Your SlideShare is downloading. ×
0
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Balanced Scorecard Presentation
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Balanced Scorecard Presentation

102,899

Published on

MBA presentation explaining Kaplan and Norton's Balanced Scorecard Approach.

MBA presentation explaining Kaplan and Norton's Balanced Scorecard Approach.

Published in: Business
10 Comments
48 Likes
Statistics
Notes
No Downloads
Views
Total Views
102,899
On Slideshare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
6,183
Comments
10
Likes
48
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. The Balanced Scorecard Approach
  • 2. What is a Balanced Scorecard? <ul><li>The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals. </li></ul>
  • 3. Balanced Scorecard Concept <ul><li>Was first published in 1992 by Kaplan and Norton, a book followed in 1996. </li></ul><ul><li>Traditional performance measurement that only focus on external accounting data are obsolete. </li></ul><ul><li>The approach is to provide 'balance' to the financial perspective. </li></ul>
  • 4. Why Use a Balanced Scorecard? <ul><li>Improve organizational performance by measuring what matters </li></ul><ul><li>Increase focus on strategy and results </li></ul><ul><li>Align organization strategy with workers on a day-to-day basis </li></ul><ul><li>Focus on the drivers key to future performance </li></ul><ul><li>Improve communication of the organization’s Vision and Strategy </li></ul><ul><li>Prioritize Projects / Initiatives </li></ul>
  • 5. 4 Original Business Perspectives <ul><li>Adapted from The Balanced Scorecard by Kaplan & Norton </li></ul><ul><li>The Balanced Scorecard model suggests that we view the organization from 4 perspectives. </li></ul><ul><li>Then Develop metrics, collect data and analyze it relative to each of these perspectives </li></ul>
  • 6. 4 Business Perspectives Questions <ul><li>Financial </li></ul><ul><ul><li>What must we do to create sustainable economic value? </li></ul></ul><ul><li>Internal Business Process </li></ul><ul><ul><li>To satisfy our stakeholders, what must be our levels of productivity, efficiency, and quality? </li></ul></ul><ul><li>Learning and Growth </li></ul><ul><ul><li>How does our employee performance management system, including feedback to employees, support high performance? </li></ul></ul><ul><li>Customer </li></ul><ul><ul><li>What do our customers require from us and how are we doing according to those requirements? </li></ul></ul>
  • 7. Balanced Scorecard Measurements
  • 8. Key Implementation Success Factors <ul><li>Obtaining executive sponsorship and commitment </li></ul><ul><li>Involving a broad base of leaders, managers and employees in scorecard development </li></ul><ul><li>Choose the right Scorecard Champion </li></ul><ul><li>Beginning interactive (two-way) communication first </li></ul><ul><li>Viewing the scorecard as a long-term journey rather than a short-term project </li></ul><ul><li>Getting outside help if needed </li></ul>
  • 9. Balanced Scorecard Example STRATEGY MAP BALANCED SCORECARD MEASUREMENT PROCESS: MANUFACTURING EXCELLENCE THEME: ROCE > xx%, VOLUME = xx,xxx units OBJECTIVES TARGET ACTION PLAN INITIATIVE BUDGET FINANCIAL PERSPECTIVE Improve Productivity OFFER PRODUCTS & SERVCIES THAT ARE CONSISTENT, TIMELY and LOW-COST Long-Term Shareholder Value ROCE > xx% Grow Revenue CUSTOMER PERSPECTIVE <ul><li>Operating Cost & Efficiency </li></ul><ul><li>Capacity Utilization </li></ul><ul><li>Capability Utilization </li></ul><ul><li>Brand / Image </li></ul><ul><li>Cost/Unit, Efficiency </li></ul><ul><li>% Utilization </li></ul><ul><li>Monthly Monitoring </li></ul><ul><li>Weekly/Monthly </li></ul><ul><li>Monitoring </li></ul><ul><li>Monthly Monitoring </li></ul><ul><li>Weekly/Monthly </li></ul><ul><li>Monitoring </li></ul><ul><li>Low Cost Manufacturing </li></ul><ul><li>World-Class Quality </li></ul><ul><li>Standards </li></ul><ul><li>World-Class Delivery Timing </li></ul><ul><li>Knowledgeable & Skilled </li></ul><ul><li>Partner </li></ul><ul><li>High Customer Satisfaction </li></ul><ul><li>Reinforce Brand Image </li></ul><ul><li>Man-hour per Unit </li></ul><ul><li>Defect per Unit </li></ul><ul><li>Sales Delivery </li></ul><ul><li>Direct Pass Rate </li></ul><ul><li>Market Feedback </li></ul><ul><li>Sales Volume </li></ul><ul><li>Weekly Monitoring </li></ul><ul><li>Daily Monitoring </li></ul><ul><li>Daily Monitoring </li></ul><ul><li>Daily Monitoring </li></ul><ul><li>Weekly Monitoring </li></ul><ul><li>Monthly Monitoring </li></ul><ul><li>Prod. & Sales Mtg. </li></ul>Low Cost World Class ENSURE OPERATIONAL EXCELLENCE WITH INNOVATION AS WELL BEING SOCIALLY RESPONSIBLE INTERNAL PERSPECTIVE Customer Satisfaction Enhance Brand Operational Excellence Process Innovation Alliances with SBUs Socially Responsible <ul><li>Productivity </li></ul><ul><li>Delivery </li></ul><ul><li>Continuous Improvement </li></ul><ul><li>NPI </li></ul><ul><li>Safety & Health </li></ul><ul><li>Environment </li></ul><ul><li>Cycle Time </li></ul><ul><li>Meet Daily Plan </li></ul><ul><li>WIP </li></ul><ul><li>KAIZEN </li></ul><ul><li>ICC </li></ul><ul><li>Timely Introduction </li></ul><ul><li>Industrial Accident </li></ul><ul><li>Commuting Accident </li></ul><ul><li>Toxic Waste Disposal </li></ul><ul><li>ISO 9002 </li></ul><ul><li>Hourly Monitoring </li></ul><ul><li>Daily Monitoring </li></ul><ul><li>Daily Monitoring </li></ul><ul><li>Monthly follow-up </li></ul><ul><li>Specific Programmed </li></ul><ul><li>Weekly Follow-up </li></ul><ul><li>Cross Audits </li></ul><ul><li>Defensive Driving </li></ul><ul><li>Facility Readiness </li></ul><ul><li>Certification </li></ul>STRATEGIC JOB & SYSTEMS LEARNING & GROWTH PERSPECTIVE Skills Info. System <ul><li>Develop the Necessary Skills </li></ul><ul><li>Information Systems </li></ul><ul><li>Availability </li></ul><ul><li>Strategic Awareness </li></ul><ul><li>R&D & Development </li></ul><ul><li>ALC, Procurement, </li></ul><ul><li>Financial </li></ul><ul><li>Alignment </li></ul><ul><li>Training and Skill </li></ul><ul><li>Build-up </li></ul><ul><li>Set-up, Test and </li></ul><ul><li>Validation </li></ul><ul><li>Communication </li></ul><ul><li>Programmed </li></ul><ul><li>Trial Prod. </li></ul><ul><li>Spare Parts Prod </li></ul><ul><li>Warranty Cost </li></ul>t OPEX RM XX M CAPEX RM xx M
  • 10. Balanced Scorecard Strategy Map
  • 11. Department Level Scorecard Example
  • 12. Scorecard Potential Pitfalls & Criticisms
  • 13. Scorecard Potential Pitfalls & Criticisms <ul><li>Lack of a well Defined Strategy </li></ul><ul><ul><li>The balanced scorecard relies on a well defined strategy and understanding of linkages between strategic objections and metrics. Without this foundation the implementation could fail. </li></ul></ul><ul><li>Too much focus on the lagging measures </li></ul><ul><ul><li>Focusing on only the lagging measures may cause a lack of priority or opportunity for the leading measures. </li></ul></ul><ul><li>Use of Generic Metrics </li></ul><ul><ul><li>Don’t just copy metrics from another firm. Identify the measures that apply to your strategy and competitive position . </li></ul></ul><ul><li>Self-serving managers </li></ul><ul><ul><li>Managers whose goal is to achieve a desired result in order to obtain a bonus or other self reward. </li></ul></ul>
  • 14. Balanced Scorecard Benefit Re-Cap <ul><li>Helps align key performance measures with strategy at all levels of an organization </li></ul><ul><li>The methodology facilitates communication and understanding of business goals and strategies at all levels of an organization </li></ul><ul><li>Strategic initiatives that follow &quot;best practices&quot; methodologies that cascade through the entire organization </li></ul><ul><li>Transforms an organization’s mission statement and strategic plan from a passive document into the &quot;marching orders&quot; for the organization on a daily basis. </li></ul><ul><li>It enables executives to truly execute their strategies by identifying what should be done and measured. </li></ul>To date, some form of a Balanced Scorecard is used by nearly 60% of Fortune 500 companies
  • 15. Thank You for Your Time <ul><li>Questions? </li></ul>

×