OUTLINE Balanced scorecard Translating the vision Communicating and linking Business Planning Feedback and Learning
FINANCIALBalanced ScorecardEnables companies to track financialresults while simultaneously buildcapabilities and acquire intangible VISION & INTERNAL CUSTOMER BUSINESSassets from three additional STRATEGY PROCESSperspectives those of customers, internal business processes and LEARNING learning and growth AND GROWTH
Balanced Scorecard It is discovered as the cornerstone of a new strategic management system It addresses a serious deficiency in traditional management system: their inability to link a company’s long term strategy with its short term actions
The balanced scorecard replies on fourprocesses to bind short-term activities tolong-term objectives: TRANSLATING COMMUNICATING BUSINESS FEEDBACK AND THE VISION AND LINKING PLANNING LEARNING
Scorecard supplies a framework and focuseson many critical management processes: Departmental Business Capital and individual planning allocations goal setting Strategic Feedback and initiatives learning
Translating the VisionOutlines what the organization wants to be For a vision to be successful: expressed as an integrated set of objectives and measures. agreed upon by all senior executives. describe the long-term drivers of success.
Translating the Vision Should address to four perspectives: Customers Financial Internal Business Process Learning and Growth
Communicating and Linking To align employees’ individual performances scorecard users engage in three activities:• Communicating and educating• Setting goals and• Linking reward to performance measures
The personal scorecardThe scorecard contains threelevels of information: Corporate objectives Translating corporate targets Individuals and teams articulate with business units ad corporate objectives
Feedback and Learning: “I can continually test my strategy. Its like performing real time research.” Single Loop not sufficient enough, nowadays strategists must become capable for double loop. However it does have some shortcomings. Tools address performance from one perspective It does not involve strategic learning
Feedback and Learning: Balance scorecard supplies three elements essential for strategic planning: Articulates the companies vision Supplies the essential strategic feedback system Scorecard facilitates the strategy review
How one companylinked measuresfrom the fourperspectives
Strategic learning makes the balance scorecard unique from any other and is an invaluable asset in making a new strategic system.
Companies nowadays are using scorecard to: Clarify and update strategy Communicate strategy through out the company Align unit and individual goals with the strategy Link strategic objectives to long term targets and annual budgets Identify and align strategic initiatives Conduct periodic performance reviews
How to built a strategic management system1. Clarify the Vision.2. Communicate to middle managers and develop business unit scorecards.3. Eliminate nonstrategic investments and launch corporate change programs.4. Review business unit scorecards5. Refine the vision
How to built a strategic management system6. Communicate the balanced scorecard and establish individual performance objectives.7. Update long range plan and budget.8. Conduct monthly and quarterly reviews.9. Conduct annual strategy review10. Link everyone’s performance to balanced scorecard.