Professional Documents
Culture Documents
Balanced Scorecard
Balanced Scorecard
Balanced Scorecard
BALANCED SCORECARD
A: I have worked on altitude for the last few flights and I have
gotten pretty good on it. Now I have to concentrate on proper
air speed.
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Q: to the participants
Would you like to board this plane after having this discussion ?
A: Perhaps not.
4 Balanced Perspectives
Financial
Customers
Internal Business Processes
Learning & Growth
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Industrial Age
Financial Control
ROCE
Prod Control
Profitability
Physical Capital
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Made
Many
Such
Measures
Obsolete
Information Age
Financial Control
ROCE
Prod Control
Profitability
Physical Capital
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Required
New
Capabilities
Information Age
Information Age
New
Cross Functional
Operating
Links to customers and Suppliers
Environment
Customer Segmentation
Global Scale
Innovation
Knowledge Workers
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Information Age
Human Capital
balanced scorecard
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History
Investment in
Customers
Suppliers
Employees
Processes
Technology &
Innovation
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Strategy
strategic thinking
•Anticipating changes
•Product/service and production designed
to accommodate expected changes
•Flexibility
•Ability to make quick changes
•Speed to market
•Agile manufacturing/ service
•Driving firm by using windshield not
the rear view mirror
•Creative and integrative thinking………
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Goal
Objective
Mission
Vision
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Financial
Perspective Customer
Internal
Perspective Business
Process
Perspective
Learning &
Growth
Perspective
Clarify mission &
Mission Vision
Vision statement
Trouble Reports
- identify data elements Module
Data Elements
A Balanced Scorecard Perspective
on Performance
FINANCIAL
Initiatives
Measures
Objective
Targets
How do we
look to
shareholders?
PROCESS
Initiatives
Measures
Objective
Targets
Targets
How do our
Vision
customers and What must
Strategy we excel at?
see us?
LEARNING and
GROWTH
Initiatives
Measures
Objective
Targets
Can we
continue to
improve and
create value?
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4
Perspectives
Financial
Financial Perspective Evaluate
Perspective the Profitability of the Strategy
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4
Perspectives
Customer
Perspective
3 sub
Processes
FINANCIAL PERSPECTIVE
Target Actual
Objective Measures Initiatives Perform Perform
Customer Perspective
Target Actual
Objective Measures Initiatives Perform Perform
Meet Specified
Delivery dates on time delivery Re-engineer order 92% 90%
Delivery process
Clarifying and
Translating the
Vision & Strategy
Setting Targets
Aligning Strategic
Initiatives
Allocating Resources
Establishing Milestones
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Plan to Change
Set target for 3-5 years
Stretch targets
Benchmarking
Planning & Alignment of Targets
Target Setting Alignment of Strategic Planning
with operational Budgets
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Strategy &
2 Strategy not Vision
Linked to Dept Team
& Individual Goals
& Capital
Allocation
Strategic Feedback
Communicating Balance &
And Linking Scorecard Learning
Let Us Review
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4
Perspectives
Financial
Perspective Customer
Internal
Perspective Business
Process
Perspective
Learning &
Growth
Perspective
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Translating SCORECARD
the strategy to operational terms
The Strategy
Financial Perspective
If we succeed, how will
We look to our
Shareholders?
Measurement is the
language that gives clarity
To vague concepts Customers Perspective
To achieve our vision,
How must we look to our
Customers ?
Measurement is used to communicate,
Not to control Internal Perspective
To satisfy our customers,
Which processes must
We excel ?
Strategy can be described as a series of Organizational Learning
Cause and Effect relationship
To achieve our vision, how must
our organisation team
Improves?
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Clarifying and
Translating the
Vision & Strategy
Setting Targets
Aligning Strategic
Initiatives
Allocating Resources
Establishing Milestones
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Make SCORECARD
Strategy Everyone’s Job
CORP
SBU
Education
Personal Goal
Alignment
Balanced Pay checks
Strategy
60% OF Org
Don’t link
Strategic Learning
Strategy & Loop 85% of Mgt teams
budgets Spends less than
1 hr per month
Balanced On strategy
Scorecard issues
78% orgs lock
Budgets to an Budget 92% of orgs
Annual cycle Do not report
On lead
Management Control indicators
Loop
Performance
Input Output
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Questions