An Introduction to the BALANCEDSCORECARD    Ravi Parthasarathy BSc., MHR., MBA (USA)    BSC & OD Expert       ©Peopleplus ...
Profile of Mr. Ravi Parthasarthy• Current: Sr. Vice President & Head Group HR,  Karle Group• Previous: CEO/Director – Peop...
Profile of Mr. Ravi Parthasarthy• Mr. Ravi Parthasarathy is a highly accomplished  Management professional with 30 years o...
Profile of Mr. Ravi Parthasarthy• He brings with him rich experience for having  worked in various Indian Companies such a...
Objectives of this Session•   Recap of Strategic Planning Process•   Birth of BSC and what is BSC•   Barriers to Strategy ...
Strategic Planning ProcessFUTURE            Vision                 Mission                Objectives            Key Result...
Problems of Strategy                               The Balanced  Implementation                                   Scorecar...
Who are the different STAKEHOLDERS of  an Organization and What are they             Interested in?             ©Peopleplu...
What is the Balanced Scorecard?                                           PROFITABLE                                 The B...
Vision-Mission Barrier                                                    Only 5% of the work force                       ...
Vision-Mission Barrier                                                    Only 5% of the work force                       ...
Vision-Mission Barrier                                                Only 5% of the work force                           ...
Vision-Mission Barrier                                      The BSC overcomes Vision- Only 5% of the work force           ...
Vision-Mission Barrier                                                    Only 5% of the work force                       ...
People Barrier                                                                                                            ...
Vision-Mission Barrier                                                    Only 5% of the work force                       ...
Management Barrier                                                                   strategic learning overcomes the     ...
Vision-Mission Barrier                                                    Only 5% of the work force                       ...
Resource Barrier                                     Strategic Resource AllocationBudgets not linked to strategy       ove...
Resource Barrier                                                        Strategic Resource Allocation    Budgets not linke...
Cause and Effect Relationships and the Balanced Scorecard     STRATEGY MAPS – a chain of cause-and-effect logic that conne...
Cause and Effect Relationships and the Balanced Scorecard     A strategy is a set of hypothesis about CAUSE and EFFECT.   ...
The ‘Balance’ in the Balanced Scorecard   1 – Balance between the tangible assets and intangible assets                   ...
The ‘Balance’ in the Balanced Scorecard   2 – Balance between the financial measures and non-     financial measures      ...
The ‘Balance’ in the Balanced Scorecard   3 – Balance between the internal and external constituents                    Re...
The ‘Balance’ in the Balanced Scorecard   4 – Balance between lag and lead indicators of performance                      ...
The VMO KRA PI SPAT RES ModelFUTURE            Vision                                         The Balanced Scorecard trans...
The Balanced Scorecard Model and the      VMO KRA PI SPAT RES Model                Vision – Mission – O           KRA     ...
Measures ©Peopleplus 2010
Thank You !!!Email: pravi202@gmail.com Mobile: +91 9705124824
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NHRDN Virtual Learning Session on Balanced Scorecard-Session II

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  • this is a very nice presentation. Would send a copy for me at marlontmanalo@gmail.com? Thanks in advanced.
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NHRDN Virtual Learning Session on Balanced Scorecard-Session II

  1. 1. An Introduction to the BALANCEDSCORECARD Ravi Parthasarathy BSc., MHR., MBA (USA) BSC & OD Expert ©Peopleplus 2010
  2. 2. Profile of Mr. Ravi Parthasarthy• Current: Sr. Vice President & Head Group HR, Karle Group• Previous: CEO/Director – People Plus Consultants, Director on Board – Anu Labs• Mr. Ravi Parthasarathy has graduated in Science and holds a Post graduate degree in Masters in Human Resources & MBA in International Management & Finance, Marketing from Buffalo University, State University of New York, USA. ©Peopleplus 2010
  3. 3. Profile of Mr. Ravi Parthasarthy• Mr. Ravi Parthasarathy is a highly accomplished Management professional with 30 years of extensive experience in blue-chip companies in India and Singapore having worked in Singapore for over 12 years, with specialization in Process Improvements, Re- Engineering, Productivity and Quality Systems, HR & OD and in Executive Development. He was trained as Trainer in Blue Star and Unilever and has trained over 4000 professionals personally. He is also involved in NGOs and Social welfare organizations. He was active in Singapore Institute of Management for over 10 years and was trained by Dr. Kaplan and Dr. Norton in Balanced Scorecard. ©Peopleplus 2010
  4. 4. Profile of Mr. Ravi Parthasarthy• He brings with him rich experience for having worked in various Indian Companies such as :• Kothari Group of Companies• Taj Group Hotels, Blue Star Ltd., Mumbai• Hindustan UniLever, Mumbai,• Dr. Reddy’s Laboratories Ltd., Hyderabad,• Technip India Ltd, Chennai, etc.• People Plus Consultants, Singapore, USA ©Peopleplus 2010
  5. 5. Objectives of this Session• Recap of Strategic Planning Process• Birth of BSC and what is BSC• Barriers to Strategy Execution• Cause and Effect Relationship Model• Balance in the Balanced Scorecard• Balance Scorecard and the HR Scorecard ©Peopleplus 2010
  6. 6. Strategic Planning ProcessFUTURE Vision Mission Objectives Key Result Areas Performance IndicatorsPRESENT Strategies Action Program Activities Tasks Resources S W O SWOT Analysis T PAST ©Peopleplus 2010
  7. 7. Problems of Strategy The Balanced Implementation Scorecard is: You can’t measure A MEASUREMENT what you cannot Measurement describe System + Alignment You can’t manage A Strategic MANAGEMENT what you cannot Management measure System Focus + You can’t A COMMUNICATION communicate what Communication you cannot describe Tool “Measurement is the foundation of management.” ©Peopleplus 2010
  8. 8. Who are the different STAKEHOLDERS of an Organization and What are they Interested in? ©Peopleplus 2010
  9. 9. What is the Balanced Scorecard? PROFITABLE The BSC GROWTH Retains the Financial traditionalPerspective financial New Revenue Current Business Productivity Use of Assets measures Customer Value Proposition Customer Best in Best Total Best Total CostPerspective Product/Service Solution The BSC links the financial Internal Product Customer Operational measures withPerspective Innovation Intimacy Excellence the drivers of future performance Learning Skills Technology Environmentand Growth ©Peopleplus 2010
  10. 10. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategySource: Kaplan & Norton ©Peopleplus 2010
  11. 11. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategySource: Kaplan & Norton ©Peopleplus 2010
  12. 12. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategySource: Kaplan & Norton ©Peopleplus 2010
  13. 13. Vision-Mission Barrier The BSC overcomes Vision- Only 5% of the work force Mission Barrier through the understands the strategy translation of strategyThe BSC is a shared understanding of the Vision-Mission strategytranslated into: Financial Customer Internal Learning&Growth ©Peopleplus 2010
  14. 14. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategySource: Kaplan & Norton ©Peopleplus 2010
  15. 15. People Barrier „cascading‟ the scorecard One of 4 managers have overcomes the People Barrier incentives linked to strategy STRATEGY TOP-DOWN BOTTOM-UP Profitable Growth employee Financial New Increase Efficie Expand Sources in nt Use of Revenue Current Business Productivi ty of Assets driving the sees his/her strategy to contribution to Customer Value Proposition customer all the strategy Product Service Image Customer scorecard employees at all levels “line of sight” Understand Total Efficient Use NewProducts the Customers Solutions Homebuilder CRM. Productivity . of Assets process Internal scorecard Increase Employee Competence • Employee • Revenue per Satisfaction Employee personal Learning& scorecard Skills Systems Align Personal Goals Growth alignment and focus ©Peopleplus 2010
  16. 16. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategySource: Kaplan & Norton ©Peopleplus 2010
  17. 17. Management Barrier strategic learning overcomes the Strategy is not regularly Management Barrier discussed and prioritized The Balanced Scorecard translates the vision and strategy into a coherent set of measures in four balanced perspectives Strategy Map Objective Measure Target Initiative • Grow • Annual • MarketingFinancial Revenue Revenue Gross +30% program Growth from new Sales products The BalancedCustomer New Products • Satisfy • Customer • CRM Scorecard Customer Profitability +20% Program Needs describes how Internal World-Class • Fast Time to • Time to from 9 • Cycle Time the strategy will Product Market Market down to Reengineering Development 6 months be executedLearning & • Acquire, • Staff • Skills Growth Highly Skilled Develop Competence 90% Development Workforce Skills Program ©Peopleplus 2010
  18. 18. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategySource: Kaplan & Norton ©Peopleplus 2010
  19. 19. Resource Barrier Strategic Resource AllocationBudgets not linked to strategy overcomes the Resource Barrier Financial Customer Internal Learning&Growth Budget linked to the strategy ©Peopleplus 2010
  20. 20. Resource Barrier Strategic Resource Allocation Budgets not linked to strategy overcomes the Resource Barrier Selecting and Managing Initiatives1 Other CRM SCM projects On-going & proposed SRM CSR strategic initiatives re- TQM examined JIT,QDP Marketing Projects2Screen, assess, and identify “Linked and Strategic” CRITERIA: initiatives Balanced Scorecard strategies should be linked to the3 overall strategicSelect strategic initiative that goals will grow the enterprise List of Priorities ©Peopleplus 2010
  21. 21. Cause and Effect Relationships and the Balanced Scorecard STRATEGY MAPS – a chain of cause-and-effect logic that connects the desired outcomes with the drivers Revenue WHAT? Financial Growth Loyal Customers WHAT? HOW? Customer Quality Product WHAT? HOW? Quality Quality HOW? WHAT? Internal Production Materials Learning Skilled Workforce + HOW? & Growth Technology ©Peopleplus 2010
  22. 22. Cause and Effect Relationships and the Balanced Scorecard A strategy is a set of hypothesis about CAUSE and EFFECT. Revenue EFFECT Financial Growth • A chain of cause and effect Loyal Customers CAUSE EFFECT relationships can be established Customer as a vertical dimension through Quality Product CAUSE EFFECT the four BSC perspectives. Quality Quality • The BSC tells the story of the Internal CAUSE EFFECT Production Materials strategy Learning Skilled Workforce + CAUSE & Growth Technology ©Peopleplus 2010
  23. 23. The ‘Balance’ in the Balanced Scorecard 1 – Balance between the tangible assets and intangible assets RevenueFinancial Growth Loyal CustomersCustomer Quality ProductInternal Quality Production Quality Materials tangible assetsLearning Skilled Workforce + Technology intangible assets& Growth In order to extract value from the intangible assets, these must be transformed. ©Peopleplus 2010
  24. 24. The ‘Balance’ in the Balanced Scorecard 2 – Balance between the financial measures and non- financial measures Objectives Measures Targets Initiatives RevenueFinancial Growth Financial Loyal CustomersCustomer Quality Product Quality Quality Non-FinancialInternal Production MaterialsLearning Skilled Workforce +& Growth Technology ©Peopleplus 2010
  25. 25. The ‘Balance’ in the Balanced Scorecard 3 – Balance between the internal and external constituents RevenueFinancial Growth Loyal Customers External – where we (effect)Customer want to go Quality Product Quality QualityInternal Production Materials Internal – what we (cause)Learning Skilled Workforce + have to do& Growth Technology ©Peopleplus 2010
  26. 26. The ‘Balance’ in the Balanced Scorecard 4 – Balance between lag and lead indicators of performance Objectives Measures Targets Initiatives RevenueFinancial Growth lag lead horizontal Loyal Customers dimension of theCustomer BSC Quality Product Quality QualityInternal Production MaterialsLearning Skilled Workforce +& Growth Technology vertical dimension of the BSC ©Peopleplus 2010
  27. 27. The VMO KRA PI SPAT RES ModelFUTURE Vision The Balanced Scorecard translates the Mission strategy into the four perspectives Strategy Objectives Financial Customer The „VERTICAL‟ Key Result Areas cause and effect Internal dimension of the Learning strategy Performance Indicators & GrowthPRESENT Strategies Action Program Activities Tasks Resources S W O SWOT Analysis T PAST ©Peopleplus 2010
  28. 28. The Balanced Scorecard Model and the VMO KRA PI SPAT RES Model Vision – Mission – O KRA PI SPATRES horizontal CAUSE AND EFFECT dimension Revenue Growth Financial FinanceVision - Innovative Products Customer MarketingMission World-Class Internal Product Dev‟t Internal Operations Stable High-Talent Learning Workforce HR &Growth vertical vertical CAUSE ALIGNMENT AND EFFECT dimension
  29. 29. Measures ©Peopleplus 2010
  30. 30. Thank You !!!Email: pravi202@gmail.com Mobile: +91 9705124824

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