The document discusses best practices in transformational leadership and balanced scorecard (BSC) methodology, emphasizing the importance of leadership qualities, strategic planning, and performance management. It outlines the benefits of transformational leadership in motivating followers and details the four perspectives of BSC—learning and growth, business processes, customer, and financial—that guide organizational performance measurement. Additionally, it provides guidelines for implementing BSC effectively and evaluating performance management systems within organizations.

1. BEST PRACTICE: TRANSFORMATIONAL LEADERSHIP;
BALANCED SCORECARD AND PERFORMANCE
MANAGEMENT
SUMMIT MANAGEMENT CONSULTANTS
RANDBURG TOWERS
25 FEBRUARY 2015
CHARLES COTTER

2. • #1: Leadership
• #2: Balanced Scorecard
• #3: Performance Management Framework

3. THE NATURE AND DEFINITION OF
LEADERSHIP
• Defining leadership
• The leadership process
• Transformation leadership – principles and
characteristics

4. LEADERSHIP COMPONENTS

5. LEADERSHIP PROCESS
• Creating a Vision
• Articulating that vision in a Compelling and Inspirational
manner
• Guiding and Supporting followers in the pursuit of
achievement of the vision
• Being a Driver and Agent of Change
• Nurturing, Developing and Empowering followers
• Serving as a Role Model

7. CHARACTERISTICS OF
TRANSFORMATIONAL LEADERSHIP

8. BENEFITS OF TRANSFORMATIONAL
LEADERSHIP
• Transformational leadership enhances the motivation,
morale and performance of followers through a variety of
mechanisms:
Connecting the follower's sense of identity and self to the
project and the collective identity of the organization
Being a role model for followers that inspires them and makes
them interested
Challenging followers to take greater ownership for their work
Understanding the strengths and weaknesses of followers, so
the leader can align followers with tasks that enhance their
performance

9. SYNDICATE GROUP LEARNING
ACTIVITY
• Refer to page 9 of the Learner Manual
• By referring to the characteristics of a
Transformational Leader, describe how you’ll
apply these to optimize performance from
your followers in the field of Higher
Education
• Provide feedback in the form of a summation
of your group discussion

10. BALANCED SCORECARD
• Defining a Balance Scorecard (BSC)
• BSC Perspectives/dimensions
• The value, purpose and benefits of Balanced
Scorecards
• The key benefits of using Balanced Scorecards
• The Steps in Strategic Planning and Management
• Strategy Mapping

11. BSC MEASURES

12. • The balanced scorecard suggests that we view
the organization from four (4) perspectives, and
to develop metrics, collect data and analyze it
relative to each of these perspectives:
Learning, Innovation and Growth
Business (Internal) Processes
Customer
Financial
BSC PERSPECTIVES/DIMENSIONS

13. ILLUSTRATION: BSC
PERSPECTIVES/DIMENSIONS

14. • Strategic question:
 “To achieve our vision, how will sustain our ability to change and improve?”
• Examples (measurable indicators):
 Time to develop new generation of products
 Life cycle to product maturity
 Time to market versus competition
 Is there the correct level of expertise for the job?
 Employee turnover
 Job satisfaction
 Training/Learning opportunities
• Value Outcome:
 Organizational knowledge and growth capacity
LEARNING, INNOVATION AND
GROWTH PERSPECTIVE

15. • Strategic question:
 “To satisfy our shareholders and customers, what business processes must we excel at?”
• Examples (measurable indicators):
 Cycle time
 Unit cost
 Yield
 New product introductions
 Number of activities per function
 Duplicate activities across functions
 Process alignment (is the right process in the right department?)
 Process bottlenecks
 Process automation
• Value Outcome:
 Efficiency
BUSINESS (INTERNAL) PROCESS
PERSPECTIVE

17. • Strategic question:
 “To achieve our vision, how should we appear to our customers?”
• Examples (measurable indicators):
 Percent of sales from new products
 On time delivery
 Share of important customers’ purchases
 Ranking by important customers
 Delivery performance to customer
 Quality performance for customer
 Customer satisfaction rate
 Customer percentage of market
 Customer retention rate
• Value Outcome:
 Customer satisfaction
CUSTOMER PERSPECTIVE

18. • Strategic question:
 “To succeed financially, how should we appear to our shareholders?”
• Examples (measurable indicators):
 Cash flow
 Sales growth
 Operating income
 Return on Equity (RoE)
 Return On Investment (ROI)
 Return on Capital Employed (RoCE)
 Financial Results (Quarterly/Yearly)
• Value Outcome:
 Financial performance/profitability
FINANCIAL PERSPECTIVE

19. • Articulate the business's vision and strategy
• Identify the performance categories that best link the business's vision and
strategy to its results (e.g., financial performance, operations, innovation,
employee performance)
• Establish objectives that support the business's vision and strategy
• Develop effective measures and meaningful standards, establishing both short-
term milestones and long-term targets
• Ensure company-wide acceptance (ownership) of the measures
• Create appropriate budgeting, tracking, communication, and reward systems
• Collect and analyze performance data and compare actual results with desired
performance
• Take action to close unfavourable gaps
PURPOSES OF THE BSC

20. • Clarify or update a business's strategy
• Link strategic objectives to long-term targets and annual budgets
• Track the key elements of the business strategy
• Incorporate strategic objectives into resource allocation processes
• Facilitate organizational change
• Compare performance of geographically diverse business units
• Increase company-wide understanding of the corporate vision and
strategy
STRATEGIC UTILITY AND FUNCTIONAL VALUE
OF BSC’S

22. 4-STEP STRATEGIC MANAGEMENT
PROCESS

23. ILLUSTRATION: STRATEGY MAP

24. • Refer to page 20 in Learner Guide
• By means of a cost-benefit analysis, develop a
business case for BSC.
Viability
Feasibility
Sustainability
• Present a summary of group discussion
SYNDICATE GROUP LEARNING
ACTIVITY

25. • #1: BSC is aligned with organization’s strategic business plans
• #2: BSC is future-focused, adopting a strategic, medium to long-term approach
• #3: BSC is pro-active, sensitive and responsive to (internal and external)
environmental change and trends
• #4: BSC enjoys company-wide acceptance (ownership) of the measures and
processes
• #5: BSC is organized, well-coordinated and systematic approach
• #6: BSC is a collaborative and partnering effort (managers have co-opted business
partners to the process)
• #7: BSC is integrated (with other business management and administrative) and
cohesive process
BEST PRACTICE GUIDELINES FOR BSC

26. • #8: BSC generates meaningful business intelligence which informs business planning
and supports strategic decision-making
• #9: BSC integrates both scientific (metrics and analytics) and artistic (planning)
principles
• #10: BSC utilizes cutting-edge and innovative technology and software
• #11: BSC is continuously monitored, reviewed, evaluated and adapted
• #12: BSC yields a positive business ROI, with tangible/demonstrable outcomes and
impact – creates sustainable competitive advantages and organizational change
• #13: BSC incorporates strategic objectives into resource allocation processes e.g.
financing/budgeting
• #14: BSC is a logical and rational process making use of cause-effect logic
BEST PRACTICE GUIDELINES FOR BSC

27. • Refer to page 22 in Learner Guide
• Critically evaluate your organization’s current
Balanced Scorecard processes and systems
against the best practice criteria.
• Identify gaps and recommend improvement
strategies.
• Present a summary of group discussion
SYNDICATE GROUP LEARNING
ACTIVITY

28. ILLUSTRATION: HIERARCHY OF BALANCED
SCORECARD COMPONENTS

30. THE 9-STEP BSC BUILDING AND
IMPLEMENTING PROCESS

31. PERFORMANCE MANAGEMENT (PM)
• Defining the fundamental concepts
• The need for PM
• Best Practice Criteria: Performance
Management
• The Performance Management process

32. • Refer to pages 28-29 in Learner Guide
• Critically evaluate your organization’s current
Performance Management processes and
systems against the best practice criteria.
• Identify gaps and recommend improvement
strategies.
LEARNING ACTIVITY

34. PERFORMANCE MANAGEMENT CYCLE

35. PERFORMANCE PLANNING
• Clarifying expectations
• Setting of goal/objectives, performance
standards and criteria
• Action Planning
• Contracting Performance Agreements

36. PERFORMANCE REVIEW/APPRAISAL
• Monitoring, Measuring/Evaluating performance
against the pre-determined performance
goals/objectives and standards and criteria.

37. PERFORMANCE FEEDBACK/INTERVIEW
• Conducting of the 8 step, Human Touch
interview/discussion – formally/informally and
implementing Positive and Corrective performance
feedback.

38. 8-STEP HUMAN TOUCH
PERFORMANCE INTERVIEW
• Step 1: Control the environment
• Step 2: State the purpose of the discussion
• Step 3: Ask for the employee’s opinion
• Step 4: Present your assessment
• Step 5: Build on employee’s strengths
• Step 6: Ask for employee’s reaction to your assessment
• Step 7: Set specific goals
• Step 8: Close the discussion

39. PERFORMANCE DEVELOPMENT
• Implementing training and development and other
people performance improvement initiatives and
the adoption of the 5 pivotal roles of people
development-focused managers (people
capitalism).

40. PERFORMANCE MATRIX

41. PERFORMANCE REWARD
• Offering of host of customized and personalized
intrinsic and extrinsic performance reward options
and recognition. Ensure compliance with best
practice principles

43. • Refer to page 38 in Learner Guide
• Outline the performance management
process in your organization by discussing the
key managerial actions in the 5 stages.
• Identify gaps and recommend improvement
strategies.
LEARNING ACTIVITY

44. • Summary of the key learning points
• Questions
• Conclusion
• Good luck with the application of the best
practice principles.
CONCLUSION

45. • CHARLES COTTER
• 084 562 9446
• charlescot@polka.co.za
• LINKED IN
• TWITTER: Charles_Cotter
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