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Robert Kaplans interview with Larry D. Brady.

Background and Pilot Study:


Larry Brady was the EVP of FMC Corporation, USA. In the interview with
Robert Kaplan he mentioned about the success of FMC Corporation along
with the issues that the management had to face during and after
implementation of BSC. FMC Corporation had 21 divisions and 5 business
segments with total 300 product lines. Larry believed that the best time to
bring about an innovation is when the company is actually performing
well. Out of the 21 divisions a pilot study or implementation of BSC was
done in 6 divisions. These included 15 to 20 measures in the BSC which
were organization specific.
Corporates vested interest:
The corporate believed that the managers were still levelling off the future
and long term goals with short term gains. As a result the overall working
of the divisions could be deflated. In order to include financial inclusion as
well as align the short term goals of managers with the firm wide long
term goals 6 divisions were chosen.
Managers discomfort:
Some managers accepted it as a pilot study but most tried to revolt as this
would unveil the core intentions of managers to even out or balance out
their personal benefits over corporate wide long term goals. They thought
that corporates are pushing their pet project through these employees.
Steps Followed:
An initial meeting along with the corporate members was completed. The
importance and procedures for BSC were discussed. In order to get
effective results from every managers and understand effectively
utilization of financial resources the Finance department was also included
in the meeting. This was done to make aware the managers that all the
financials are going to be analysed along with the progress of the divisions
and there bringing in more seriousness towards the project. Also this
would enable the managers to track their divisions progress and bring
about transparency in the process.
Outcome:
improvement in of the divisions led to 35% lower cost due to inventory
handling. Out of 12, 7 new strategic variables were added by divisional
heads and managers. Some of the managers even made three levels for
implementation of the BSC. They were :
1) Denial: Not accepting the new procedures and remaining in the silos to
avoid any new change.
2) Medicinal: Building an attitude of Lets get done with this once and for
all and making people put in all possible efforts to complete the task with
utmost dedication.
3) Ownership: Making the managers feel responsible of their work and
importance towards achieving final goal of company.

Managerial Learning:

Resistance to change is an inevitable part for every new idea.

Convincing people and reducing restraining force by educating employees,


bring transparency any autonomy to work can cause employees to
encourage change.
Long term benefits to company and alignment of employees goals are a
must.
BSC brings about total inclusion of innovation, development in internal
process, how the company looks in terms of financials and to customers.
Every stake holder should be informed about the potential drawbacks and
benefits of the system and only then it should be implemented.
The best time to revolutionize the system is before the companys growth
becomes stagnant.

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