Jitender Singh Rahvat N 25 Mangesh Gedam N32

Jitin Maurya N 26 Manoj Kumar Sabat N34

Kapil Kapoor N 26

9 September 2009 301- Business Policy & Strategic Management 1

 • Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example

9 September 2009 301- Business Policy & Strategic Management 2

 • Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example

9 September 2009 301- Business Policy & Strategic Management 3

 The balanced scorecard is a new management concept
which helps managers at all levels monitor results in their
key areas .

 Introduced by Robert Kaplan and David Norton

 "The Balanced Scorecard - Measures that Drive Performance" in the
Harvard Business Review in 1992
 "The Balanced Scorecard: Translating Strategy into Action", published
in 1996

 The balanced scorecard approach provides a clear

prescription as to what companies should measure in order
to 'balance' the financial perspective.
9 September 2009 301- Business Policy & Strategic Management 4
 The Balanced Scorecard is a management tool that provides
stakeholders with a comprehensive measure of how the
organization is progressing towards the achievement of its
strategic goals

 The Balanced Scorecard:

 Balances financial and non-financial measures
 Balances short and long-term measures
 Balances performance drivers (leading indicators) with outcome
measures (lagging indicators)
 Should contain just enough data to give a complete picture of
organizational performance… and no more!
 Leads to strategic focus and organizational alignment.
9 September 2009 301- Business Policy & Strategic Management 5
 Traditionally organizations have always been measured by
their financial metrics only
 But Organizations cannot directly influence financial outcomes, as
these are "lag" measures
 Financial metrics (Net Profit, RoCE, PE, Financial Ratio’s etc.) are only
part of the total picture and are lagging indicators

 The use of financial measures alone to inform the strategic

control of the firm is unwise.

9 September 2009 301- Business Policy & Strategic Management 6

 By focusing not only on financial outcomes but also on the
operational, marketing and developmental inputs to these,
the Balanced Scorecard helps provide a more comprehensive
view of a business, which in turn helps organizations act in
their best long-term interests for e.g.
 To achieve strategic objectives.
 To provide quality with fewer resources.
 To eliminate non-value added efforts.
 To align customer priorities and expectations with the customer.
 To track progress.
 To evaluate process changes.
 To continually improve.
 To increase accountability
9 September 2009 301- Business Policy & Strategic Management 7
 • Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example

9 September 2009 301- Business Policy & Strategic Management 8

Adapted from The Balanced Scorecard by Kaplan & Norton

9 September 2009 301- Business Policy & Strategic Management 9

 Present in traditional scorecards of a company as well

 Aims to satisfy the companies constituents, what financial

and regulatory objectives must the company accomplish?

 Possible Performance Measures

 Cost / Unit
 Unfunded Requirements or Projects
 Cost of Service
 Budget Projections and Targets

9 September 2009 301- Business Policy & Strategic Management 10

 To achieve the companies vision, what customer needs must
the company serve?

 Possible Performance Measures

 Customer Satisfaction (Average)
 Satisfaction Gap Analysis (Satisfaction vs. Level of Importance)
 Satisfaction Distribution (% of each area scored)

9 September 2009 301- Business Policy & Strategic Management 11

 To satisfy the companies customers, in which business
processes must the company excel?

 Possible Performance Measures

 Cycle Time
 Completion Rate
 Workload and Employee Utilization
 Transactions per employee
 Errors or Rework

9 September 2009 301- Business Policy & Strategic Management 12

 To achieve the companies goals and accomplish core
activities, how must the employees learn, communicate and
work together?

 Possible Performance Measures

 Employee Satisfaction
 Retention and Turnover
 Training Hours and Resources
 Technology Investment

9 September 2009 301- Business Policy & Strategic Management 13

 • Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example

9 September 2009 301- Business Policy & Strategic Management 14

 Environmental Scan

Strengths V/s Weaknesses

Opportunities Threats

Values

Mission &
Vision

Strategic Issues
Strategic Priorities

Objectives, Initiatives, and Evaluation

9 September 2009 301- Business Policy & Strategic Management 15
I. Translate the strategy to operational terms.

II. Align the organization to the strategy.

III. Make strategy everyone’s job.

IV. Make strategy a continual process.

V. Mobilize change through executive leadership

9 September 2009 301- Business Policy & Strategic Management 16

9 September 2009 301- Business Policy & Strategic Management 17
 The Balanced Scorecard Provides a Framework to
Translate the Vision and Strategy Into Operational
Terms

 The Balanced Scorecard is used to Clarify Strategy

and Translate it into Focused, Actionable Objectives

 The Balanced Scorecard is used to implement the

strategy

9 September 2009 301- Business Policy & Strategic Management 18

 • Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example

9 September 2009 301- Business Policy & Strategic Management 19

 THANK YOU
9 September 2009 301- Business Policy & Strategic Management 20