1. Balanced Score Card

2. Where it started……..
 Introduced in 1992 by Drs. Robert Kaplan (Harvard Business
School) and David Norton as a performance measurement
framework
 The Balanced Scorecard is the most commonly used framework
for ensuring that companies execute their strategies

3. What is Balance Scorecard?
 A Balanced Scorecard monitors the performance of all or part of
an organization, towards strategic goals
 It is used in business, industry, government, and nonprofit
organizations worldwide to align business activities
 It gives a framework and helps planners identify what should be
done and measured

4. Why Implement a Balanced
Scorecard ?
 Increase focus on strategy and results
 Align organization strategy with the work people on day-to-day basis
 Improve communication of the organization’s Vision and Strategy
 To provide a more reliable basis for awarding incentive based pay

5. Why Implement a balanced
Scorecard ?
 To give managers a comprehensive view of the performance of an
employee and business
 Employee Satisfaction
 To survive and prosper in today’s world
 It provides feedback to both the internal business processes and
external outcomes in order to continuously improve strategic
performance and results

6. Four Strategic Perspectives

7. Financial
 Examines company’s implementation and execution
of its strategy
 Three possible stages as described by Kaplan and Norton
 Rapid Growth
 Sustain
 Harvest

8. Customer
 Customer Satisfaction
 Retention
 Marketing
 Product/Service in the eyes of the customer

9. Internal Business Process
 Metrics based on this perspective allow the managers to know how
well their business is running
 Innovation - Measures how well the company identifies the customer’s
future needs
 Operations – Measures quality ,costs, technology & plant
infrastructure

10. Learning and Growth
 Training
 Forward Focused
 Concerned with -Human capital
-Information capital
-Organizational capital

11. Process
Formulate business strategy
Outline the company’s value
Define business strategy
chain activities
Identify the strategically required
Outline a strategy map
organizational outcomes
Identify workforce requirements
Identify the required work force behaviors

12. Balanced Score Card

13. Philips
 Philips is world leader in healthcare, lifestyle and lighting
 Philips integrates technologies and design into
people life
 Mission :Improve the quality of people’s lives through timely
introduction of meaningful innovations

14. Issues
 During the mid-90s, Netherlands based Royal Philips reported losses
 Due to rapid changes in the external environment and growing
competition of Asian companies like LG and Samsung
 Led to the Company initiating
 High manufacturing costs
 Initiating job cuts
 Selling unprofitable businesses

15. Why Balance Scorecard ?
 The initiative to implement the Balanced Scorecard came from the top
management at its HQ in the Netherlands
 Need to shift focus from high-volume business to high-value business
 They realized they had to make operations
 Flexible
 Innovative

16. Implementation
 This led the Company to introduce a program called Business
Excellence through Speed and Teamwork (BEST) in July 1999
 The Balanced Scorecard was one of the tools of the BEST
 There were four perspectives in Philips' Balanced Scorecard:
 Competence
 Processes
 Customers
 Finance

17. Implementation
 They used Balanced Scorecard strategy across Philips’ divisions with
more than 1,20,000 employees spread across 150 countries
 They established the Critical Success Factor’s (CSFs)
 Philips used the traffic light system to measure the level of
achievement of the key indicators:
 Green light – Target that had been met
 Amber – Performance in line with the target
 Red – A problem area

18. Measuring Results
 The Balanced Scorecard was used as an instrument to
 Evaluate actual performance against targets
 Monitor future plans
 It enabled employees understand the existing policies and plans for the
future
 Achieving revenue growth, employee satisfaction, customer satisfaction
were the common indicators in all business units

19. Balanced Score Card

20. Unified CallSoft
 It is based in Canada, has been providing Call center and related BPO
services since the past one and a half decade
 It has operations in over seventeen countries includes United States,
Eastern Europe, India and Japan

21. Issues
 Lately it has been confronting difficulties in tracking and monitoring
the performance of the employee
 Managers were unable to decide the reason for significant dips in
progress of employees and in revenues volume
 Need to optimize the service delivery processes

22. Why Balance Scorecard ?
 Amongst the several options for resolving the issue the top
management used Balanced Scorecard approach as it was most
feasible
 Implement a rigorous mechanism of checks across several delivery
centers
 Improving the overall productivity and employee performance

23. Implementation
 A team was created that had members from all the major divisions to
pool in their ‘plausible’ causes for the decline being experienced
 A criteria was developed for filtering the collected measures and used
to arrive at the ‘most relevant group’ of KPIs (Key performance
Indicators)
 The software chosen was such that it permitted arranging the
scorecards in the form of ‘cascade’

25. Measuring Results
 Huge cost savings
 Total amount came down by 10%
 Employee contribution rose by a 40%
 Motivation levels too increased by 60%
 Coordination between different delivery centers was achieved
 There was transparency of the system , thus making it easy to spot the
‘weakest link’

26. Measuring Results
 Cleary defined performance metrics supported by an reward system
helps in motivating the work force in a call center
 The managers no longer required to fight with numbers and values
 By using the values presented on scorecards, they could take quick
decision

27. Balanced Score Card

28. Zenith Systems
 Zenith is a leading independent IT infrastructure services
provider
 It provides services throughout the UK, Europe and
internationally to more than 80 countries

29. Issues
 Lack of board clarity
 Lack of progress
 Some occasional disharmony
 Need to focus on strategic performance

30. Implementation
 2GC was appointed to assist the Board to create a Corporate Balanced
Scorecard
 2GC helps in addressing the strategic and performance management
issues
 They worked for 8 months with Executive Board and Quality manager
 The firm had good financial reporting systems in place

31. Implementation
 2GC worked with two main divisions – Client Services and
Business Development
 An analysis of how the three Balanced Scorecards interacted
with each other was shown

32. Measuring Results
 The board agreed on a clear set of strategies
 The two divisions established a clear statement
 The managers for the first time developed long-term view of the
objective ,the organization was trying to achieve
 Reporting on relevant information back to the centre

33. Conclusion
 Balanced scorecard is a powerful strategic tool
 It represents a fundamental change in how an organization is
measured and held accountable for results
 It also poses threats to an established corporate culture and has
potential weaknesses if it isn't executed properly