The Balanced Scorecard was introduced in 1992 as a performance measurement framework that monitors an organization's performance toward strategic goals. It gives managers a comprehensive view across financial, customer, internal process, and learning & growth perspectives. The document then provides examples of how Philips, Unified CallSoft, and Zenith Systems implemented Balanced Scorecards to address various issues and improve performance alignment, transparency, and strategic focus.

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