Slide Deck for The Balanced Scorecard - Implementing Strategy Webinar conducted by BMGI India Consultants in Feb 2010.
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The Performance Management and Balanced Scorecard overview presentation is a comprehensive walkthrough of what Performance Management and Balanced Scorecard is and how you implement it at your company or your customer company. The nice looking slides are easy to incorporate into your own presentation and are designed by professionals to both give you an inside into the subject and give a professional presentation to your stakeholders. The PowerPoint slides are:
Slide 1: What is The Balanced Scorecard
Slide 2: The barriers to implementing Strategy
Slide 3: The Balanced Scorecard 4 perspectives
Slide 4: Rationale for the Balanced Scorecard
Slide 5: Signs that you may need a new performance measurement system
Slide 6: Balanced Scorecard Team Roles and Responsibilities
Slide 7: Balanced Scorecard Project Plan and Timeline
Slide 8: A simplified Communication Plan for your Balanced Scorecard project
Slide 9: Translating with the Balanced Scorecard
Slide 10: The Balanced Scorecard should contain a mix of lag and lead measures of performance
Slide 11: Cause-and-effect linkages in the Balanced Scorecard
Slide 12: Mapping Initiatives to Objectives
Slide 13: “Cascading” the Balanced Scorecard
Slide 14: The Cascading Process
Slide 15: Linking the Balanced Scorecard to Budgeting
Slide 16: Public-Sector Balanced Scorecard
Slide 17: Commonly used Financial Measures
Slide 18: A sample of customer Measures
Slide 19: Internal Process Measures
Slide 20: Employee Learning and Growth Measures
Balanced Scorecard, A Comprehensive Guide Upendra K
The Balanced scorecard is a management system that enables organizations to clarify their vision and strategy and translate them into action.
Provides an organization with feedback of both the internal business processes and external outcomes, which allows for continuous improvement of strategic performance and results.
Nerve center of an enterprise
The term “scorecard” signifies quantified performance measures and “balanced” signifies the system is balanced between:
Short-term and long term objectives
Financial and non-financial measures
Lagging and leading indicators
Internal and external performance perspectives
The concept of the balanced scorecard was first touted in the Harvard Business Review in 1992 in a paper written by Robert S Kaplan and David P Norton.
The paper introduced the idea of focusing on human issues as well as financial ones, and measuring performance across a much wider spectrum than businesses had done before.
Kaplan and Norton published their ideas in full in The Balanced Scorecard: Translating Strategy into Action in 1996 and it became a business bestseller.
The balanced scorecard is centered on four performance metrics or perspectives:
Customers
Internal processes
Financial
Learning and growth
When implemented properly, each one of these perspectives contains four subparts consisting of
Objectives
Measures
Targets
Initiatives
Organizations that use a Balanced Scorecard approach tend to outperform organizations without a formal approach to strategic performance measurement
- World-class companies are 159% more likely to have mature BSC in place than less successful organizations
- Among 164 publicly traded companies, those with well-deployed BSC outperformed the control group by nearly 30% (Advances in Accounting, 2008)
- Organizations using BSC outperform the other companies by about 100 percent in having everyone in the organization understand what the organization's strategy is (Norton, The Strategy-Focused Organization, 2000)
How to convince the stakeholders to use the Balanced Scorecard concept | BSCD...Aleksey Savkin
The Balanced Scorecard is a business tool recognized world-wide by companies' executives. The secret of the successful BSC project is that all key employees, business owners, and top managers are involved. Research show that the biggest challenge during the implementation of the BSC is a motivational problem. Before starting a Balanced Scorecard project it is necessary to explain this business approach to all stakeholders so that they would buy into the design of the Balanced Scorecard and in the future became active users of this business tool. More: http://www.bscdesigner.com/
-- Buy slides at www.tools4management.com --
The Performance Management and Balanced Scorecard overview presentation is a comprehensive walkthrough of what Performance Management and Balanced Scorecard is and how you implement it at your company or your customer company. The nice looking slides are easy to incorporate into your own presentation and are designed by professionals to both give you an inside into the subject and give a professional presentation to your stakeholders. The PowerPoint slides are:
Slide 1: What is The Balanced Scorecard
Slide 2: The barriers to implementing Strategy
Slide 3: The Balanced Scorecard 4 perspectives
Slide 4: Rationale for the Balanced Scorecard
Slide 5: Signs that you may need a new performance measurement system
Slide 6: Balanced Scorecard Team Roles and Responsibilities
Slide 7: Balanced Scorecard Project Plan and Timeline
Slide 8: A simplified Communication Plan for your Balanced Scorecard project
Slide 9: Translating with the Balanced Scorecard
Slide 10: The Balanced Scorecard should contain a mix of lag and lead measures of performance
Slide 11: Cause-and-effect linkages in the Balanced Scorecard
Slide 12: Mapping Initiatives to Objectives
Slide 13: “Cascading” the Balanced Scorecard
Slide 14: The Cascading Process
Slide 15: Linking the Balanced Scorecard to Budgeting
Slide 16: Public-Sector Balanced Scorecard
Slide 17: Commonly used Financial Measures
Slide 18: A sample of customer Measures
Slide 19: Internal Process Measures
Slide 20: Employee Learning and Growth Measures
Balanced Scorecard, A Comprehensive Guide Upendra K
The Balanced scorecard is a management system that enables organizations to clarify their vision and strategy and translate them into action.
Provides an organization with feedback of both the internal business processes and external outcomes, which allows for continuous improvement of strategic performance and results.
Nerve center of an enterprise
The term “scorecard” signifies quantified performance measures and “balanced” signifies the system is balanced between:
Short-term and long term objectives
Financial and non-financial measures
Lagging and leading indicators
Internal and external performance perspectives
The concept of the balanced scorecard was first touted in the Harvard Business Review in 1992 in a paper written by Robert S Kaplan and David P Norton.
The paper introduced the idea of focusing on human issues as well as financial ones, and measuring performance across a much wider spectrum than businesses had done before.
Kaplan and Norton published their ideas in full in The Balanced Scorecard: Translating Strategy into Action in 1996 and it became a business bestseller.
The balanced scorecard is centered on four performance metrics or perspectives:
Customers
Internal processes
Financial
Learning and growth
When implemented properly, each one of these perspectives contains four subparts consisting of
Objectives
Measures
Targets
Initiatives
Organizations that use a Balanced Scorecard approach tend to outperform organizations without a formal approach to strategic performance measurement
- World-class companies are 159% more likely to have mature BSC in place than less successful organizations
- Among 164 publicly traded companies, those with well-deployed BSC outperformed the control group by nearly 30% (Advances in Accounting, 2008)
- Organizations using BSC outperform the other companies by about 100 percent in having everyone in the organization understand what the organization's strategy is (Norton, The Strategy-Focused Organization, 2000)
How to convince the stakeholders to use the Balanced Scorecard concept | BSCD...Aleksey Savkin
The Balanced Scorecard is a business tool recognized world-wide by companies' executives. The secret of the successful BSC project is that all key employees, business owners, and top managers are involved. Research show that the biggest challenge during the implementation of the BSC is a motivational problem. Before starting a Balanced Scorecard project it is necessary to explain this business approach to all stakeholders so that they would buy into the design of the Balanced Scorecard and in the future became active users of this business tool. More: http://www.bscdesigner.com/
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. In this presentation, you will learn the principles of Balanced Scorecard and you will explore the core processes of this system.
BSC one of the most amazing strategy tools I ever worked with. I am sure this topic been discussed many times but I try to explain it from my point of view
Balanced Scorecard implementation in SMEs: From theory to practiceemilvadana
In theory, Balanced Scorecard implementation is a clear and not so complicated process. While the implementation and usage of a performance management system in large companies has been thoroughly analyzed, the characteristics of the SMEs raise question on how should a Balanced Scorecard be customised and implemented in order to generate the benefits a SME needs.
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. In this presentation, you will learn the principles of Balanced Scorecard and you will explore the core processes of this system.
BSC one of the most amazing strategy tools I ever worked with. I am sure this topic been discussed many times but I try to explain it from my point of view
Balanced Scorecard implementation in SMEs: From theory to practiceemilvadana
In theory, Balanced Scorecard implementation is a clear and not so complicated process. While the implementation and usage of a performance management system in large companies has been thoroughly analyzed, the characteristics of the SMEs raise question on how should a Balanced Scorecard be customised and implemented in order to generate the benefits a SME needs.
IBM Cognos - Hälsokontroll på ekonomiavdelningen med mål att bli värdeskapareIBM Sverige
Som en en spinoff från IBM's CFO survey 2010, ger vi dig möjligheten att staka ut vägen hur du skall bli bättre än dina konkurrenter. Denna presentation hölls på IBM Cognos Performance 2010 av Jonas Berg, Sr Managing Consultant, Business Analytics & Optimization, IBM
Description of how the balanced scorecard can be used for small businesses on the run, using one page business plan, by Warren Rutherford, Owner, The Executive Suite.
Managing an advisory firm's compliance program can be costly. Can this expense also be viewed as an investment? Learn how your compliance efforts can help you manage your firm more effectively.
This paper was presented at the national IIA Conference (SOPAC) in Brisbane in March 2013 - it talks to the issue of Internal Audit's role in Auditing business strategy.
Overview of Strategy Execution Management - Vision without Execution - The Ha...Tom Willingham
Welcome to an Overview of Strategy Execution Management and the KeyneLink Process. We’ve spent over a decade working with our Partners at KeyneInsight to understand what it takes to build an organization that consistently executes its Strategy year-after-year.
Unfortunately, the odds are stacked against most organizations. We’ve found that:
1. Every organization has an “execution management system” but doesn’t know what it is.
2. People who’ve never had to be accountable for results are scared of the thought.
3. Many individuals value the status quo of being left alone and not challenged.
4. Most businesses would disagree when challenged about their Execution...it’s like challenging whether or not they have “Integrity”.
There are two types of activities found in organizations:
1. Activities that move an organization forward
2. Day-to-Day activities of running the business
Without a system in place, the Day-to-Day activities take priority and consume employee’s time.
Your organization may or may not be ready to improve its Execution and establish Strategy Execution Management as a core competency, but this topic needs to be on your radar. So enjoy the education being shared with you today.
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𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
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2. Agenda
• Driving growth: need for strategy and effective
deployment
• Understanding the Balanced Scorecard (BSC) and
its benefits
– The four perspectives of the BSC
• Building the BSC: Steps of the BSC process
• Cascading the BSC in the organization
3. Webinar – Ground Rules
• Please disable pop up blockers.
• Please keep your self on mute.
Asking Questions
• Use the “Raise Hand” icon or “Question / Chat” box in
the lower right corner.
• Submit questions as they occur to you by typing in the
box, then click submit
• Questions will be answered during Q&A session at the
end of the presentation.
4. Webinar – Ground Rules
Questions & Answers
• We will do our best to answer as many questions as
possible in the allotted time.
• Answer to unanswered questions will be answered on
our website/forum soon.
• We shall notify you when they are available
http://www.bmgi.groupsite.com
http://www.bmgindia.com
8. Strategy fails if it is little more than…..
Hope Extrapolation
Fabrication
Vision? Rationalization
Paper Exercise Self-Defense
9. Strategic Vs Operational Management
STRATEGIC MANAGEMENT OPERATIONAL MANAGEMENT
• Long term future horizons • Short to medium term
• Building sustainable • Seeking operational
competitive advantage improvements
• External focus • Internal focus
• Thinking Strategically • Fire fighting
10. The Ambidextrous Nature of Business
Managing Create the
Current Business Future Business
Selectively
Abandon the Past
Focus: Doing things Focus: Doing things
Better Different
10
12. Preservation and Evolution
Phase 3
Maturity
Phase 2
Growth
Phase 4
Improving Reinventing
the Future
Growth
Phase1
Innovation
Time
12
13. Channels for Growth
Growth is #1 agenda for almost every CEO
Primary Vehicle for Growth is through Organic Growth or
Mergers & Acquisitions (M&A)
Several Studies have shown that most M&A fail (One
study showed that over 62% of the time M&A destroy
shareholders wealth)
However delivering Organic Growth consistently and
repeatedly has been challenging due to poor success
rates with implementation of strategy
13
14. Forbes List of 100 Largest Companies
• To celebrate the 70th anniversary, in 1987 Forbes
published its “Forbes 100” list of largest American
companies and then compared it to its original list from
1917.
• However, only 18 of the original companies managed
to stay in “Top 100” list through 1987. Sixty one of
them no longer existed and twenty one fell off the “Top
100” list.
• The overall long-term return to the shareholders from
this is group of 18 companies was 20% less than that
of the overall market.
• Only two companies, General Electric and Kodak
performed better than the overall market. Since then
Kodak’s performance deteriorated significantly.
14
15. Can We Beat The Odds?
Current Business Future Business
• 80% of all venture capital investments fail
• Over 90% of companies fail to sustain above-average
shareholder return for longer term
• 75% of all new products that established companies
put into their markets fail
15
Sustaining Growth is Difficult in the Long Term
16. Classical Management Control System
Strategy & Focus on Financial
Vision
Measures
Personal Review &
Incentives Budget Reorient
Planning &
Capital
Allocation
Designed Around Short-term Control Oriented Financial Framework
17. The Alignment Paradox
Only 5% of the work
force understands
the strategy
85% of executive
Only 25% of 9 of 10
teams spend less
managers have Companies Fail
than one hour per
incentives linked to to Execute
month discussing
strategy Strategy
strategy
60% of
organizations don’t
link budgets to
strategy
You Can’t Manage Strategy With a System Designed for Operational Control
Source: Fortune Magazine Survey
18. Strategy Implementation – Need of a Framework
Vision
Long Term Goals
Balanced Framework: End Strategy Everyone’s
Results and Drivers of Job
Performance
19. Benefits of BSC – Evidence?
• Survey conducted with the US Institute of
Management Accountants’ members in 2006, the
results of which included:
– 88% of members from organizations regularly using the
Balanced Scorecard reported improvements in
performance; and
– 66% stated that they also achieved increase in profits
20. The Balanced Scorecard
Strategy Implementation
Using
Measurement
To
Communicate, Focus, Review And Align
21. Background
Conceived In 1991
Robert Kaplan: Harvard Professor
David Norton: Management Consultant
Several insights into the process based
on work done
22. Balanced Scorecard: Evolved Framework
The Vision & Strategy
The Vision & Strategy
Financial
To satisfy our shareholders,
Effect what financial objectives must
we accomplish?
Customer
To achieve our financial goals, Results
what customer needs must we
satisfy?
Internal Business Process
Cause To satisfy our customers, in which
internal business processes must
we excel?
Innovation, Learning & Growth
Actions
To achieve and maintain a
competitive position, how must the
organization learn and improve?
25. BSC Addresses Barriers to Strategy Implementation
Translating Vision & Strategy
Translation Through
Objectives and
measures
Communicating & Linking Feedback & Learning
Aligning
Organization, Review Strategy In
Departmental and Balanced The Light Of Recent
Individual Scorecard Performance
Objectives
Planning &
Resource Allocation
Driven By Strategy
Business Planning
A Management System Built On Strategy: Goal is to enable effective corporate
management
26. Benefits of Implementing BSC
• It makes strategy operational
• Translates strategy into performance measures
and targets
• Brings to focus drivers of future performance
– Focused measurement for “success”
• Umbrella/filter for a variety of diverse corporate
programs
• Aligns employees to strategy execution
27. Keeping Up With Change
Sustaining mechanisms
to build on success
Benefit of
Balanced
Change Scorecard
Failure of change
Ongoing business management systems
to exploit benefits
37. Internal Process Perspective
Innovation Customer Supply Chain Regulatory
Management Management Management Management
Product
Customer Operational Good
Service
Intimacy Excellence Neighbor
Leadership
% New Product Sales
Target Segment
Share Quality Regulatory
New Product Intro.
Vs Competitors’
Contact Cost Legal / Ethical
Management
Process Capability
Schedule Community
Complaints
Time to Market
43. Building the BSC
Translating the Mission and Vision into Desired Outcomes
Mission
Why we exist
Vision
What we want to be
Core Values
What we believe in
Strategy
Our game plan
Balanced Scorecard
Implementation and focus
Strategic Initiatives
What we need to do
Personal Objectives
What I need to do
Strategic Outcomes
Strategic Delighted Effective Motivated and
Shareholders Customers Processes Prepared Workforce
44. Step 1: LT Goals – Definition
• Long Term Goals (LT Goals)
– Statements (quantitative/ qualitative) that give tangible
shape to aspirations based on the Vision
• 3 to 5 year time horizon
• Directional
• Will not include aspects of actions/ how to
– Example
• Achieve revenues of 1000 cr
• Be a global player/ number one in market
– Not a LT Goal
• Increasing sales
• Improve market share
• Enter a new market
45. Step 2: Strategic Objectives – Definition
• Strategic Objectives
– Provide a direction for meeting the Long-Term goals
– They are high level how's which can hold in there
umbrella a series of strategic initiatives
• Example
– Expanding geographical reach
– Entering into strategic alliances
This assumes that
– Deliver first time on time the strategy of the
• Not Objectives organization is
articulated based
– Open an office on which the
objectives can be
– Appoint an agent
defined.
– Change a vendor
46. Step 3: Strategic Metrics – Definition
• Finalization of Strategic Metrics and Targets
– For each strategic objective
• The targets associated with each metric will need
to be finalized based on baseline performance
which will need to be ascertained
47. Types Of Strategic Measures
Strategic Objective
Outcome Measures Performance Drivers
Common Measures Strategy Dependent
Across The Industry Unique Measures
Lagging Measures Leading Measures
To Gauge Outcomes Of To Understand processes
Strategy And Activities
48. Selecting Measures
• Caution
• Do not select what “can” be
measured: select what “should” be
measured
• Counter balance the measures to
prevent strategy distortion
• Restrict the number of measures to
the level of control / action
Lag / Lead Existing / Strategic Measure Degree Of Cultural Change
New Impact Cycle Diff Shift Quantum
49. Step 4: Strategic Initiatives – Definition
• Strategic Initiatives
– Specific actions which help realize the strategic objective
and achieve associated target
– Operationalize objectives on a daily work / project level
basis
– One or more initiatives will be typically needed for
achieving an objective
• Example
– Objective is: Improve project management
– Initiatives could be:
• Create project planning templates
• Establish method for tracking risks
• Establish method for interdependency management
50. LT Goals – Objective – Initiatives
Quality Organization
Sales – 1.5 bn USD LT Goals & International
Standards on QHSE
Customer Deliver first time on Process
Increase win-rate Objective Objective
time
• Hiring people from
customer/competition • Set up interdependency
• Influence design of tender Initiatives management
document so that it favours USP • Reduce execution defects in
of Organization process
51. Prioritizing Strategic Initiatives
Development
Quality Projects,
Projects, Activities, etc.
–1– Activities, etc. Corporate
Identify Marketing Projects,
Projects, Activities, etc.
Initiatives Activities, etc.
Financial
Perspective
–2–
Screen Customer
Perspective
Initiatives
Internal
Perspective
Organization
Learning
Output: Short List of Strategically Aligned Initiatives
54. XYZ Group Strategy Map
Financial Enhance Long-term
Shareholder Value
Double Sales In 4 Yrs No. 1, 2 or 3 Market Player Double Profits In 3 yrs
Customer loyalty / value
New Customers / Markets
Brand Equity
Customer
Business Review Process Finance Review Process
Business Reputation Management Business Excellence
Processes
Learning & Growth Leadership Talent Retention / Company / Employee
Development Mobilization Alignment
Strategic Thinking Code Of Conduct Internal Communication
55. BSC – Example
Objective Initiative Owne Lead Target Lag Metric Target
r& Metric
Team
Industry wise Identifying and a) % sales a) 15% a) No of new a) 5 /
focused selling developing increase / b) 25 % applications industry
industrial specialist industry hit rate > developed / / annum
(Pilot in one area- b) No of 1L Industry b) No b) 100
Power/ Defense ) application business of applications % where
s shown for applicabl
transplante transplant/ e
d/ Industry
industry
Enhance product Identification and Business > 100 L / a) No of a) 10 /
portfolio through finalization of generated annum agencies month
new agencies agencies (> 100L through interacted / b) 2/
potential business ) new month b) No of annum
agency agencies
identified and
launched
Enhance business Formation of JVs % increase Rs 50 L / No of JVs / 1/Annu
by JV workshops in turnover JV / Division / Year m
from JVs annum
57. Align All Levels Of The Organization
Step 2.
Step 1. Each SBU develops
A Corporate Scorecard Corporate / Group a long-range plan
defines overall strategic and BSC consistent with the
priorities and context corporate strategic agenda
SBU SBU
SBU C
A B
Support Functions
Step 4.
Step 3.
Departments, teams
Each Support Unit
and individuals develop
develops a scorecard to Teams and scorecards consistent
support the internal
with their organization’s
customers Individuals strategy
58. Org Strategy Map Final Draft
Target 2012 Target 2012
•XY bn USD Turnover •Major Player in rrr regions
•12% + PBIT /Year •International standard on QHSE
•ROCE – 40% •New products - mnp
Financial
F1 - Increase
revenue F2 - Cost
(international & competitiveness
domestic)
Perspective
Customer
C1 - Focus on new
products, services and
regions
Process
Internal
P3 - Reduce cost and
time over-run
& Growth
Learning
Indicate cause and effect linkage
59. Sample SBU - Strategy Map: Target 2012
Cascaded from Corporate •ZZ Bn USD Turnover
•8% + PBIT /Year
•Best regional service provider
(MENA)
Financial
F1 - Establish the
F3 – Cost
presence in the segment
Competitiveness
(grow revenue)
Perspective
Customer
Process
Internal
P3 - Improve
adherence to internal
project milestones
& Growth
Learning
60. Example of Strategic Initiatives for Procurement
1. Identify and source from low cost countries (including India)
P F1 Enable Cost for competitive sourcing, and establish and implement the
Competitiveness for process
Organization 2. Create the infrastructure to make skids in-house
3. Develop alternate vendors in single source situation
61. Performance Appraisal Aligned to BSC
Performance
Planning for Development
Appraisal Planning
Strategic Other Skill
Strategic KRAs Routine KRAs
Competencies Gaps
BSC Routine Job
based on JD
64. Validation of Assumptions
• Collect information on actual status on
assumptions made at the time of defining each
Objective/ initiative
• Ratify assumption
– Assumption incorrect
• Possibility of initiative failure
65. BSC – Performance Tracking
• Review mechanism
– Integrated with business review
– Coordinated by BSC coordinators
– Use of defined templates and presentations
– Compilation prior to review meet
• Outcomes
– Mid-course corrections