Balanced Scorecard strategy and approach

1. TAVICO
Zuidstationstraat 42
9000 Gent (Belgium)
Balanced Scorecard
Presentation
A philosophy and a method to achieve
the strategy of the company better and faster

2.  Created in 1989
 Consultants - trainers full time
 Active in 5 area : Management methods, People
management, Quality, Personal development, Sales
 Industry and services
 Long term relations with the customer
 Result oriented
 Taylormade approach is our most important strenght
TAVICO
Zuidstationstraat 42
9000 Gent (Belgium)

3. CONTENT :
1. Facts, challenges and proposed solution
2. Balanced Scorecard : the concept
3. Balanced Scorecard: the added value
4. What and how to measure?
5. How to transform the strategy in an action plan
6. Who develop a Balanced Scorecard?
7. The support structure
8. The action plan
9. The training needs
10. The constraints and the advantages

4. THE CHALLENGES OF THE COMPANIES
TODAY
 How to transform the company’s strategy( fastly) in
concrete actions?
 How to act in order obtain the commitment of all the
stakeholders worldwide?
 What to do in order to obtain coherence in the whole
organization?
 What to act in order to do in an easy way the important
things to succeed?
 How to adapt rapidly the strategy when changes occur?

5. 1.FACTS, CHALLENGES AND
PROPOSED SOLUTION
Worldwide surveys suggest that companies fail because:
 They do not enough efforts to develop a realistic strategy
 They involve and share not enough their strategy with
their managers( and employees)
 they are unable to transform their strategy( fastly) in action

6. THE PROPOSED SOLUTION BY ROBERT S. KAPLAN
AND DAVID P. NORTON
 A strategy focused organisation instead of a:
 process focused………………... ISO 9000
 customer focused……………… CRM
 improvement focused……………Kaizen
 method and figures focused……. EFQM

7. THE STRATEGY FOCUSED ORGANIZATION: 5 KEY
PRINCIPLES
 Translate the strategy to operational terms
 Align the organization to the strategy
 Make the strategy everyone’s, everyday job
 Make the strategy a continual process
 Mobilize change trough strong effective leadership

8. 2. BALANCED SCORECARD: THE CONCEPT
 A management approach centered on :
- A clear strategy
- Coherence
- Objectives
 A company culture wich implicate the employees in the
strategy of the company
 A measurement approach( Scorecard) with 20 to 25
performance indicators
 A focus on 4 key issues: Business results, customer
satisfaction, processes, motivation and competence

9. THE 4 AXIS OF THE BALANCED SCORECARD
1. Financial
2.Customers
3. Processes
4. Employees
Strategy
and Vision
What level of motivation and what
competences
in order to realize the strategy?
What results to satisfy the shareholders and
assure the future of the company ?
What are the expectations of our
customers
and what to do to satisfy them?
How to organise the company in
order to be efficient ?

10. Translating a Mission into desired outcomes
MISSION Why we exist?
Core Values What we believe in?
Vision What we want to be
Strategy Our game plan
Balanced Scorecard Implementation and
focus
Strategic Initiatives What we need to do
Personal Objectives What I need to do
Strategic outcomes
Satisfied shareholders Delighted customers Effective processes Motivated and
prepared Workforce

11. BALANCED SCORECARD: THE LINK WITH THE
STRATEGY
To inform about
the strategy
Balanced Scorecard
To determine objectives
and means
to achieve the strategy
To use recognition
systems based
on the results
To receive feedback
on the strategy
and improve it

12. 3.THE ADDED VALUE OF THE BALANCED
SCORECARD
 To communicate the strategy and obtain consensus
 To explain the strategy to all the employees
 To reflect regularly on the validity of the strategy
 To transform the strategic goals in concrete and
measurable objectives
 To align the whole organization on what’s essential
 To obtain better and faster information about the
implementation of the strategy

13. 4. WHAT AND HOW TO MEASURE ?
 Financial perspective :
 Examples :
 Net profit
 Revenue
 Return on investment
 Return on required equity
 Cash Flow
 Return on assets…..
 Customer perspective:
 Examples :
 Service satisfaction
 Type and number of complaints
 fidelity
 Market share
 Cross selling results
 Acquisition of new customers

14.  Internal process perspective:
- Examples:
 The mastering of the process
 The quality of the process
 Cost of the process
 Benchmarking ( internal company, competitors, others)
 Number, gravity and occurrence of dysfunctions
 Employees perspective :
- Examples:
 Level of motivation
 productivity
 Level of competences
 Absenteism
 Image of the company by graduates

15. IMPORTANT
 The Balanced Scorecard may not be a cluster of independent
indicators
 The 20 to 25 indicators must be coherent, compatible and
reinforce each other

16. 5. HOW TO TRANSFORM THE STRATEGY IN
AN ACTION PLAN
 Listen to the market
 Define a strategy and communicate it( strategic map )
 Determine Key Succes Factors to realize the strategy
 Transform the key succes factors in performance indicators
(max 6 to 8)
 Determine target objectives( your business dream )
 Make a 3 year plan and determine the objectives for the first
year
 Act , control, measure, recognize

17. 6. WHO DEVELOP A BALANCED
SCORECARD ?
 The executive comittee for the whole company
 Each strategic entity* which as autonomy and profit
responsibility
 In a transversal approach
* Has the entity:
 A own mission ?
 A Strategy ?
 External and – or internal customers ?
 Processes ?

18. 7.THE SUPPORT STRUCTURE
 The management team
 A core team (with at least one member of the
management team)
 The process owner ( must be a member of the
management team)
 The managers
 The employees
 An external support

19. 8. ACTION PLAN
1. Preparation Who ? Duration ? Volume
consultant
1.1. Inform management team
1.2. Decide core team and « process owner »
1.3. Training core team and process owner
1.4. Develop the company concept and determine a pilot
1.5. Validate the concept
Consultant
Mgt. Team
Core team
Core team
Executives
0,5
-
3 x 0,5
2
1
1
0,5
3
2
2
2. Develop the strategy
2.1. Describe the strategy
2.2. Communicate it to the managers.
2.3. Inform the employees
Mgt. Team
Executives
Executives
2 3
3. Develop Balanced Scorecards (by entities)
3.1. Train the managers
3.2. Define performance indicators and target objectives.
3.3. Define the objectivs for the next year
3.4. Do a SWOT analysis
3.5 Develop an action plan
3.6 Validate it
Cadres
Core team
Consultant
½
½
½
½
4

20. 4. Consolidation and validation Who ? Duration? Volume
consultant
4.1. Consolidation of the output
4.2. Synthesis
4.3. Validation.
Core team
Core team
Executives
2
0,5
0,5
2
0,5
0,5
5. Action
5.1. Plan the actions
5.2. Inform employees
5.3 Execute
Managers
Managers
All
0,5
Ongoing
1
5
6. Measurement
6.1.Give feedback
6.2. Analyse results
6.3. Adjust
Core team
Core team
Executives,
Core team,
managers
1
1
2
3
23 to 30
training and
consulting
days

21. 9.THE TRAINING NEEDS
Training
Population
Strategy
map
TQM
principles
Strategy
focused
organization:
what ?
Balanced
Scorecard:
How?
Executives 1 1+
coaching
Core team (2) 1 2 2
Managers 1 1 1 1+
coaching
Employees 1 0,5

22. 10 .THE CONSTRAINTS AND THE
ADVANTAGES
OF THE APPROACH
 Constraints:
 Investing in information, sharing some « confidential » information
 Investing in reflexion
 Listening, persuading, involving, implicating…
 Being pro- active and not reactive
 Advantages
 Everybody focused on what is essential: the achievement of the strategy
 Easier to conduct the company
 Easier to recognize the efforts and the results
 More guarantee to achieve the expected results

23. HOW TO TRANSFORM THE STRATEGY IN
A MANAGEMENT APPROACH
 Step 1:
 Define strategic themes
 Develop strategic objectives
 Create strategic measures
 Step 2:
 Do a Swot analyse
 Determine an improvement plan( 2 to 3 years)
 Define the objectives for the first year
 Communicate it to all
Step 3:
Act
Measure
recognize

24. Exemple
Financier Clients Processus Collaborateurs
Nous voulons passer
de 12 à 15 % de part
du marché
Le taux de
satisfaction de nos
clients doit atteindre
95 % sous peine d’en
perdre un %
Notre processus de
commande doit être
totalement maîtrisé.
Nos collaborateurs
du service X doivent
connaître le
processus de
commande
parfaitement.
Part du marché
15 %
Taux de satisfaction
95 %
Processus de
commande
100 % maîtrisé
Connaissance
100 %
12,8 % 97 % 4 % de rupture de
stock
Les intérimaires font
en moyenne 3
erreurs par jour les
15 premiers jours
Indicateurs
Résultat
Action
Objectifs
Performance
attendue

25. Exemple
Financier Clients Processus Collaborateurs
Nous voulons une
marge brute de 30 %
ce qui suppose que
notre pricing est
plutôt dans la classe
supérieure.
Le client n’achètera
que s’il reçoit un
service hyper rapide.
Notre processus de
service après-vente
doit être le plus
professionnel du
marché.
La connaissance
technique de nos
techniciens doit
permettre de
résoudre toutes les
pannes, sauf
exception.
Indicateurs
Résultat
Action
Objectifs
Performance
attendue

26. BEST PRATICES POUR IMPLIQUER LES
CADRES DANS LA DÉMARCHE
 Communiquer et faire partager la stratégie, les grands
objectifs, les valeurs de l’entreprise.
 Créer des groupes de travail* et leur demander de travailler en
4 phases:
 déterminer les facteurs clés de succès et les transformer en
indicateurs de performance
 vérifier la cohérence des indicateurs de performance des 4 axes
 faire une analyse de situation existante et la faire valider
 Proposer des solutions dans une vision multi-axes.
 Confronter les groupes de travail (ensemble ou à travers les
animateurs)
 Intégrer les objectifs de la Balanced Scorecard dans les
objectifs de département et personnels.

27. BEST PRACTICES POUR ANTICIPER ET GÉRER LES
CONSÉQUENCES DES ACTIONS
 Former les cadres à « sortir du cadre »
 Les motiver à accepter les conséquences des décisions
potentielles à prendre
 Leur apprendre à gérer les conséquences des décisions
 comment faire accepter le changement
 comment motiver, mobiliser

28. HOW TO MEASURE ?
Figures
Perspective
Objectives Measures Targets Initiatives
Financial
Customer 10 7 2023: 9
2024: 7,8
Improve
Quality
Interface
Internal Rethink
CRM process
Learning
and growth
Train in
Communi
cation