Ng Aung San Vice President & Head (Strategy & Organization)

1. 1
BUILDING A STRATEGY FOCUSED ORGANIZATION
WITH THE BALANCED SCORECARD
Introduction to Basic Concepts
Ng Aung San
Vice President & Head (Strategy & Organization)

2. 2
UOTE…Q
“
”
Strategy without tactics is the slowest
route to victory. Tactics without
strategy is the noise before defeat.
Sun Tzu
The Art of War

3. 3
Content
1. Overview of BSC
Architecture
3. Customizing BSC to
Strategy
2. Closer look at Internal
Process Clusters

4. 4
BSC Perspectives
#2 - Customer (External)
§ Defines the Value Proposition for target
existing and potential customers segments
§ How can we become a Magnet company?
#4 - Business Model/ Int. Processes
§ Defines the Vehicle for delivering the Value
Proposition
§ How can deliver on our promise?
#5 - Organization Learning & Growth
§ Defines the organization s intangible assets
§ How can we align assets to support Business
Model and Mobilize and sustain change?
#1 - Financial
§ Defines the tangible outcome of strategy in
traditional Financial terms
§ How does success look like?
#3 - Channel Partners (Int. Customers)
§ Defines the Value Proposition for existing
and potential channel partners/ agents
§ How can we become a Magnet company?

5. 5
#1 Financial Perspective
#1 - Financial
§ Defines the tangible outcome of strategy in
traditional Financial terms
§ How does success look like?
Elaboration on Financial Perspective
§ Summarizes readily measurable economic consequences
of actions already taken.
§ Typically comprise two broad drivers:
§ Productivity driver (Improve cost structure/
Enhance asset yield)
§ Revenue Growth driver (Expand revenue
opportunities / Enhance customer value)
Financial Measures
Two distinct categories of Measures
§ Productivity measures
§ Revenue growth measures
Examples of Productivity measures
§ Total Assets
§ Return on net assets/ total assets
§ Gross margin/ NPAT
§ Profit as % of Sales
§ Profit/ Value added per employee
§ Return on Equity/ Return on investments
§ Market capitalization/ Share price/ Dividends
§ Credit Rating
Examples of Revenue Growth measures
§ Total/ New Business Premiums (existing/ new sources)
§ New Business Embedded Value (existing/ new sources)

6. 6
#2 Customer Perspective
Elaboration on Customer Perspective
§ Identifies the markets and customer segments that
organization will serve and compete
§ Identifies the differentiated Value Propositions that the
organization will offer to target market and customer
segment
Customer Measures
Two distinct categories of Measures
§ Measures of performance in markets and target
customers
§ Measures of Value Propositions organization will offer to
target customers
Examples of Customer Performance Measures
§ Share in target Market and Customer segments
§ Market and Customer segment profitability
§ Sales Volume/ Sales Volume per channel
§ No. of Customers
§ Target customer acquisition/ retention rates
§ Percentage of revenue from New Customers
§ Target customer segments complaints/ compliments
§ Brand recognition/ awareness in target customer
segments
Customer Value Proposition Measures
§ Measures of elements of value propositions to be
delivered
#2 - Customer (External)
§ Defines the Value Proposition for target existing
and potential customers segments
§ How can we become a Magnet company?

7. 7
#3 Channel Partner Perspective
Elaboration on Channel Partner Perspective
§ Identifies the channel partners which organization can
partner and work with
§ Identifies the differentiated Value Propositions that the
organization will offer to channel partners
Customer Measures
Two distinct categories of Measures
§ Measures of performance in target channels
§ Measures of Value Propositions organization will offer to
channel partners
Examples of Channel Partner Performance Measures
§ Channel product volume/ product mix
§ Channel productivity/ profitability
§ Channel market share
§ Channel customer acquisition/ retention rates
§ Channel development/ growth
§ Percentage of revenue from new channels
§ Channel complaints/ compliments
§ Channel scorecard/ survey feedback
Channel Partner Value Proposition Measures
§ Measures of elements of value propositions to be
delivered
#3 - Channel Partners (Int. Customers)
§ Defines the Value Proposition for existing
and potential channel partners/ agents
§ How can we become a Magnet company?

8. 8
#4 Business Model Perspective
Elaboration on Business Model Perspective
§ Describes how organization will deliver its customer and
channel partner value propositions
§ Identifies related process clusters that make up the
organization. Broadly grouped into three process clusters:
§ Operations Management cluster - Producing and
delivering products to customer
§ Customer Management cluster - Establishing and
leveraging relationship with customers
§ Innovation processes cluster - Developing new
products, services, processes and relationships
Business Model/ Internal Process Measures
Examples of Operations Management measures
§ Cost of key operating processes
§ Marketing, selling, administrate expense as % of total costs
§ No. of processes with substantial improvements
§ Cycle time
Examples of Customer Management measures
§ No. of referrals/ Percentage of leads converted
§ Customer response rate to campaigns
§ No. of products per customer/ Depth of relationship
§ Costs per new customer acquired
Examples of Innovation measures
§ Time to Market/ Percentage of product launches on-time
§ No. of new products first-to-market
§ No. of new applications from platform products
§ No. of joint collaborative new product projects
#4 - Business Model/ Int. Processes
§ Defines the Vehicle for delivering the Value
Proposition
§ How can deliver on our promise?

9. 9
#5 Learning & Growth Perspective
Elaboration on Learning & Growth Perspective
§ Defines organization s intangible asset and their role in
strategy. Intangible assets classified into three categories:
§ Human capital - Skills, talents and know how to
perform activities, required by strategy
§ Information capital - Information systems and
infrastructure required to support the strategy
§ Organization capital - Culture, Leadership,
Alignment and Teamwork
Business Model/ Internal Process Measures
Examples of Human Capital readiness measures
§ Training investment per employee/ Training hours
§ Competency coverage ratio
§ % of employees with advanced degrees
§ Number of cross-trained employees
§ Best practice sharing
Examples of Information Capital readiness measures
§ Strategic information ratio
§ Knowledge management index
Examples of Organizational Capital readiness measures
§ Span of control per manager
§ Quality of work environment
§ Motivation index
§ Turnover rate/ Absenteeism
§ Strategic awareness
#5 - Organization Learning & Growth
§ Defines the organization s intangible assets
§ How can we align assets to support Business
Model and Mobilize and sustain change?

10. 10
BSC comprise two main related elements – Strategy Map and
Scorecard
Strategy Map
§ Visual representation of the cause-and-effect
relationships that connects desired Financial,
Customer and Channel Partner outcomes
with the Business Model drivers that will
transform intangible assets into these
outcomes
§ Functions as a checklist for strategy s
granular components and interrelationships
– Missing components usually indicate
incomplete or flawed strategy
§ Provides an uniform and consistent way to
describe strategy, so that objectives across
all perspectives and measures can be
established and managed – through the
Scorecard
Scorecard
§ Translates objectives in strategy map into
measures of success and targets, across
respective financial/ non financial and
internal/ external perspectives.
§ Organizes in a structured way, bundles of
aligned strategic initiatives – action plans
and scarce resources e.g. people, funding
and capacity – required to meet targets for
respective measures, and achieve objectives
§ Functions as a checklist and resource
deployment decision tool for strategic
initiatives – emphasis/ coverage of action
plans and targeted allocation of resources.
§ Provides a cohesive, integrated and
systematic way to manage effective
implementation of strategy

11. 11
BSC Strategy Map depicts chain of cause-and-effect
relationships
#5 - Organization Learning & Growth
§ Defines the organization s intangible
assets
§ How can we align assets to support
Business Model and Mobilize and sustain
change?
#1 - Financial
§ Defines the tangible outcome of
strategy in traditional Financial terms
§ How does success look like?
#3 - Channel Partners (Int. Customers)
§ Defines the Value Proposition for existing
and potential channel partners/ agents
§ How can we become a Magnet company?
Align and enhance our
Organizational Assets…
Guided by and to achieve our Vision…
…What is the desired financial
goals we have to achieve…
… To build strategic
capabilities to effectively
execute the processes …
… And, together
with Channel
Partners, to our
Customers…
… To achieve
our financial
success, and
our Vision
…What is the unique set of benefits we will
offer to customers for their patronage...
…And our channel partners for
their partnership...
#2 - Customer (External)
§ Defines the Value Proposition for target
existing and potential customers segments
§ How can we become a Magnet company?
Top-down
Thinking & Logic
Bottom-Up
Test & Linkage
#4 - Business Model/ Int.
Processes
§ Defines the Vehicle for delivering the
Value Proposition
§ How can deliver on our promise?
…What do we have to do to
ensure consistent delivery of
value propositions…
… Needed to deliver
Value Proposition to
Channel Partner,…
…And what
assets do we
have to develop
VISION

12. 12
Financial perspective provides definition of success or value
in tangible financial terms
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
§ Lower direct and
indirect expenses
§ Reduce working and fixed
capital needed to support
business
§ Improve investment yield
§ Tap into new sources of
revenue (new products,
markets, segments)
§ Tap into new channels
§ Deepen relationship with
existing customers
Financial
Perspective
§ NPAT
§ Expenses
§ ROE/ ROI
§ Investment returns
§ NBEV/ Premiums from new
products, markets & segment
§ NBEV/ Premiums
§ NBEV/ Prems. per Customer
Typical Objectives
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value

13. 13
Customer perspective identifies value proposition to be a
magnet company to External Customers
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value
Customer (External)
Perspective
§ Customer profitability
§ Segment profitability
§ Market Share
§ Segment Share
§ Customer
Acquisition
§ Customer
Retention
§ Identifies the customer and market segments in
which organization will serve and compete
§ Identifies two distinct types of measures:
§ Measures of value propositions organization
will deliver to target customers
§ Measures of performance in the target
segments
§ Unique configuration of seven pillars of Customer
Value Proposition differentiates organization:
§ What company expects to do for its customers
better or differently than its competitors
§ What draws customers to our company
§ Customers perceive where company stands, in
relation to each of seven pillars, and decides on
patronage
CUSTOMER VALUE PROPOSITION
Product/ Service Attributes Relationship Image
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
§ Product Price/
Pricing
§ Brand Strength &
§ Financial Strength
& Ratings
§ Distribution
Channels/
Reach
§ Range of
Product Lines
§ Bonus Levels
§ Yields/
Investment
Returns
§ Quality &
Coverage of
Support/
Service
§ Product
Features/
Quality

14. 14
Channel partner perspective identifies value proposition to
be a magnet company to Channel Partners
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value
Customer
(External)
Perspective
Product/ Service Attributes Relationship Image
Channel Partner (Agency)
Perspective
Customer Value Proposition
§ Agent Business Volume/ Mix
§ Agent Productivity
§ Agents Recruited
§ Agent Attrition
§ No. of Agents on
Management Path
§ Identifies the channel partners which
organization can partner and work with
§ Identifies two distinct types of measures:
§ Measures of value propositions
organization will deliver to target
channel partners/ agents
§ Measures of performance in the target
channels
§ Unique configuration of six pillars of Channel Value
Proposition differentiates organization:
§ What company expects to do for its channel
partner better or differently than its competitors
§ What draws existing partners/ agents to stay with
us and new partners/ agents to join us.
§ Channel partners/ agents perceive where company
stands, in relation to each of six pillars, and decides on
partnership
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
CHANNEL VALUE PROPOSITION
Sales Production Support Growth & Development Support
Product Range Sales Support Admin Support Brand Support Career &
Comp.
Agency
Mgmt. Support

15. 15
Internal Processes/ Business perspective defines vehicle to
deliver on Value Propositions…
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value
Customer
(External)
Perspective
Product/ Service Attributes Relationship Image
Channel Partner
Perspective
Customer Value Proposition
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Channel Value Proposition
Sales Production Support Growth & Development Support
Product Range Sales Support Admin Support Brand Support Career &
Comp.
Agency
Mgmt. Support
§ Identifies Four Process clusters that make
up the organization
§ Business Model enables organization to deliver on
elements of value propositions.
§ Changes to value propositions requires corresponding
changes to business model
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
Process which expand and
deepen relationships with
targeted customers
Processes which develop new products,
processes and services, to enable
company to penetrate new markets
and customer segments
Basic, day to day processes by
which companies produce their
existing products and deliver
them to customers
Processes which help organizations
continually earn the right to
operate in communities and
countries in which they operate
Internal Process
Perspective

16. 16
… And groups Organization s myriad existing and new
processes into four Clusters
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value
Customer
(External)
Perspective
Product/ Service Attributes Relationship Image
Channel Partner
Perspective
Customer Value Proposition
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Channel Value Proposition
Sales Production Support Growth & Development Support
Product Range Sales Support Admin Support Brand Support Career &
Comp.
Agency
Mgmt. Support
Internal Process
Perspective
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
Process which expand and
deepen relationships with
targeted customers
Processes which develop new products,
processes and services, to enable
company to penetrate new markets
and customer segments
Basic, day to day processes by
which companies produce their
existing products and deliver
them to customers
Processes which help organizations
continually earn the right to
operate in communities and
countries in which they operate
§ Customer Selection
§ Customer Acquisition
§ Customer Retention
§ Customers Growth
§ Opportunity Identification
§ R&D Portfolio
§ Design/ Develop
§ Launch
§ Supply
§ Production
§ Distribution
§ Risk Management
§ Environment
§ Safety and Health
§ Employment
§ Community

17. 17
Learning & Growth perspective defines and aligns
organization s intangible assets, completing Strategy Map
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value
Customer
(External)
Perspective
Product/ Service Attributes Relationship Image
Channel Partner
Perspective
Customer Value Proposition
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Channel Value Proposition
Sales Production Support Growth & Development Support
Product Range Sales Support Admin Support Brand Support Career &
Comp.
Agency
Mgmt. Support
Internal Process
Perspective
Learning & Growth
Perspective
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
§ Customer Selection
§ Customer Acquisition
§ Customer Retention
§ Customers Growth
§ Opportunity Identification
§ R&D Portfolio
§ Design/ Develop
§ Launch
§ Supply
§ Production
§ Distribution
§ Risk Management
§ Environment
§ Safety and Health
§ Employment
§ Community
Organization s Intangible Assets
Human Capital Information Capital Organizational Capital
§ Skills/ Talent
§ Knowledge
§ Capabilities
§ Systems
§ Databases
§ Networks
§ Culture
§ Leadership
§ Alignment/ Teamwork

18. 18
Closer look at Human Capital Readiness – Strategic Job
Families, Headcount, Knowledge, Skills & Capabilities
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value
Customer
(External)
Perspective
Product/ Service Attributes Relationship Image
Channel Partner
Perspective
Customer Value Proposition
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Channel Value Proposition
Sales Production Support Growth & Development Support
Product Range Sales Support Admin Support Brand Support Career &
Comp.
Agency
Mgmt. Support
Internal Process Perspective
Learning & Growth
Perspective (illustrative for Human Capital Readiness – Identify Strategic Job Families)
Underwriters
(No.)
Operations
Executives
(No.)
Underwriters
(No.)
Marketing
Executives
(No.)
BD Executives
(No.) ??? ???
BD
Executives
(No.)
???
Competency Profile
§ Knowledge
§ Skills
Readiness Assessment (Assess HC Readiness in terms of adequacy of Headcount, required level of Knowledge & Skills)
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
XX% XX% XX% XX%XX% XX%XX% XX%XX%
List the Knowledge & Skills Required by various Strategic Job Families identified above

19. 19
Strategy comprise complementary strategic themes that cut
across respective perspectives
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance
Asset Yield
Enhance
Customer Value
Customer
(External)
Perspective
Product/ Service Attributes Relationship Image
Channel Partner
Perspective
Customer Value Proposition
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Channel Value Proposition
Sales Production Support Growth & Development Support
Product Range Sales Support Admin Support Brand Support Career &
Comp.
Agency
Mgmt. Support
Internal Process
Perspective
Learning & Growth
Perspective
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
§ Customer Selection
§ Customer Acquisition
§ Customer Retention
§ Customers Growth
§ Opportunity Identification
§ R&D Portfolio
§ Design/ Develop
§ Launch
§ Supply
§ Production
§ Distribution
§ Risk Management
§ Environment
§ Safety and Health
§ Employment
§ Community
§ Organization s Intangible Assets
Human Capital Information Capital Organizational Capital
§ Skills/ Talent
§ Knowledge
§ Capabilities
§ Systems
§ Databases
§ Networks
§ Culture
§ Leadership
§ Alignment/ Teamwork
Deliverprofit
TransformProductMix
Strengthenfranchiseforsustainablegrowth

20. 20
BSC Scorecard translates Strategy objectives into Measures,
Targets and Owners…
Strategy Map (Strategic Business Unit) Scorecard
Theme: TRANSFORM PRODUCT MIX Objectives PI/ KPIs Target Owner
§ Deliver targets
§ Increase new
segment revenues
§ Increase wallet share
§ NBEV/ Premiums
§ Market share
§ Premiums from new segments
§ Share of wallet
§ $ XXX
§ $ XXX
§ $ XXX
§ $ XXX
§ ABC
§ DEF
§ GHJ
§ KLM
§ Increase # of
competent planners
§ Deliver consistent/
competitive returns/
bonus
§ NTM product features
§ Depth of customer relationship
§ % of premiums from referrals
§ Returns/ bonus
§ # of NTM features
§ $ XXX
§ $ XXX
§ $ XXX
§ $ XXX
§ ABC
§ DEF
§ GHJ
§ KLM
§ Enhance product
range
§ Provide Customer
knowledge
§ Increase channel
focus & productivity
§ Strengthen brand
§ # of NTM Products
§ # of Sales Leads
§ % selling Linked/ NP products
§ Linked/ NP Case Count & Size
§ $ XXX
§ $ XXX
§ $ XXX
§ $ XXX
§ ABC
§ DEF
§ GHJ
§ KLM
§ Enhance Operations/
Asset Mgmt. reliability
§ Enhance consistency
of investment returns
§ Develop Product
Innovation process
§ Service levels
§ Investment returns
§ Peer/ Industry product rankings
§ Various process indicators
§ $ XXX
§ $ XXX
§ $ XXX
§ $ XXX
§ ABC
§ DEF
§ GHJ
§ KLM
§ Develop/ hire to
obtain capabilities
§ Align product creation
§ Tap CRM
§ Extend through
collaborations
§ HC readiness
§ Product creation effectiveness
§ Segment knowledge
§ Partner value add
§ $ XXX
§ $ XXX
§ $ XXX
§ $ XXX
§ ABC
§ DEF
§ GHJ
§ KLM
NB EV
Desired
Volume
Reliability Innovation
Desired
Mix
Sales
Support
Brand
Support
Innovative
Products/ Range
Channel
Partner
Financial
Perspective
ChannelPartner
Perspective
BusinessModel
Perspective
L&G
Perspective
Product
Fulfillment
Product
Dist.
Product
Innovation
FOCUS
Strategic Job
Families
Strategic IT
Systems
Strategic
collaborations
Cross Function
Alignment
Competitive
Returns
Innovative
features
Competent
Planners
Customer
Perspective
May be delivered also by
Shared Support Units
May be delivered also by
Shared Support Units

21. 21
...And Business Model and Organizational Assets Initiatives
to deliver on Strategy Objectives and Targets
Strategy Map (Strategic Business Unit) Scorecard Initiatives
Theme: TRANSFORM PRODUCT MIX Objectives PI/ KPIs Target Owner Initiatives/ Activities
§ Deliver targets
§ Increase new
segment revenues
§ Increase wallet share
OUTCOME OF BUSINESS
MODEL & ORGANIZATIONAL
ASSET INITIATIVES &
ACTIVITIES
§ Increase # of
competent planners
§ Deliver consistent/
competitive returns/
bonus
§ NTM product features
OUTCOME OF BUSINESS
MODEL & ORGANIZATIONAL
ASSET INITIATIVES &
ACTIVITIES
§ Enhance product
range
§ Provide Customer
knowledge
§ Increase channel
focus & productivity
§ Strengthen brand
OUTCOME OF BUSINESS
MODEL & ORGANIZATIONAL
ASSET INITIATIVES &
ACTIVITIES
§ Enhance Operations/
Asset Mgmt. reliability
§ Enhance consistency
of investment returns
§ Develop Product
Innovation process
§ Product Fulfillment Process
Initiative #1, #2, #3
§ Product Distribution Process
Initiative #1, #2, #3
§ Product Innovation Process
Initiative #1, #2, #3
§ Develop/ hire to
obtain capabilities
§ Align product creation
§ Tap CRM
§ Extend through
collaborations
§ HC Initiative #1, #2, #3
§ IT Initiative #1, #2, #3
§ Alignment Initiative #1, #2, #3
§ Strategic Collaboration
Initiative #1, #2, #3
NB EV
Desired
Volume
Reliability Innovation
Desired
Mix
Competitive
Returns
Innovative
features
Competent
Planners
Sales
Support
Brand
Support
Innovative
Products/ Range
Channel
Partner
Financial
Perspective
Customer
Perspective
ChannelPartner
Perspective
BusinessModel
Perspective
L&G
Perspective
Product
Fulfillment
Product
Dist.
Product
Innovation
FOCUS
Strategic Job
Families
Strategic IT
Systems
Strategic
collaborations
Cross Function
Alignment
May be executed also by
Shared Support Units
May be executed also by
Shared Support Units

22. 22
Resources are then planned and committed to implement
Business Model and Organizational Asset Initiatives
Strategy Map (Strategic Business Unit) Scorecard Initiatives Resources
Theme: TRANSFORM PRODUCT MIX Objectives PI/ KPIs Target Owner Initiatives
§ Deliver targets
§ Increase new
segment revenues
§ Increase wallet share
OUTCOME N.A.
§ Increase # of
competent planners
§ Deliver consistent/
competitive returns/
bonus
§ NTM product features
OUTCOME N.A.
§ Enhance product
range
§ Provide Customer
knowledge
§ Increase channel
focus & productivity
§ Strengthen brand
OUTCOME N.A.
§ Enhance Operations/
Asset Mgmt. reliability
§ Enhance consistency
of investment returns
§ Develop Product
Innovation process
§ Initiative #1
§ Initiative #2
§ Initiative #3
§ Initiative #4
§ $ XXX/
Headcount
§ $ XXX/
Headcount
§ $ XXX/
Headcount
§ Develop/ hire to
obtain capabilities
§ Align product creation
§ Tap CRM
§ Extend through
collaborations
§ Initiative #1
§ Initiative #2
§ Initiative #3
§ Initiative #4
§ $ XXX/
Headcount
§ $ XXX/
Headcount
§ $ XXX/
Headcount
NB EV
Desired
Volume
Reliability Innovation
Desired
Mix
Competitive
Returns
Innovative
features
Competent
Planners
Sales
Support
Brand
Support
Innovative
Products/ Range
Channel
Partner
Financial
Perspective
Customer
Perspective
ChannelPartner
Perspective
BusinessModel
Perspective
L&G
Perspective
Product
Fulfillment
Product
Dist.
Product
Innovation
FOCUS
Strategic Job
Families
Strategic IT
Systems
Strategic
collaborations
Cross Function
Alignment
May reside in/ committed
by Shared Support Units
May reside in/ committed
by Shared Support Units

23. 23
Content
1. Overview of BSC
Architecture
3. Customizing BSC to
Strategy
2. Closer look at Internal
Process Clusters

24. 24
Closer look at Internal Processes - BSC groups an
Organization s myriad internal processes into four Clusters
Cluster 1 - Customer Management Cluster
Understanding customers and value proposition that attracts them is fundamental to any strategy. Customer Management
Processes help company acquire, sustain, and grow long-term, profitable relationship with targeted customers, viz.:
1. Customer Selection – Identifying customer segments attractive to the company; Craft the value proposition to appeal to
these segments; Create a brand image that attracts customers in these segment to the company's products and
services
2. Customer Acquisition – Communicate the message to the market, secure prospects; Covert prospects to customers
3. Customer Retention – Ensure quality, correct problems; Develop loyalty in customers.
4. Growing Relationship with Customers – Get to know customers, build relationships with them; Increase the company s
share of targeted customers purchasing activity
Cluster 2 - Innovation Management Cluster
Processes that help companies create competitive advantage by bringing innovative products – well matched to target
customers needs – to the market fast and efficiently. Successful Innovation drive customer acquisition and growth and
margin enhancement and customer loyalty and includes four important processes, viz.
1. Identify opportunities for new product and services – Anticipating future customer needs; Developing more effective
product and services
2. Manage the research and development portfolio – Actively manage the product/ offer portfolio for superior innovation
and customer positioning, performance and profitability; Extend current product platforms into new and existing markets;
Extend product portfolio through collaboration
3. Design and develop new products and services- Concept development; Product planning; Detailed product and process
engineering
4. Bring the new products and services to market – Rapid launch of new products; Effective production of new products;
Effective marketing, distribution and sales of new products

25. 25
Closer look at Internal Processes - BSC groups an
Organization s myriad internal processes into four Clusters
Cluster 3 – Operations Management Cluster
Operations Management Processes are the basic, day-to-day processes by which companies produce their existing
products and services and deliver them to customers.
Successful management of processes that deliver goods and services to customers vital in helping organizations improve
the cost, quality and responsiveness of critical processes, and includes four processes, viz.:
1. Develop and sustain supplier relationships
2. Produce products and services
3. Distribute and deliver products and services to customers
4. Manage Risk
Cluster 4 – Regulatory & Social Cluster
Regulatory and social processes help organizations continually earn the right to operate in the communities and countries in
which they produce and sell

26. 26
Customer Management Processes
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Business Model (Int. Process)
Perspective
Learning &Growth Perspective
Human Capital
Information Capital
Organizational Capital - Culture, Leadership, Alignment, Teamwork
Sales Production Support Growth & Development Support
Product Quality/
Range Sales Support Admin Support Brand Support Career & Comp.
Agency Mgmt.
Support
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance Customer
Value
Increase
Asset Utilization
Product/ Service Attributes Relationship Image
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Channel Value Proposition
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
§ Customer Selection
§ Customer Acquisition
§ Customer Retention
§ Customers Growth
§ Opportunity Identification
§ R&D Portfolio
§ Design/ Develop
§ Launch
§ Supply
§ Production
§ Distribution
§ Risk Management
§ Environment
§ Safety and Health
§ Employment
§ Community

27. 27
Closer look at Customer Management Processes
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Expand Revenue
Opportunities
Enhance Customer
Value
Customer
(External)
Perspective
Customer Value Proposition
Improve Cost
Structure
Increase
Asset Utilization
Channel Value Proposition
Business Model (Int. Process) Perspective
Sales Production Support Growth & Development Support
Product Quality/
Range Sales Support Admin Support Brand Support Career & Comp.
Agency Mgmt.
Support
Channel
Partner
(Agency)
Perspective
Customer Selection Customer Acquisition Customer Retention Customer Growth
§ Understand segments
§ Screen unprofitable customers
§ Target high value customers
§ Manage the brand
§ Communicate Value Proposition
§ Customize mass marketing
§ Acquire/ convert leads
§ Premium Customer Svc
§ Sole-Source partnerships
§ Service excellence
§ Loyal customers
§ Cross-selling
§ Solution selling
§ Partnering/ Integrated Mgmt.
§ Customer education
Human
Capital
§ Market research
§ Profitability analysis
§ Market communication
§ Telemarketing
§ Product line knowledge
§ Customer communications
§ Partner management
§ Call centre protocols
§ Product line knowledge
§ Problem resolution
§ Customer feedback
§ Consultative sales skills
§ Customer/ Industry knowledge
§ Product line knowledge
Information
Capital
§ Customer database
§ Customer analytics
§ E-polling/ sampling
§ Customer profitability analysis
§ Database marketing
§ Lead management
§ Sales force automation
§ Web site design
§ Customer interaction centre
§ Problem tracking system
§ Order Mgmt. System
§ Customer information feedback
§ Portfolio planning models
§ Integrated order management
Org
Capital
§ Customer focused culture
§ Personal goal alignment
§ Best practice sharing
§ Customer focused culture
§ Personal goal alignment
§ Best practice sharing
§ Customer focused culture
§ Personal goal alignment
§ Best practice sharing
§ Customer focused culture
§ Personal goal alignment
§ Best practice sharing
Learning & Growth Perspective
Product/ Service Attributes Relationship Image
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features

28. 28
Closer look at Customer Management Processes
Perspective Objective Measure
Financial
§ Create new sources of revenue
§ Increase revenue per customer
§ Increase customer profitability
§ Improve sales productivity
§ Revenue from new customers
§ Share of wallet
§ Profits per customer (ABC)
§ Cost of sales by channel
Customer
§ Increase customer satisfaction with
value proposition
§ Increase customer loyalty
§ % customers highly satisfied (survey)
§ Customer retention
§ Depth of relationship
§ % business from customer referrals
InternalProcess
Selection
§ Under customer segments
§ Screen unprofitable customers
§ Target high value customers
§ Manage the brand
§ Contribution by segment/ Market share in target segment
§ Percentage of unprofitable customers
§ No. of strategic accounts
§ Customer survey on Brand awareness/ preference
Acquisition
§ Communicate value proposition
§ Customer mass marketing
§ Acquire new customers
§ Brand awareness (survey)
§ Campaign response rate
§ No. of customer using promotions to sample product
§ Cost per customer acquired/ Life time value (est.) of customer acquired
§ No. of leads/ conversion rate
Retention
§ Provide premier customer service
§ Create sole source partnerships
§ Provide service excellence
§ Create highly loyal customers
§ No. of premier customers/ Time for customer to resolve concerns
§ No. of referrals to new customers
§ No. of new customer acquired from referrals by existing customers
§ % revenue from sole source
§ Service levels (by channel)
Growth
§ Cross selling
§ Solution selling
§ Partnering/ integrated management
§ Customer education
§ No. of products per customer
§ Cross market revenues
§ No. jointly developed service agreements
§ No./ $ from gain sharing agreements
§ Hours with customers

29. 29
Closer look at Customer Management Processes
Perspective Objective Measure
Learning&Growth
Human
Capital
§ Develop strategic competencies
§ Attract and retain top talent
§ Human capital readiness
§ Key employee turnover
Information
Capital
§ Develop strategic CRM portfolio
§ Increase knowledge sharing
§ Application portfolio readiness
§ No. of Customer Knowledge Mgmt. System employees
Organization
Capital
§ Create customer focused culture
§ Create personal goal alignment
§ Customer survey
§ Employee objectives linked to BSC

30. 30
Innovation Management Processes
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Sales Production Support Growth & Development Support
Product Quality/
Range Sales Support Admin Support Brand Support Career & Comp.
Agency Mgmt.
Support
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance Customer
Value
Increase
Asset Utilization
Channel Value Proposition
Business Model (Int. Process)
Perspective
Learning & Growth
Perspective
Human Capital
Information Capital
Organizational Capital - Culture, Leadership, Alignment, Teamwork
Product/ Service Attributes Relationship Image
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
§ Customer Selection
§ Customer Acquisition
§ Customer Retention
§ Customers Growth
§ Opportunity Identification
§ R&D Portfolio
§ Design/ Develop
§ Launch
§ Supply
§ Production
§ Distribution
§ Risk Management
§ Environment
§ Safety and Health
§ Employment
§ Community

31. 31
Closer look at Innovation Management Processes
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Sales Production Support Growth & Development Support
Product Quality/
Range Sales Support Admin Support Brand Support Career & Comp.
Agency Mgmt.
Support
Channel Value Proposition
Business Model (Int. Process)
Perspective
Learning & Growth
Perspective
Identify Opportunity Manage the Portfolio Design & Develop Launch
§ Anticipate customer needs
§ Discover new opportunities
§ Choose and manage mix of
projects
§ Extend products to new
applications
§ Collaborate
§ Supply
§ Production
§ Distribution
§ Risk Management
§ Environment
§ Safety and Health
§ Employment
§ Community
High Performance
Products First to Market
Revenue from
New Products
Manage Total Life
Cycle Production Costs
Gross Margins:
New Products
Extend into
New Markets
Human Capital Information Capital Organization Culture
Multi-disciplinary Skills
Technology to explore, integrate
and Speed to Market
Culture of Creativity
& Innovation

32. 32
Closer look at Innovation Management Processes
Perspective Objective Measure
Financial
§ Revenue growth from existing customers
§ Revenue growth from new customers
§ Manage life cycle costs
§ Revenues and margins from existing customer from product released
in last 12 months
§ Percent growth in sales to existing customers
§ Revenues and margins from new customers with new products
§ Maintenance cost as percent of total manufacturing costs
Customer
§ Offer enhanced product/ service
functionality to customers
§ First to market with new product service
§ Extend products/ services to new segments
§ Specific performance attribute of new product/ service
§ Lead time relative to competitors
§ No. of new products/ service first to market
§ Percent of products launches on time
§ No. of new application from platform products
§ Revenue from new markets and segments
InternalProcess
Identify new
opportunities
§ Anticipate future customer needs
§ Discover and develop new, more effective
products and services
§ Time spent with key customers learning about their future
opportunities and needs
§ Number/ percent of new projects launched based on client input
§ Number of nee projects or concepts presented for development
§ Number of new value-added services identified
Manage the
R&D
Portfolio
§ Actively mange the product portfolio for
superior innovation and customer
positioning, performance and profitability
§ Extend current product platforms into new
and existing markets
§ Extend product portfolio through
collaboration
§ Actual vs. desired mix of projects (advanced development, platform,
derivative and outsourced)
§ Actual vs. desired spending on projects of each type
§ Technology ranking (independent peer review of current technology
capabilities)
§ Net present value of products in project pipeline
§ No. of project leveraged from existing platforms that are targeted at
new markets
§ No. of life cycle extension projects
§ No. of licensed products
§ No. of joint projects in new or emerging markets
§ No. of technology or product partners

33. 33
Closer look at Innovation Management Processes
Perspective Objective Measure
InternalProcess
Design &
Develop New
Products &
Services
§ Manage the project portfolio
§ Reduce development cycle time
§ Manage development cycle cost
§ No. of patents; No. of patent citations
§ Project yield (Percent of projects advancing from stage to stage)
§ No. of project entering each phase of product development process
§ No. of projects delivered on time
§ Average time spent by projects at the development, test, and launch
stages of the development process
§ Total time (Concept to market)
§ Actual vs. budgeted spending on projects at each development stage
Bring new
Products to
Market
§ Rapid launch of new products
§ Effective production of new products
§ Effective marketing, distribution, and sales
of new products
§ Time from start of pilot production until full volume achieved
§ No. of re-design cycles
§ No. of new products launched or commercialized
§ Manufacturing cost of new products (actual vs. targeted)
§ Manufacturing process yield for new products (successful vs. killed
projects)
§ Consumer satisfaction or complaints about new products launched
§ Six month revenues from new products (actual vs. budgeted)
Learning&Growth
Human
Capital
§ Achieve deep functional expertise
§ Develop effective interdisciplinary and
cross-functional teams
§ Strategic skill coverage in key R&D positions
§ Percent of R&D employees who work effectively in inter-disciplinary
and multi-functional project development teams
§ Percent of R&D employees capable of effective project management
leadership
Information
Capital
§ Use technology for rapid product launch
§ Capture leading knowledge from global
industry
§ No. of ideas from external sources
§ Peer review of current scientific and technological capabilities
Organization
Capital
§ Foster a culture of innovation § No. of suggestions for new products and capabilities
§ Employee culture survey for innovation and change

34. 34
Operations Management Processes
Financial
Perspective
Sustain growth in
Shareholder Value
Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Sales Production Support Growth & Development Support
Product Quality/
Range Sales Support Admin Support Brand Support Career & Comp.
Agency Mgmt.
Support
Expand Revenue
Opportunities
Improve Cost
Structure
Enhance Customer
Value
Increase
Asset Utilization
Channel Value Proposition
Business Model (Int. Process)
Perspective
Learning & Growth
Perspective
Human Capital
Information Capital
Organizational Capital - Culture, Leadership, Alignment, Teamwork
Product/ Service Attributes Relationship Image
Price Quality/
Returns Availability Selection Service ReputationFunctionality/
Features
Customer Mgmt.
Processes
Innovation Processes Operations Mgmt.
Processes
Regulatory & Social
Processes
§ Customer Selection
§ Customer Acquisition
§ Customer Retention
§ Customers Growth
§ Opportunity Identification
§ R&D Portfolio
§ Design/ Develop
§ Launch
§ Supply
§ Production
§ Distribution
§ Risk Management
§ Environment
§ Safety and Health
§ Employment
§ Community

35. 35
Closer look at Operations Management Processes
Financial
Perspective Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Business Model (Int. Process)
Perspective
Sales Production Support Growth & Development Support
Product Range Sales Support Admin Support Brand Support Career & Comp.
Agency Mgmt.
Support
New Revenue
SourcesIndustry Cost Leader
Increase Share
of Customer
Channel Value Proposition
Learning & Growth
Perspective
Develop Supplier Relations Produce Product & Services Distribute to Customers Manage Risk
§ Lower Cost Of Ownership
§ Just In Time Delivery
§ High Quality Supply
§ New Ideas From Suppliers
§ Supplier Partnerships
§ Outsource Mature Non-
strategic Services
§ Lower Cost Of Production
§ Continuous Improvement
§ Process Cycle Time
§ Fixed Asset Utilization
§ Working Capital Efficiency
§ Lower Cost To Serve
§ Responsive Delivery Time
§ Enhance Quality
§ Financial Risk
§ Operating Risk
§ Technological Risk
Sustain growth in
Shareholder Value
Product/ Service Attributes
Maximize Use of
Existing Assets
Competitive
Prices
Low
Total Cost
Perfect
Quality
Speedy, Timely
Purchase
Excellent
Selection
Human Capital Information Capital Organization Culture
Skills in Quality Management/
Process Improvement
Technology that Facilitates
Process Improvement
Culture of Continuous
Improvement

36. 36
Closer look at Operations Management Processes
Perspective Objective Measure
Financial
§ Become Industry Cost Leader
§ Maximize Use of Existing
Assets
§ Increase revenue from
customers
§ Cost per unit, benchmarked against competitors
§ Percent of annual reductions in cost per unit of output
§ Percent of cost budget variance
§ General selling, and administrative expenses per unit of output
§ Investment efficiency (NPV of new projects to total commitment)
§ Revenue from acquiring new customers
Customer
§ Lower customers cost; Increase
customers' profit
§ Deliver zero defect products
and services to customers
§ Deliver products on time
§ Offer excellent selection
§ Price, relative to competitors
§ Customers cost of ownership
§ No. of customer complaints
§ No. of incidents of warranty and field service repairs
§ Percent on-time delivery
§ Customer lead time (from order to delivery)
§ Index of product or service offering measuring percent of customer needs
covered
InternalProcess
Develop &
Sustain Supplier
Relationships
§ Lower Cost Of Ownership
§ Achieve Just In Time supplier
capability
§ Develop High Quality Supply
capability
§ Use New Ideas from Suppliers
§ Achieve Supplier Partnerships
§ Outsource Mature Non-
strategic Products/ Services
§ Activity based costing of acquiring materials and services
§ Cost of purchasing as percentage of total purchase price
§ Supplier ratings: Quality, delivery, cost
§ Lead time from order to receipt
§ On time deliver percentage
§ Percent of late orders
§ Percent of orders delivered directly to production process by suppliers
§ PPM of defects/ incoming orders
§ Number of suppliers providing services directly to customers
§ No. of outsourced relationship
§ Benchmarked performance of outsourcing partnerships

37. 37
Closer look at Operations Management Processes
Perspective Objective Measure
InternalProcess
Produce
Products &
Services
§ Lower Cost Of Production
§ Continuous Improvement
§ Process Cycle Time
§ Fixed Asset Utilization
§ Working Capital Efficiency
§ Activity based cost of key operating processes
§ Marketing, selling, distribution & administration expense as percent of total costs
§ No. of processes with substantial improvements
§ No. of inefficient or non-value added processes eliminated
§ Cycle time (from start of production until product completed)
§ Percent of capacity utilization
§ Flexibility (range of products/ services that processes can produce and deliver)
Distribute
Products &
Services to
Customers
§ Lower Cost To Serve
§ Responsive Delivery Time
§ Enhance Quality
§ Activity based costing of storage and delivery to customers
§ Percent of customers reached via. Low cost-to-serve channels, e.g switching
customers from manual and telephone transactions to electronic ones
§ Lead time, from order to delivery
§ Time from completion of product until ready for use by customers
§ Percent of items delivered with no defects
§ Number and frequency of customer complaints
Risk
Management
§ Manage Financial Risk/
Maintain high credit quality
§ Manage Operating Risk
§ Manage Technological Risk
§ Bad debt percentage
§ Percent of uncollectible receivables
§ Exposure of losses from interest rates, foreign exchange etc.
§ Order backlog
§ Percent of capacity from existing and backlogged orders
§ Technology ranking of products and processes compared to competitors

38. 38
Closer look at Operations Management Processes
Perspective Objective Measure
Learning&Growth
Human Capital
§ Develop skills in quality
management and process
improvement
§ Percent of employees trained in quality management techniques
§ No. or percent of employees qualified in six sigma quality programs
§ Percent of employees with knowledge and training in activity based management,
just in time etc.
Information
Capital
§ Technology that facilitates
process improvement and
customer satisfaction
§ Percent of employees who obtain immediate feedback from operations
§ Percent of customers who can track order status electronically
Organization
Capital
§ Culture for continuous
improvement
§ Employee survey on culture for continuous improvement and knowledge sharing
§ Number of new process improvement ideas generated
§ Percent of employee process improvements suggestions adopted
§ No. of ideas for quality and process improvement shared across multiple
organizational units
§ Performance improvement from employees suggestions and action

39. 39
Content
1. Overview of BSC
Architecture
3. Customizing BSC to
Strategy
2. Closer look at Internal
Process Clusters

40. 40
Customizing BSC to strategy – Overview
Strategy is about Making Choices and Keeping Focused…
Strategy is Deciding What to Do, And more importantly, What Not to Do
§ No organization can hope to excel at every single objective in the different Internal Process
Clusters and/ or Learning and Growth perspective.
§ The Value Proposition in the customer perspective, the critical internal processes, and intangible
assets in the Learning and Growth perspective of a strategy map will be different for companies
pursuing different strategies.
§ Internal processes differ in priorities depending upon the strategy to be adopted by organization:
§ Company competing on Complete Customer Solution Strategy should highlight Customer
Management as most important
§ Company competing on Product Innovation and Leadership Strategy – Focus on Innovation
§ Company competing on Low Total Cost Strategy – Focus on Operations Management
§ The Art of Strategy is to identify and excel at the critical few processes that are the most important
to the Customer Value Proposition. In line with strategy, all processes selected should be
managed well, but a few strategic processes must receive special attention and focus, since these
processes create the differentiation of the strategy.
§ All selected Internal Processes across four clusters should be aligned and integrated to enable
the organization to deliver a Differentiated Value Proposition – one that is valued by its target
customer segments – from its competitors

41. 41
Closer look at Complete Customer Solutions strategy
Companies pursuing Complete Customer Solutions Strategy:
Value Proposition
§ Emphasize building long lasting relationships with customers – Making customers feel that the company
understands their business or personal issues, and they can trust the company to develop customized
solutions tailored to them
§ Emphasize Customer objectives relating to completeness of solution (selling multiple, bundled products
and services), exception service (before and after sale) and the quality of relationship
§ Often acquire customers through a single, entry level product, before deepening the relationship to
encompass sale of multiple, related products to retain customers and produce high lifetime profitability
Internal Processes
§ Develop deep understanding about what their customer value, build strong, trusted relationships with
customers, bundle existing products and solutions into individually customize solutions - Customer
Management Processes Cluster is most important
§ Do not have lowest Operations Management Processes. Instead they support the customer
management processes by offering customers a broad product and service line, bundling products and
services from suppliers, along with company s own offerings, allow customization of these products and
services, and delivering these to customers through seamless distribution channels
§ Have Innovation Management Processes that focus on finding new ways to create value for customers,
understanding more about customers future needs, rather than fundamental product innovation. Also
directed at finding new ways for customers to access and use company s offerings
§ Have Regulatory and Social Processes that focus on gaining regulatory approval to offer services that
cut across traditional industry barriers, getting regulatory approval to bundle new services to customers

42. 42
Closer look at Complete Customer Solutions strategy
Companies pursuing Complete Customer Solutions Strategy:
Learning & Growth Processes
§ Require Human Capital competencies that focus on skills and knowledge about the diverse products
and services the company offers to its targeted customer segments. Employees must have excellent
knowledge about and be highly sensitive to targeted customers and their preferences.
§ Require Information Capital that focuses on data about customers and analytic capabilities to learn
more about customer preferences and buying patterns.
§ Extensive, preferably proprietary, Customer databases can provide a sustainable source of
competitive advantage for customer focused companies.
§ Robust CRM system enables company to have an integrated and comprehensive view of all
transactions each customer has with the company.
§ Data Mining capabilities enables company to unique insights into constructing customer
segments and buying behavior.
§ Knowledge Management systems enables transferring of knowledge gained from customers to
develop new products and services offerings and to better serve customers
§ Organizational Capital:
§ Foster a customer-centric culture and climate among employees.
§ Employees understand the primacy of customers and the value the company gains from
developing and maintaining long-standing relationships with customers

43. 43
BSC Strategy Map Template for Complete Customer
Solutions Strategy
Financial
Perspective Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Business Model (Int. Process)
Perspective
Sales Production Support Growth & Development Support
Product Range Career & Comp.
Agency Mgmt.
Support
Revenue from
New Customers
Manage Total Life
Cycle Product Costs
Increase Account
Share with Customers
Channel Value Proposition
Learning & Growth
Perspective
Customer Mgmt. Innovation Mgmt. Operations Mgmt. Regulatory & Social
§ Create customized solutions
§ Build strong customer
relationships
§ Develop knowledge about
customers
§ Identify new opportunities to
serve customers
§ Anticipate future customer
needs
§ Deliver broad product/ service
line
§ Customize product/ service
offerings
§ Create network of suppliers for
extended product/ service
capabilities
§ Gain regulatory approval for
new offerings
§ Contribute to community
Sustain growth in
Shareholder Value
Sales Support
Maximize Use of
Existing Assets
Product/ Service Attributes
Customer
Retention
Quality of Solutions
Provided to Customers
Customer Lifetime
Profitability
No. of Products/ Services
Per Customer
Admin Support Brand Support
Human Capital Information Capital Organization Culture
Customer databases
CRM & Data Mining
Capabilities
Transfer of
Knowledge
Customer
Focused
Diverse Product/
Services Skills
Customer Mgmt.
Skills

44. 44
Closer look at Product Innovation and Leadership strategy
Companies pursuing Product Innovation and Leadership Strategy:
Value Proposition
§ Have Value Propositions that emphasizes particular features and functionality customers value and
are willing to pay more to receive
§ Are First-To-Market with innovative or enhanced features and functionality
§ Strive to extend superior functionality of their products into multiple market segments
Internal Processes
§ Excel at anticipating customers needs and discovering new opportunities for superior products and
services – Innovation Processes Cluster is most important
§ Do not have lowest Operations Management Processes. Instead they emphasize robust and flexible
processes to accommodate continual introduction of new products, changes in product characteristics
based on feedback from marketplace and experimentation
§ Have Customer Management Processes that focus on:
§ Identifying leading-edge customers and learning from them
§ Educating customer about the benefits from improved functionality
§ Are vigilant at managing Regulatory and Social Processes associated with their new products and
have good relationship with regulators so that new products and services receive necessary regulator
approval, and that delays associated with regulatory approval are minimized

45. 45
Closer look at Product Innovation and Leadership Strategy
Companies pursuing Product Innovation and Leadership Strategy:
Learning & Growth Processes
§ Require High level of Human Capital competency and Effective interaction between Product
Development Teams with employees from marketing, operations and finance etc.
§ Exploit Information Capital/ Technology to Achieve rapid introduction of new products, Enhance
communication of knowledge and project experiences across functions, departments and geography
and Foster sharing of Best Practices
§ Organizational Capital:
§ Emphasize Teamwork amongst internal functions/ team and active involvement with external
technical communities, conferences, leading universities to tune in to advances that can affect
the company's products and services
§ Emphasize/ Foster Culture of innovation, disruption and change; Foster acquisition of knowledge
from outside the company

46. 46
BSC Strategy Map Template for Product Innovation and
Leadership Strategy
Financial
Perspective Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Business Model (Int. Process)
Perspective
Sales Production Support Growth & Development Support
Product Range Admin Support Brand Support Career & Comp.
Agency Mgmt.
Support
Revenue from
New Products
Reduce Cost to
Serve
Gross Margins:
New Products
Channel Value Proposition
Learning & Growth
Perspective
Customer Mgmt. Innovation Mgmt. Operations Mgmt. Regulatory & Social
§ Educate customers about
complex new products/
services
§ Capture customer ideas
from new products/
services
§ Disciplined high performance
product development
§ Produce development time:
from idea to market
§ Flexible robust processes
§ Rapid introduction of new
products
§ Supply capacity for rapid growth
§ In-line experimentation and
improvement
§ Rapid regulatory approvals
Sustain growth in
Shareholder Value
Product/ Service Attributes
First to Market
High Performance Products:
Better Quality/ More innovative Features etc.
New Customer Segments
Sales Support
Human Capital Information Capital Organization Culture
Deep functional
expertise
Technology that facilitates
Rapid Product Introduction
Creativity &
Innovation
Creative, Versatile
Employees/ Cross Functional
Teamwork

47. 47
Closer look at Low Total Cost Strategy
Companies pursuing Low Total Cost Strategy:
Value Proposition
§ Offer customers highly competitive prices combined with consistent quality, ease and speed of
purchase, and reduced product selection
§ Reduces customers total cost of acquiring and using company s products through consistent
quality and reducing time required to purchase and receive the product
§ Keeps own costs down by offering customers a selection that is somewhat limited, but that meets
the needs of most of its targeted customers; Reducing range of offerings allows company to keep
production and service delivery costs low, enabling a low total cost value proposition.
Internal Processes
§ Have highly efficient operating processes that are lowest cost in the industry and also be consistent,
high quality and highly responsive, with short cycle times; Distribution processes to customers must also
be low total cost and timely - Operations Management Process Cluster is most important
§ Have Customer Management Processes that focus on providing convenience and ease of access for
customers. Objectives include:
§ Simple, accessible, ordering processes, such as Internet etc
§ Superb post sales service on operational issues
§ Robust Market Research to understand the most preferred limited set/ range of products, services
and options desired by large segments of customers, and producing limited product and service
line to keep operating costs down
§ Are Product Followers (not Product Leaders) and hence do not invest a great deal in product and
service Innovation Management. They require capabilities for replicating innovations done by Product
Leaders. Main focus is on Process Innovation to increase efficiency and reduce cost

48. 48
Closer look at Low Total Cost Strategy
Companies pursuing Low Total Cost Strategy:
Learning & Growth Processes
§ Require Human Capital competencies that focus on process improvements – Knowledge of six sigma,
just-in-time and activity-based-costing so that employees have the ability and knowledge to continually
lower costs, reduce cycle times, and improve quality.
§ Have Information Capital objectives that relate to:
§ Enhancing the customers buying experience (ease of ordering) and lowering the company s and
its customers costs of ordering and acquiring products and services
§ Providing accurate and timely data to employees about the cost, quality, and cycle times of
processes and the company s customers, to enable continuous improvement
§ Enabling internal and external benchmarking of processes so that best practices can be
identified and shared across organization
§ Have Organizational Capital that emphasize process learning, continuous improvements and sharing
of best practices across the organization.

49. 49
BSC Strategy Map Template for Low Total Cost Strategy
Financial
Perspective Productivity Strategy Revenue Growth Strategy
Customer
(External)
Perspective
Customer Value Proposition
Channel
Partner
(Agency)
Perspective
Business Model (Int. Process)
Perspective
Sales Production Support Growth & Development Support
Product Range Career & Comp.
Agency Mgmt.
Support
Revenue from
New Customers
Become Industry
Cost Leader
Increase Account
Share with Customers
Channel Value Proposition
Learning & Growth
Perspective
Customer Mgmt. Innovation Mgmt. Operations Mgmt. Regulatory & Social
§ Provide convenient order
handling processes
§ Provide desired variety of
products and services
§ Process innovation
§ Manage capital projects
§ Outstanding supplier
relationships
§ Efficient timely distribution
§ Manage risk
§ Produce goods and services;
Cost, Quality and Time
§ Gain regulatory approvals for
new low cost channels to market
§ Contribute to community
Sustain growth in
Shareholder Value
Sales Support
Maximize Use of
Existing Assets
Product/ Service Attributes
Speedy Purchase
Lowest Cost
Supplier Appropriate SelectionConsistent
Quality
Admin Support Brand Support
Human Capital Information Capital Organization Culture
Better, Faster, Cheaper
Process Improvements
Facilitate
Knowledge Sharing
Replicate
Best Practices
Process Improvement
Capabilities
Electronic Supplier/
Customer Relationships

50. 50
End of Pack