Quality Crossborder Deal Info. Security Mgmt Settle. Products CSA/RSA SOX 404 & Productivity Risk & Crisis Mgmt, Business Model, IT Products, etc. etc. 【Employee Engagement】 etc. Score Test Results Employees & Org. Culture Mgmt Infrastructure & IT Employee Opinion Poll Info. Security Compliance  BIS II     Employee Sat. Communication Capital Allocation Sat. Score Results Capability Building Performance Mgmt  Strategic ALM     IT Governance Test Results Check List Work Environment Carrier Design, etc.  HR System    CRM System, etc. Strategy Formulation Strategy Execution Strategy Review Strategy Formulation Strategy Execution Strategy Review (P) (D) (CA) (P) (D) (CA) SWOT Analysis, 5 Forces Analysis, etc. SWOT Analysis, 5 Forces Analysis, etc. 11
  12. 12. FRAME IMPLEMENT LEARN VISION Align CSR Initiatives and Activities to Strategy Balanced Scorecard CSR Objectives CSR Domains CSR Stakeholders Plan Do Check Act CSR Initiatives Value Creation Customers Customer Value Customer Satisfaction / ISO9001 Continuous Improvement Proposition Shareholders Performance Monitoring Employees Strategic Planning Diversity Employee Satisfaction Survey Community Social Local Community Support Contribution Environment Collaboration with NPO/NGO Environment Government ISO14001 NPO / NGO Information Privacy Protection / ISO27001 Security Value Protection Developing Countries SOX 404 / J-SOX Disclosure Rating Agencies COSO Control Self-Assessment Internal Control Mass Media Etc. Compliance Program Compliance Corporate Culture 12
  13. 13. FRAME IMPLEMENT LEARN VISION Establish Enterprise-wide BSC Management System Achieving “Global 5” Position thru Sustainable Value Creation Achieving “Global 5” Position thru Sustainable Value Creation (BSC Management System) Balanced Objective Setting Common Platform Alignment Balanced Objective Setting Common Platform Alignment Balance short-term financial Utilize BSC as the enterprise- Align both organization and Balance short-term financial Utilize BSC as the enterprise- Align both organization and objective and long-term wide common platform for individual employees toward objective and long-term wide common platform for individual employees toward non-financial objective strategic communication and strategy by logically cascading non-financial objective strategic communication and strategy by logically cascading performance evaluation strategy via the BSC performance evaluation strategy via the BSC Balance offence and defense Balance offence and defense Visualize how everyone’s Balance communication b/w Visualize how everyone’s Balance communication b/w daily activities contribute HQ functions and branches daily activities contribute HQ functions and branches to Implementation of the to Implementation of the Corporate/Business Strategy Corporate/Business Strategy MUFG Group Management Philosophy MUFG Group Management Philosophy 13
  14. 14. FRAME IMPLEMENT LEARN VISION It is not “Top Down” or “Bottom Up.” It is the both. Integrated Business Strategy Formulation Integrated Business Strategy Formulation Enterprise BU BOTTOM UP: Ownership TOP DOWN: Cascading BOTTOM UP Business Business Scale Portfolio Model Economy Division/Branch Top Management Vision Meets Operational Activities Employee Empowerment: “Customer Professionalism “Locally Driven” First” Office/Group Individual CS/ES-Driven Strategy Execution CS/ES-Driven Strategy Execution 14
  15. 15. FRAME IMPLEMENT LEARN VISION Culture Matters Japanese Companies American Companies Defined Vague Mission and Vision Grand Design Incremental Strategy Formulation Process Differentiation / Uniqueness Operational Efficiency Competitive Edge Bottom Up Top Down Decision Making (or Middle-Up-Down) Explicit / Verbal / Open Implicit / Nonverbal / Closed Communication Style Outcome Orientation Process Orientation Performance Evaluation Diversified Culture / Single Culture / Cooperative Work culture Competitive 15 Adapted from “Essence of Failure,” by I. Nonaka
  16. 16. FRAME IMPLEMENT LEARN VISION “Cool Head” and “Warm Heart” Planning Division WARM COOL Planning & Coordination Group CSR Promotion Office BSC Line Planning & Coordination Group CSR Promotion Office BSC Line Traditional strategic planning role: Cross-functional support role: Traditional strategic planning role: Cross-functional support role: strategic alignment best practice sharing strategic alignment best practice sharing objective setting facilitation and training objective setting facilitation and training performance evaluation benchmarking performance evaluation benchmarking 88members from Planning & Coordination 23 members from various BUs and divisions members from Planning & Coordination 23 members from various BUs and divisions Group. e.g. retail banking, corporate banking, Group. e.g. retail banking, corporate banking, global banking, operations, HR, etc. global banking, operations, HR, etc. Top Down Bottom Up 16
  17. 17. FRAME IMPLEMENT LEARN VISION Share the BSC Experience – Closing the Loop 17
  18. 18. FRAME IMPLEMENT LEARN VISION Training – Practice Makes Perfect 18
  19. 19. FRAME IMPLEMENT LEARN VISION Communicate! Communicate! Communicate!! Newsletters Industry Periodicals Major Newspaper 19
  20. 20. FRAME IMPLEMENT LEARN VISION Business Lines Evaluate Support Function Performance Executive Management Management Satisfaction Survey Corporate Center Branch Opinion Survey BU Satisfaction Survey Business Unit BU HQ Functions Branch Offices Branch Opinion Survey 20
  21. 21. FRAME IMPLEMENT LEARN VISION Some Results • Pre-and Post-Merger Integration: – Effectively used the BSC as the pre-and post-merger integration tool upon the merger between former BTM and UFJ. – Achieved successful operations and systems integration without facing any major failure or breakdowns. • Enterprise-wide Alignment: – Implemented the BSC globally as the enterprise-wide common platform for strategic communication and performance evaluation, emphasizing “balance.” – Linked strategy to individual employees cascading through 5 organizational layers. • Development of the first of the kind BSC approaches: – Uniquely integrated top down and bottom up approaches. – Linked to compliance and risk management, e.g. CSA. – Integrated CSR concept and ISO9001 Quality Management System into the BSC. – Devised innovative objective setting method: “Common,” “Shared,” and “Unique.” 21
  22. 22. FRAME IMPLEMENT LEARN VISION Vision for the Next Stage BSC (Strategy Articulation & Communication) Top Down Management-Led Change Leadership CS CD Autonomous Change (Customer Satisfaction) (Customer Delight) Evolution Evolution Six Sigma ISO9001 ES EE (Employee Satisfaction) (Employee Engagement) Empowerment ⇒ BSC Capability Leadership Capability Bottom Up 22
  23. 23. THANK YOU Quality for You 23

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