Balanced score card technique


Published on

Published in: Business, Technology

Balanced score card technique

  1. 1. Balanced Score Card Technique
  2. 2. Balanced Score Card Technique • The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals
  3. 3. Balanced Score Card Technique • It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non- financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.
  4. 4. Balanced Score Card Technique • While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century.
  5. 5. Balanced Score Card Technique • The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
  6. 6. Balanced Score Card Technique • This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective.
  7. 7. Balanced Score Card Technique • The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
  8. 8. Balanced Score Card Technique
  9. 9. Balanced Score Card Technique • The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspective. 1. The Learning & Growth Perspective 2. The Business Process Perspective 3. The Customer Perspective 4. The Financial Perspective
  10. 10. Strategy Mapping • Strategy maps are communication tools used to tell a story of how value is created for the organization. They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain. Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).
  11. 11. Balanced Scorecard Software • The balanced scorecard is not a piece of software. Unfortunately, many people believe that implementing software amounts to implementing a balanced scorecard. Once a scorecard has been developed and implemented, however, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information.
  12. 12. Why Implement a Balanced Scorecard? • Increase focus on strategy and results • Improve organizational performance by measuring what matters • Align organization strategy with the work people do on a day-to-day basis • Focus on the drivers of future performance • Improve communication of the organization’s Vision and Strategy • Prioritize Projects / Initiatives
  13. 13. World Class manufacturing 1. Assessment 2. Vision 3. Control 4. Simplification 5. Automation 6. World class
  14. 14. TQM Models 1. Deming Award Criteria 2. Malcolm baldridge national quality award 3. European foundation for quality management award criteria 4. Australian business excellence award 5. Confederation Indian Industries (CII) award 6. TQMEX Model 7. Integrated model 8. Zaire Model
  15. 15. Deming Award Criteria • 1 Deming prize awarded to individuals • 2. Deming application prize awarded to companies • 3. Deming factory prize
  16. 16. Malcolm baldridge national quality award Criteria For Performance Excellence –Item Listing • 1999 Categories/Items Point Values • 1. Leadership 125 • 1.1 Organizational Leadership 85 • 1.2 Public Responsibility and Citizenship 40 • 2. Strategic Planning 85 • 2.1 Strategy Development 40 • 2.2 Strategy Deployment 45 • 3. Customer and Market Focus 85 • 3.1 Customer and Market Knowledge 40 • 3.2 Customer Satisfaction & Relationship 45 • 4. Information and Analysis 85 • 4.1 Measurement of Organizational Performance 40 • 4.2 Analysis of Organizational Performance 45
  17. 17. Malcolm baldridge national quality award • 5. Human Resource Focus 85 • 5.1 Work Systems 35 • 5.2 Employee Education, Training and Development 25 • 5.3 Employee well-being and Satisfaction Process management 85 • 6.1 Product and Service Processes 55 • 6.2 Support Processes 15 • 6.3 Supplier and Partnering Processes 15 • 7. Business Results 450 • 7.1 Customer Focused Results 115 • 7.2 Financial and Market Results 115 • 7.3 Human Resource Results 80 • 7.4 Supplier and Partner Results 25 • 7.5 Organizational Effectiveness Results 115 • TOTAL POINTS 1000
  18. 18. Malcolm baldridge national quality award