MAKING BALANCE SCORECARD WORK: THE WORLDCLASS LIGHTING EXPERIENCE

Submitted by –

Group 3

Amisha Gupta - MBA2020-024

Amulya Sanivarapu- MBA2020-026

Arpit Malviya - MBA2020-040

Pranay Kundu - MBA2020-116

INTRODUCTION:

Worldclass Lighting was an industry leader with recognised expertise in developing, manufacturing
and applying innovative professional and consumer lighting solutions. In 2002 world class launched
the business balanced scorecard for which the organisation was divided into four perspectives:
financial, customer, process, and learning and growth.

AP CEO deemed the launch of the balanced scorecard quite successful in the organisation at start
when enthusiastic staff work hard to report correct information of the balanced scorecard but as the
year past and the indicators where hectic and time taking so the managers didn't report appropriately.

There were majorly three implementation issues

1. Measurement of KPIs:

AP CEO pointed out that the elements were difficult to measure or quantify as a list of KPIs balance
score card.

Ex: learning and growth included quantitative measures such as number of staff to be recruited,
number of position at different competence level and etc. Though these quantitative measures were
made as specific as possible such measures were not always meaningful enough to cover all the
purpose and objective of the perspective.

The measurement problem occurred for audit results also. In the audit result when non-compliance
used to happen, management was able to make remedial and corrective actions to minimise the risk
but the management was concerned about the compliance result of different processes when the
compliance result became an indicator.

On balance score card, this created undue pressure on managers to avoid non-compliant result. To
avoid missing the target for non-compliance manager does start to hide compliance information from
disclosure to scorecard in the review. This in turn undetermined the effectiveness of the scorecard
for the top management.

2.Target setting:

Target setting defined the kind of indicators are objective to be achieved in the beginning of the year.
But some indicators were difficult to measure such as culture related objective, example: cultural
transformation with the kind of things that pose difficulties in the target setting process. So they were
removed from the balanced scorecard. But if they would have presented it in balanced scorecard, they
would not have had realistic target as they were subject to bargaining and negotiation between
mangers during the target setting process.

Once indicator was determined and the target was set , the staff used to direct their efforts in the
pursuit of the indicator which result in sub optimal use of resources but the CEO thought that the
resources should have been used for a better purpose the overall benefit of the organisation.

3. Over measurement:

The balance score card after sometime had longer and longer list of indicators which increased the
work of reviewing. during our earliest age when the number of indicators was low, it was easily
manageable but as the number of indicators increased it got difficult to handle such information and
also it used to take lot of time to review the score cards. Not only an increasing number of indicators
but also the diffusion of scorecard from the top level management to operational unit post the
problem as well.

Lot of effort required for complete review of score card made it impossible for him to evaluate
manager on all scorecard and metrics. Even if some of the balance scorecard were online for automatic
updates still it used lot of time to review on what had been done , who has responsible to take actions
and etc. This made CEO consider whether there was business need to execute all of these action plan.