2. What, Why, When, Where, Who, How > scorecard
There is are 5thW & H for the scorecard concept
and when finish it I promise we will learn what is the
scorecard.
3. Phase 1:What is the balanced scorecard (BSC)?
• The Balanced Scorecard (BSC) is a strategic performance
management tool - a semi-standard structured report, supported by proven
design methods and automation tools that can be used by managers to keep
track of the execution of activities by the staff within their control and to
monitor the consequences arising from these actions.
Kaplan and Norton are seen the creators of the balanced scorecard concept &
they assert four steps as being part of the balanced scorecard design process:
• Translating the vision into operational goals;
• Communicating the vision and link it to individual performance;
• Business planning; index setting
• Feedback and learning, and adjusting the strategy accordingly
4. Balance scorecard measurements
Design of a Balanced Scorecard ultimately is about the
identification of a small number of financial and non-financial
measures and attaching targets to them, so that when they are
reviewed it is possible to determine whether current performance
'meets expectations'
Balance scorecard has four financial and non- financial
perspectives & measurements
• Learning and growth.
• Internal business process.
• Customers‟ views.
• Financial: how does share holder see us?
5. If we don’t measure ……
• How do you know where to improve?
• How do you know where to allocate or re-allocate money and
people?
• How do you know how you compare with others?
• How do you know whether you are improving or declining?
• How do you know whether or which programs, methods, or
employees are producing results that are cost effective and
efficient?
6. 1st The Learning & Growth
Toachieveourstrategy,howmustourorganizationlearnandimprove?
This perspective includes employee training and corporate
cultural attitudes related to both individual and corporate self-
improvement.
From the organization side, people are the main resource. So, it is
becoming necessary for knowledge workers to be in a continuous
learning mode. Metrics can be put into place to guide managers
in focusing training funds where they can help the most. In any
case, learning and growth constitute the essential foundation for
success of any organization.
Kaplan and Norton emphasize that 'learning' is more than
'training„ so we have t learn what should we train our employees.
7. 2nd The Business Process
To satisfy our customers,which process must we excel at?
This perspective refers to internal business processes. Metrics
based on this perspective allow the managers to know how well
their business is running, and whether its products and services
conform to customer requirements (the mission). These metrics
have to be carefully designed by those who know these processes
most intimately; with our unique missions these are not
something that can be developed by outside consultants.
8. 3rd The Customer
To achieve our vision, how must we look to our customers?
Recent management philosophy has shown an increasing
realization of the importance of customer focus and customer
satisfaction in any business. These are leading indicators: if
customers are not satisfied, they will eventually find other
suppliers that will meet their needs. Poor performance from this
perspective is thus a leading indicator of future decline, even
though the current financial picture may look good.
In developing metrics for satisfaction, customers should be
analyzed in terms of kinds of customers and the kinds of
processes for which we are providing a product or service to
those customer groups.
9. 4th The Financial
If we succeed, how will we look to our shareholder?
Kaplan and Norton do not disregard the traditional need for
financial data. Timely and accurate funding data will always be a
priority, and managers will do whatever necessary to provide it.
In fact, often there is more than enough handling and processing
of financial data. With the implementation of a corporate
database, it is hoped that more of the processing can be
centralized and automated. But the point is that the current
emphasis on financials leads to the "unbalanced" situation with
regard to other perspectives. There is perhaps a need to include
additional financial-related data, such as risk assessment and
cost-benefit data, in this category.
11. Phase 2:Why we should use the balanced scorecard
(BSC)?
Why does business need balance scorecard?
• Improve organizations performance by measuring what is
matters.
• Increase the focus on the strategy and goals.
• Set priorities regarding the projects.
• Get more communications between the vision and the strategy.
• Focus on the drivers.
It also alert mangers to areas that performance is needed to be
improved & encourage focusing their attention to these areas.
12. “Having a trouble in your strategy? Then map it.”
by Kaplan & Norton.
Studies have shown that organizations which are leading in their
industry, stellar financial performers, and adept change
leaders, distinguish themselves by the following characteristics:
• Linking strategic objectives and measure to operational
objectives and measures.
• Having agreed-upon measure that managers understand.
• Balancing financial (logging) and non-financial (real time or
leading) measures.
• Updating their strategic scorecard regulatory and clearly
communicate measures.
• Progress & challenge to all employees in the organization.
13. Phase 3:When we use the balanced scorecard
(BSC)?
• If we want to translate the missions and strategy into a clear
objectives.
• If we need a full manage & control the organization.
• To clarify what if the current performance meets what the
organization planed for.
14. Phase 4:Where the balanced scorecard (BSC)
is used?
More than half of major companies in the US, Europe and Asia
are using Balanced Scorecard approaches. The official figures
vary slightly but the Gartner Group suggests that over 50% of
large US firms have adopted the BSC. A recent global study by
Bain & Co finds that the Balanced Scorecard is one of the top-ten
most widely used management tools around the world. The
widest use of the BSC approach has traditionally been in the
US, the UK and Northern Europe, but there is very strong growth
in Balanced Scorecard adoption in South America, the Middle
East and Asia.
15. Phase 5:Who should use the balanced
scorecard (BSC)?
• All firms require improving its performance and specify its
frame work that is translate the visions & strategies into a
coherent set for performance measures.
• All firms want to achieve Better Strategic Planning, Improved
Strategy Communication & Execution, Better Management
Information, Improved Performance Reporting, Better Strategic
Alignment, and Better Organizational Alignment.
16. Phase 6:How many benefits of using
the balanced scorecard (BSC)?
Managing employee or system performance facilitates the
effective delivery of strategic and operational goals. There is a
clear and immediate correlation between using performance
management programs or software and improved business and
organizational results.
For employee performance management, using integrated
software, rather than a spreadsheet based recording system, may
deliver a significant return on investment through a range of
direct and indirect sales benefits, operational efficiency benefits
and by unlocking the latent potential in every employees work
day (i.e. the time they spend not actually doing their job).
17. Benefits may include:
First: Direct financial.
• Gain grow sales.
• Reduce costs in the organization.
• Stop project overruns.
• Aligns the organization directly behind the CEO's goals.
• Decreases the time it takes to create strategic or operational
changes by communicating the changes through a new set
of goals.
18. Second: Motivated workforce.
• Optimizes incentive plans to specific goals for over
achievement, not just business as usual.
• Improves employee engagement because everyone
understands how they are directly contributing to the
organizations high level goals.
• Create transparency in achievement of goals.
• High confidence in bonus payment process.
• Professional development programs are better aligned
directly to achieving business level goals.
19. Third: Improved management control.
• Flexible, responsive to management needs.
• Displays data relationships.
• Helps audit / comply with legislative requirement.
• Simplifies communication of strategic goals scenario
planning.
• Provides well documented and communicated
process documentation.
20. References, external links & Sources
• The balance scorecard for Kaplan and David P. Norton.
• Balanced Scorecard by Yodhia Antariksa.
• Scorecard Training Module by Frank G. Adler, Ph.D.
• 2GC Balanced Scorecard Usage Survey, "FAQ Answer: What is the Balanced Scorecard?“
• "The Balanced Scorecard - Measures that Drive Performance", Harvard Business Review, Feb. 1992.
• Kaplan R S and Norton D P (1992) "The Balanced Scorecard: measures that drive performance", Harvard Business Review Jan – Feb pp. 71–80.
• Kaplan R S and Norton D P (1993) "Putting the Balanced Scorecard to Work", Harvard Business Review Sep – Oct pp2–16.
• Kaplan R S and Klein N (1995) "Chemical Bank: Implementing the Balanced Scorecard" Harvard Business School Press
• Kaplan R S and Norton D P (1996) "Using the Balanced Scorecard as a strategic management system", Harvard Business Review Jan – Feb
pp. 75–85.
• Performance managements, balances scorecard and performance measurements and Building & Implementing a Balanced Scorecard
• Kaplan R S and Norton D P (1996) "Balanced Scorecard: Translating Strategy into Action" Harvard Business School Press
• Kaplan, R. S., & Norton, D. P. (2004). Measuring the strategic readiness of intangible assets. Harvard Business Review, 82(2): 52-63.
• Kaplan, R. S., & Norton, D. P. (2004). Strategy maps: Converting intangible assets into tangible outcomes. Boston: Harvard Business School Press.
• A Handbook for Measuring Employee Performance, by the US Office of Personnel Management.
21. A study case
• N.B. For media rights and obligations the company name changed to X Bank.
Bank profile:
• X bank is a British multinational banking and financial services company
headquartered in London, United Kingdom. It has operations in over 50 countries
and territories across Africa, Asia, Europe, North America and South America and
around 50 million customers
• Business Banking, the Corporate and Investment Banking and Wealth and
Investment are industries X bank provide.
Vision
• To be the preferred provider of financial services and products, servicing their
stakeholders, being their: Customers, Employees, Shareholders, Government and
Society.
Purpose
• To enable their customers to achieve their ambitions and by doing so deliver
superior benefits to all stakeholders.
22. Mission
To ensure :
• Put the customers at the center of everything they do.
• Differentiate through superior service and competitive products.
• Continuously innovate.
• Are brilliant at execution.
• Have the best people and engage them in their business.
Values
• Value their people and threat them with fairness.
• Demonstrate integrity in all their actions.
• Strive to exceed the needs of their customers.
• Take responsibility for the quality of their work
• Display leadership in all they do
23. X bank BSC.
• Have a history of building success through innovation and this
approach is still going strong today. Inventing superior products and
services takes fresh thinking, creative energy and team work. This
makes all of our businesses vibrant and engaging places to work.
• Regardless of where they are located or which business area their
people are working in, there are key attributes that they look for in any
individual we recruit. These derive from their five guiding principles:
1. Winning together – A willingness to do what’s right for Barclays, our
teams and our colleagues in order to achieve collective and
individual success.
2. Best people – The ability to develop individually and to help those
around you.
3. Customer and client focus – The ability to understand and deliver
what our customers and clients want and need.
4. Pioneering – The capacity to innovate and drive idea generation to
improve our operational excellence.
5. Trusted – Acting with the highest level of integrity and being able to
take responsibility for decisions and actions.
24. • We can see that they translate their vision and strategies
into implementations and working through the BSC four
perspectives.
• Learning and growth.
(best people & winning together).
• Internal process.
(Pioneering).
• Customer.
(Customer and client focus).
• Financial.
(Trusted & winning together).
25. To achieve their vision they start setting a strategyfor learning and growth
perspective.
A) Built the winning team:
• Choosing well the joining staff and sort their capabilities to match
every role profile qualifications needed.
• Coaching and training through internal courses or external
professional centers to create a winning team who able to give value
and make difference.
• Updating salaries and promotions criteria and match it with the market
and to make into consideration the allowance through medical
insurance budgets, social insurance, bonus, profit
share, transportations, benefits package..etc.
• Checking the outsourcing employees percentage from the total staff.
• An annual serious PD and to be checked quarterly.
• Surveys asking them regarding their satisfaction from their salaries
and training had.
26. B)Creativity and performance quality.
• Enable employees suggestion and share with them the vision &
strategy.
• Setting a productivity tools and measurements.
• Capacity plans and KPI (key performance indicator).
• Sharing ideas and making a hearing sessions between the front office
employees and the back office staff to reach their both target
smoothly.
• A monthly and quarterly rewards for highly performance and creative
thinking.
• Making a rotation between the job role profiles.
C) results:
• Reduce internal process TAT (turnaround time).
• Cost reduction and find ways to increase the income.
• High performance & quality.
• Employees satisfactions.
• Achieving most of organization objectives.
• Decreasing the turnover.
28. According to this model of using the learning and growth
perspective as a performance measurement, we can say
that it makes a lot of measurements homework as it draw
the attention to the staff who have the capabilities to make
the things done.
Going through training / coaching and developing their
skills to share their ideas beside reaching their satisfactions
as the same attention as the organization’s objectives,
make achieving its vision much easier.
Editor's Notes
Beginning course details and/or books/materials needed for a class/project.
A schedule design for optional periods of time/objectives.
