(Very Good) 2gc-Introduction of Balanced Scorecard Presentation

Introducing the Balanced
Scorecard
• This presentation, prepared by 2GC Active Management, intends to provide
readers with an initial overview of the issues associated with implementation of
the Balanced Scorecard as a strategic management system
• The presentation introduces the following topics:
– General management issues related to strategic control
– The Balanced Scorecard
– Underlying Scorecard processes and success criteria
• It is intended for personal use and in-house presentations only
© 2GC Limited, 2001
• Supplemental notes are available on request – please email: notes@2gc.co.uk
2GC 2GC Limited

Albany House, Market Street
Active Maidenhead, Berkshire, SL6 8BE, UK
Tel: +44 (0) 1628 421506 www.2GC.co.uk
Management Fax: +44 (0) 1628 421507 Info@2gc.co.uk
Structure of presentation
General What is Balanced

management Balanced Scorecard
issues Scorecard design
Balanced Balanced
Success
Scorecard Scorecard
criteria
development deployment
2GC
Active
© 2GC Limited, 2001 (V1.1) November, 2001 Page 2 Introducing the Balanced Scorecard Management
General management issues
What is this all about?
Dilbert
2GC
Active
Implementing Strategic Goals
97% 80% 52% 33%
Clear Some Significant

Vision
strategic strategic strategic
plans success success
From: Strategic Performance Measurement & M anagement
Business Intelligence / Renaissance Worldwide, 1997
• Almost all organisations have a strategic vision – few manage to realise it
2GC
Active
Barriers to effective performance management
Too many measures and

loss of focus
Entrenched measurement
systems
Unjustified trust in informal

feedback systems
Fuzzy objectives
Source : Based on pape r by John H Lingle and William A Schiemann; “F rom balanced
scorecard to strategic gauges: Is measurement worth it?“, published in
“Management Review ”, Volume 85, Issue 3; Mar 1996, p. 56
2GC
Active
Realising the need to change
What? How?
Who?
Why?
When?
2GC
Active
What is Balanced Scorecard?

Balanced Balanced
Success
Scorecard Scorecard
criteria
2GC
Active
What is a Balanced Scorecard?
•“The idea of the Scorecard is to

describe the essential ingredients of
business success”
(Olve et al. “Performance Drivers”)
One of the
most
•“Balanced Scorecard is one of the 15 dangerous
most important management forms of
concepts ever introduced in Harvard human error
is forgetting
Business Review” what one is
(Harvard Business Review, 75th Anniversary trying to to
issue) achieve
Paul Nitze
•50% of North American companies
claim to be using Balanced
Scorecard
(Recent survey by Bain & Company)
2GC
Active
Background & underlying philosophy
•What is it?
– Strategic communication and
performance measurement tool
•Origins
– Developed from a tool developed in Financial
Financial Perspective
Outcomes
Outcomes
1980s, but some similarities with
other pre-existing tools Customer Perspective
– Introduced to wider audience in early
1990’s by R. Kaplan & D. Norton in Internal Perspective
Activities
Activities
series of articles in Harvard Business
Review
Learning
Learning &
& Growth
Growth Perspective
Perspective
•Underlying philosophy
– Clear communication of goals and
priorities
– Learning & team-working
2GC
Active
Do what needs to get done…
Create / amend
strategic vision
What do we want to achieve

and what must we do to
Review results and Create/change achieve it?
cause & effect linked strategic
assumptions objectives
Balanced
Scorecard
Are we doing what we set out

Develop/revise to do?
Take action measures &
targets
2GC
Active
Different applications for Balanced Scorecard
•“Management Control” •“Strategic Control”

– Maintain the temperature! – What temperature?
D A Y & N IG H T
70 80
60
Set Target
Heater: Run if HOT OFF COOL
room is below
target temp
Thermostat:
Compare with
Target
Measure
Room Temp
Assess Outcome
2GC
Active
Strategic control vs. Management control
Op
e ra
tio
sis
na
ha
le
Organisational
mp
m
hierarchy
ph
e
as
g ic
is
ate
St r
2GC
Active
What is the Balanced Scorecard?
The latest Balanced Scorecard thinking
•The “objective driven”Balanced

Scorecard has emerged as best Destination
Destination Statem
Statement
ent D istributio n:
D istributio n:
50 C ities
50 C ities
practice
S ales Vo lum e:
S ales Vo lum e:
50,000 M T
50,000 M T O ne M anufacturing S ite
O ne M anufacturing S ite
S ales R evenue : £ 50 M illion N o m ore than 6
S ales R evenue : £ 50 M illion CN o mBrand
ore ore than
Pro6ducts E m ploy er o f C hoic e:
R O C E : 7% MC oreumBrand
inim Pro ducts
sales volum es: E m ploy er o f C hoic e:
(# 1 in industry and rank ed in
CR O C E :Em
apital 7%p loy ed : N o m ore th an £45 m illion – M5,000
inim um
M Tsales volum
for each es: brand FM
c ore (#C1Gintop
industry
10) and rank ed in
C apital Em p loy ed : N o m ore th an £45 m illion – –2,000M
5,000 TM for
T for each
each c oreproduct
m ajor brand FM C G top 10)
– 2,000M T for each m ajor product
M arketing Sales
M arketing Sales
O verall: D BX s een as one of top 10 FM C G C o.’s s ervicing
Brand ing: Clear brand propositions / system s O verall: D BX s een as one of top 10 FM C G C o.’s s ervicing
Brand ing: for
established Clear
th e brand propositions
six c ore brands / system s key acc ounts in th e c ountry (and #1 in category)
key acc ounts in th e c ountry (and #1 in category)
• D established
BX h as two for thee top
of th six fiv
c ore
e c brands
ateg ory product brands
• • PD BX h as two
roduct/hous of th e top
e brand fiv e ess
aw aren c ateg ory product
targets in D B Xbrands
city
• strategies
P roduct/hous
achieve brand
ed aw aren ess targets in D B X city
strategies achiev ed C usto m er M arket F ocus: S ales s taff achieving s et
M ed ia and prom otio nal strategy : C ity m ark et share Ctarg
ustoetsminerline
M arket F ocus:
with city S ales
s trategies for sfocus
taff achieving
on customs et
er and
Mtarg
edets
ia and prom
achiev otio nal
ed within agreedstrategy
budg et: C ity m ark et share
mtarg
arketetsissu
in line
es with city s trategies for focus on custom er and
• Mtarg etsand
odels achiev ed within
m easures of agreed
th e relativbudg
e im etpac t of all
m arket issu es
Strategic
Strategic Linkage
Linkage M
Model
• mM odels and m easures of th e relativ e im pac t of all / • Ass ess using distribution by chann el, visibility and trad e
arketing lev ers av ailable to assist in th e ev aluation
odel
• Ass ess using distribution by chann el, visibility and trad e
m arketing levarketing
ers av ailable to assist in th e ev aluation / prom otions
targ eting of m ac tivity prom otions
targ eting of m arketing ac tivity
Im pro ved S kills and Pro cesses: S tandardised and
Im pro ved
transp arentSmkills andproc
ark eting Proesscesses: S tandardised
es dev eloped and agreedand Im pro ved S kills and P roce sses: Standardised and
transp Im pro ved
transp arentSskills and P roce
ales process sses:edStandardised
es d evelop and
and agreed within
within Darent
B X andm ark
witheting proc ess es dev eloped and agreed
G roup
• Mwithin D Bteam
arketing X andskills
with targets
G roup (b ased on extern al D transp
B X an darent
withsGales
roupprocess es d evelop ed and agreed within
D B X team
an d with
skillsGtargets
roup
• benchm
M arketing teamp arisons)
ark com skills targets (b ased
achieved on extern
through al and
training • Sales (b as ed on extern al b enchm ark
benchm ark(wh
com p arisons) achieved through training and • com
Sales
paristeam
ons)skills
achievtargets (b as ed
ed through on extern
training andalrecruitm
b enchment
ark
Im proved Sh areh older recruitm ent ere applicable) com paris ons) achiev ed through training and recruitm ent
Im proved Sh areh recruitm ent (wh ere applicable) (where applicable)
V alu e (RO C E) older (where applicable)
V alu e (RO C E) Managing Director O rg anisatio nal S tructure Info rm ation Sy s tem s
Managing Director O rg anisatio nal S tructure Info rm ation Sy s tem s
App rop riate in form ation s ystem s th at w ill m eet D B X’s n eeds
• C lear sc ope and r ole statem e nts exis t for all functio ns (in cluding Sales
•&C lear eting):
Mark sc ope and r ole statem e nts exis t for all functio ns (in cluding Sales • App
All rop
necriate
ess arinyform ation s e
m anagem ystem s th at
nt inform w ill pmroduc
ation eet Ded
B X’s n eeds
w ithin p re-agre ed tim elines a nd scales
Marketing Director Manufacturing Director Sales Director • All nec ess ar y m anagem e nt inform ation p roduc ed w ithin p re-agre ed tim elines a nd scales
S ales G rowth (b y C it y G ross C ontribution Marketing Director Manufacturing Director Sales Director & Mark eting):
G ross • Supp orting functions (includ ing supply ch ain) w ill be achieving all
S ales
by G
P rowth
roduct)(b y C it y (A fter C it yCS
ontribution
ales and A sset Tu rn O verh eads as a % o f • agSupp M anagem e nt
(A fter C it y S ales O verh eads
N S V as a % o f reed orting functions
s ervice (includ
level targets wing supply& ch
ith sales m ain) w ill be achieving all
ark eting Mmanagem e nt on s tra teg y and evalua ted on their
by P roduct) M arketing ) and A sset Tu rn
Product Manager Factory Director Regional Sales Manager ag reed s ervice level targets w ith sales & m ark eting • Senior m anagem ent w ill be com itted to w orking
M arketing ) NSV • abSenior
Product Manager Factory Director Regional Sales Manager
S up ply C hain ility to m anagem
coach ent w/illguid
/ advise be ecom
and m itted
ens ureto wthaorking
t tasks onare
s tradelega
teg y and
ted evalua ted on their
effectively.
ab ility tonalcoach / advise / guid e and
w ill ens
exisure thawt ill
tasks are todelega
ac t mted oreeffectively.
C ost efficient supp ly cS upbply
hain as edConhain
flexib le p roduc tion lines w ill deliver: • Professio
• w ithin
Professio
m iddle
nal gmuid
iddle
m a nage
ms,
a nage
m ent
mave
ent the
t that
w ill skills
exis t that
b e able
w ill bfor
e able
independently
• CIncr
ost eas
efficient suppnsiveness
ed respo ly c hain b as
to ed onetflexib
m ark d emle p roduc tion lines w ill deliver:
ands de fined eline a nd h req uired theirtojob
ac /t rmole
ore independently
w ithin de – fined g uid eline s, for
a ndkey
h ave the skills req uired for their job / r ole
Customer Perspective
Suc cession plans positions wi ll exist

I H ave a G o od • • Low
Incr
ereas ed respo
c ycle tim e s nsiveness to m ark et d em ands
DB X U nderstan ds an d I H ave awith

G o od – – R ecruiting
Suc cession
a ndplans for policies
training key positions wi lltoexist
will aim raise middle manage ment com petence to
DB X U nderstan R elationship DBX • • Product
Low er /c ycle tim efresh
c hannel s ness targe ts
Resp onds to m y Nds an d
eeds R elationship with D B X • Product / c hannel fresh ness targe ts
– meet
R ecruiting a nd training
internationa policies will aim to raise middle manage ment com petence to
l standards
Resp onds to m y N eeds meet internationa l standards
D B X has an Excellent C onsum er Franchise

2G C
D B X has an Excellent C onsum er Franchise A2G
ctiveC
© 2GC Limited, 19 99 21 Novem ber, 2 00 1 Page 4 2GC Limited / Introduction to 2 GC Active M anage ment A ctiveent
M anagem
D B X P rodu cts are m y D B X P rodu cts are G ood D B X P rod ucts are V isible © 2GC Limited, 19 99 21 Novem ber, 2 00 1 Page 4 2GC Limited / Introduction to 2 GC Active M anage ment M anagem ent
DBX C hPoice
roduPcts
rodare my D BVXalue
P rodu
First ucts for cts are
M on eyG ood D B Xan
P rod
d Aucts
vailabare
le V isible
First C h oice P rod ucts V alue for M on ey an d A vailab le
Balanced
Balanced Scorecard
Scorecard DDocum
ocumentation
entation
Learning & Growth Internal Perspective
Learning & Growth Internal Perspective
Im plem ent M ajor D eliver E xc ellen t D elive r E xc ellent E ffective C ontrol of

D rive Trad e Term s by D Con
eliver E xc E ffective M an agem ent
D eliver C ustom er Imnt
plem ent M ajor sum erellen t D eliveC
In ternal r ustom
E xc ellent
er E ffective
B usiness (N o CSontrol of
urp rises)
D riveCTrad
han e Term s by D eliverS tan
C ustom
dard ser
A ccou M anagem en t oEfffective M anAagem
ssets ent
nel S ervice A ccou nt M anagem en t Con sum er
P ropositions In ternal C ustom er
S ervice
Com p any
o f Com p any A ssets
B usiness (N o S urp rises) O bjective M easure S up porting Initiatives
C han nel S ervice S tan dard s P rogram me
P rogram m e P ropositions S ervice O bjective M easure S up porting Initiatives
I1 D rive tra de term s by cha nne l: W e w ill develop clear tradin g • % T rade c ustom ers ad hering to trade • D evelop stan dard tradin g term s (G G )
I1 D rive
term s fortra de term
different s byercha
custom grounne ps.l:WWeewwillillachieve
developour clear
targettradin g •standard
% T radeterm
c ustom
s amers ad hering
o ngst a sam to
pletrade
of top XX • D evelop stan dard tradin g term s (G G )
term soffor different custom standard
ers term s am o ngst a sam ple of top XX
levels availability, visibilityeran
grou ps. W
d trade suepport
w ill achieve
via th esour target
e tradin g custom
levels custom ers
term s. of availability, visibility an d trade su pport via th es e tradin g
term s.
Perspective
I2 D eliver c ustom er service sta nda rds: Deliver tim ely first • % Cases delivered in full against order • Logistics Project (R S)
Perspective
I2 D eliver •qua
% ntity
Cases delivered in full against order • •SA
Logistics
P ProjectProject
(PH ) (R S)
D evelop an d R etain D evelop P ro fessional,
D evelop P roted
fessional,
U n derstand Im pact O f De velop S ervice D evelop B etter W ork class s ervicceustom
to th e er
tradeservice sta nda rds: Deliver tim ely first
an d retailers.
D evelopalan
P rofession Mdanagers
R etain Cu stom
Cu stom
er O rien
er O Fo
rienrce
, S killed
ted , S killed
U n derstand
V arious Im pact
M ark eting L eveOrsf De
A gvelop S ervice
reem en ts DPevelop
racticesB etter W ork
an d IS
class s ervic e to th e trade an d retailers. • %qua ntity delivered on tim e
Or ders • SA P Project (PH )
P rofession al M anagers S ales V arious M ark eting L eve rs A g reem en ts P ractices an d IS • % Or ders delivered on tim e
S ales Fo rce
I3 Im plem ent m a jor a ccount m a na gem ent program m e: • % of m ajor accou nts w ith a business plan • D efine “m ajor” acc ounts (AC )
I3 • % of m ajor accou nts w ith a business plan • D efine “m ajor” acc ounts (AC )
WIm plem
e will ent mto
continue a jor
treata ccount
our custom m aers
na as
gem businentessprogram
partn ers. m e:
2G C WW e ewill
willestablish
continuean to acc
treat ourdevelopm
ount custom ers entasmbusin
odel toess partn ers.
ensure high
2G C
Active W e will establish an acc ount developm ent
qu ality relationships exist w ith k ey acc ount custom ers. m odel to ensure high
© 2GC Lim ited, 1 999 29 February, 200 0 Page 5 2GC Lim ited / Introduction to 2GC Active M anagement Active
M anagement qu ality relationships exist w ith k ey acc ount custom ers.
© 2GC Lim ited, 1 999 29 February, 200 0 Page 5 2GC Lim ited / Introduction to 2GC Active M anagement M anagement
I4 D eliver exce lle nt co nsum er propositio ns: W e m ust m eet • # Brand S ystem s signe d off b y OE • D evelop c ore bran d propositions (AC )
I4 D eliver
consum exce lle
er needs nt co
throu gh nsum er propositio
th e developm ent an d cns: om mWunication
e m ust m of eet • # Brand S ystem s signe d off b y OE • •N PD
D evelop c oreImbran
Proc ess d propositions
provem (AC )
ent (AC /AD)
anconsum
integrateder needs
bran dthrou gh th e developm
proposition. ent an
In th e NPD d c om
s ector wmewunication
ill of • •C ream
N PD ing
Proc ess Im(AD)
project provem ent (AC /AD)
an integrated bran d only
proposition. • C ream ing project (AD)
launch n ew products after theyInh th e NPD
ave s ector w e wqu
m et pre-agreed ill ality,
imlaunch
age, n eedn ew an
products
d volumonly after they h ave m et pre-agreed qu ality,
e criteria.
im age, n eed an d volum e criteria.
I5 D eliver exce lle nt interna l c ustom er service: W e will • SL A Q ualitative Evaluations b y S LA ow ners • Logistics Project (R S)
I5 D eliver exce lle nt interna l c ustom er service: W e will • SL A Q ualitative Evaluations b y S LA ow ners • •F actory
Logistics Project
C ost (R S) (D L)
R eduction
m onitor servic e level agreem ents betw een th e su pport functions
• F actory C ost R eduction (D L)
anmdonitor
s ales servic
an d mearketin
level agreem
g. W e wents betw een
ill develop a su th e su pport
pport functions
organis ation
an dwill
that s ales
driveanthdemachievem
arketin g. ent
W e ofw ill
m develop
arketin g a ansud pport
s ales organis
objectives. ation
that will drive th e achievem ent of m arketin g an d s ales objectives.
I6 Effective m a na gem ent of com pa ny a ssets: W e w ill • T otal w orking capital • Plant ration alis ation (AD )
I6 mEffective
onitor servic mealevel
na gem ent ents
agreem of com betwpa
eennythaessets:
su pportWfunctions
e w ill • •F ixed
T otalAsset
w orking capital
Utilisation • •L4Plant
/ L2 ration
(DL) alis ation (AD )
anmdonitor
s ales servic
an d mearketin
level agreem
g. W e wents betw een
ill develop th e
a su su pport
pport functions
organis ation • •O F ixed AssetDUtilisation
utstanding ebtor Da ys • •SAL4
P /(R
L2S)(DL)
an dwill
s ales • O utstanding D ebtor Da ys • SA P (R S)
that driveanthdemachievem
arketin g. ent
W e of
w ill
m develop
arketin g a
ansud pport
s ales organis
objectivesation
.
that will drive th e achievem ent of m arketin g an d s ales objectives .
I7 Effective co ntro l of the b usine ss (N o S urprise s): W e • “N o surprises” evaluation of actual • An alys e R isk project (P S)
I7 Effective •perform
“N o surprises” evaluation
bu dgetof
oractual • An alys e R isk project (P S)
will heighten co ourntro l oftothe
efforts b usine
stream line thss (N o S urprise
e organis ation to s):
h elpW e ance against forecast for:
will heighten perform anceperagainst bu dget or forecast for:
drive s oun d assour efforts
et m to stream
an agem ent an dline th ereduction.
c ost organis ation
W etowill
h elp - stock c over city
drive - stockper
c over
city per city
invok e saoun
c ostd cass et m an agem
onscious ent
culture to an d cplem
c om ost reduction. W e lining
ent our stream will - sales
invok e a c ost c onscious culture to c om plem ent our stream lining - salesalper
- nation city
c osts
efforts.
efforts. - nation al c osts
2G C
2G C
Active
© 2GC Lim ited, 1999 29 February, 200 0 Page 6 2GC Lim ited / Introduction to 2GC Active M anagement Active
M anagement
© 2GC Lim ited, 1999 29 February, 200 0 Page 6 2GC Lim ited / Introduction to 2GC Active M anagement M anagement
2GC
Active
What is Balanced Scorecard?
More than just a set of goals & measures
Balanced Balanced Balanced

Scorecard Scorecard Scorecard
design development deployment
• Value from first • Corporate strategic • All management

application measurement & Systems aligned with
management tool strategy
• Business model – divisions • Drive strategic

reflected in – business units behaviour into
relationship between – functions everyday decisions
strategic goals and operations
2GC
Active
Balanced Scorecard design

Balanced Balanced
Success
Scorecard Scorecard
criteria
2GC
Active
Where to go an how to get there?
•Best practice is to use a development

group that comprises the the likely
users of the Balanced Scorecard Vision
Vision
•Design choices should be based on
jointly held perception of a strategic Strategy
Strategy
“Destination”
Financial
Perspective
Outcomes
•The design should measure progress
Activities Outcomes
Profitability,
Profitability, growth,
growth, value
value
against the organisation’s key
Customer
Perspective
strategic objectives (activities and Perceptions
Perceptions of:
of: price,
price, service
service quality
quality
outcomes) Internal Perspective
Activities
•Links between strategic objectives Cycle
Cycle time,
time, productivity,
productivity, processes
processes
should be articulated – these express Learning & Growth
Growth Perspective
Perspective
the management team’s beliefs Knowledge
Knowledge // product
product development
development
about which activities drive which
outcomes
2GC
Active
Monitor progress in achieving goals
•Development of measures follow

clarification and agreement of
strategic objectives, because…
•Measures track progress in achieving ObjectivesFinancial Targets Initiatives

MeasuresPerspective
Perspective
Outcomes
Activities Outcomes
those objectives against agreed Profitability,
growth, value
value
targets Customer Perspective
Perspective
Perceptions
Perceptions of:
of: price,
price, service
service quality
quality
Internal Perspective
Perspective
Activities
•Identify and monitor extraordinary Cycle
Cycle time,
time, productivity,
processes
activities and projects furthering Learning
Learning &
& Growth
Growth Perspective
Perspective
achievement of objectives Knowledge
product development
development
2GC
Active
The components of a Strategic Balanced Scorecard
• Financial / Market Destination Statement Strategic Linkage Model (SLM)
Financial
– Total NSV £120m (nominal) – Profitable
Description of how the Graphic illustration of “cause and

Sales Growth
– Has achieved 10% CAGR on NS Drive
Increased
organisation will be at some effect” relationships between the

Demand
– Operating Margin: >10 %
– Controllable overheads less th
specific future date if the strategic goals that must be achieved if
Customer
Best value for The leading and
most innovative
money
– Operating Profit: £12m (nomin brand
management team’s strategies the organisation is to reach its

are successful destination state
Objective
Objective Description
Description Measures
Measures(Freq)
(Freq) Objective and Measure
Documentation
F1 Total Shareholder Return is above Group's • % CAGR of Total Shareholder
Total Sharehol der Return is above Group's • % CAGR of Total Shareholde
cost of equity over the medium to long Return
Group Strategy cost of equity over the medium to long
term.
Return
• ROIC (Target: > W.A.C.C)
Delivers Value term. • ROIC (Target: > W.A.C.C)
–Clear and concise description of strategic

F2
Achieve
Minimise net tax paid and WACC in the light of
Minimise net
operational
operational
andtax paid and WACC
commercial in the light of
decisions
• P&L account net tax charged
• P&L account net tax charge
a % of profit for financial yea objectives and the measures chosen to
concerning theand commercial
nature decisions
and sphere of Group's a % of profit for financial ye
Optimum Tax
Rate & WACC
concerning the nature and sphere of Group's
activities, and legal constraints. Optimum means
activities,
better and legal constraints.
than equivalent payments byOptimum means
known Group
• W.A.C.C.
• W.A.C.C. track their achievement
Objective Status Measure Value Target Perfo Progress Reporting Formats Initiative overview
F1.1 -30p 150p
Dividend expected kept at
Outperform
F1.2 8 18 1,000 pence leading to lo Illustration of how (and by whom) Overview of which initiatives
capital markets
previous years Scorecard information will be support which Scorecard
F2.1 200 185
communicated objectives incl. owners and
Increasing cash inflow fro
Cash & asset
deadlines for finalisation
2GC
Active
Balanced Scorecard roll-out

Balanced Balanced
Success
Scorecard Scorecard
criteria
2GC
Active
Balanced Scorecard Development
Development within the organisation
Main Board
The
Regional Cluster Regional Cluster Group Support
(Line Management)
optimal
Line Management Legal, Finance, HR, IS
role-out
sequence
Country 1 Country 2 Country 3 Country 4 Shared Service
is “Top (e.g. Supply Chain)
Down”
Dept 1 Dept 2
Team
2GC
Active
Development within the organisation
Corporate Support Function

Balanced Balanced
Scorecard Scorecard
Main Board
Regional Cluster Regional Cluster Group Support

(Line Management) Line Management Legal, Finance, HR, IS
Country 1 Country 2 Country 3 Country 4 Shared Service

(e.g. Supply Chain)
Dept 1 Dept 2
Co-ordinating Departmental
Operating Unit Balanced Balanced
Team
Balanced Scorecard Team Level Scorecard
Scorecard Balanced
Scorecard
2GC
Active
“Contractual” agreement between management teams
Board
Board level
level Scorecard
Scorecard
Overall Vision
St r
ate
How g y im
Objectives
p le
Subordinate me
Measures
Initiatives Subordinate Scorecard
Scorecard nta
& Targets t i on
Local Vision
What
Objectives How
Measures Team/Individual
St r Initiatives Team/Individual Scorecard
Scorecard
ate & Targets
g Team/Individual
ic d Vision
ire What
ct i
on
Objectives
Measures
Initiatives
& Targets
2GC
Active
Balanced Scorecard deployment

Balanced Balanced
Success
Scorecard Scorecard
criteria
2GC
Active
“Achieving strategic goals requires activity!”
2GC
Active
Strategic alignment & goal setting
Vision
Vision
Strategy
Strategy
Financial
Outcomes
Activities Outcomes
Profitability,
growth, value
value
Customer
Perspective
Perceptions
Perceptions of:
of: price,
price, service
service quality
quality
Internal
Internal Perspective
Perspective
Activities
Cycle
Cycle time,
time, productivity,
processes
Learning
Learning &
& Growth
Growth Perspective
Perspective
Knowledge
product development
development
2GC
Active
Align existing management control tools with strategy
Budgets SVA & EVA
BEM
Balanced Scorecard
ABC HR Tools
2GC
Active
Support two-way communication of strategy…
BSC
ent
m Un j
ure ust
a s ifie
e
d
m
m s fee d tru
e e dba st
n ch yst ck in i
r e s s ys nfo
En
t t em rmal
Fuzzy objectives s
2GC
Active
Everybody crafts & monitors strategy all the time…
Board level
Scorecard Create /
process amend
strategic
vision
Review results Create/change
Co
n and cause & linked
tio
m
effect strategic
ica
m
assumptions objectives
un
un
m
ica
m
tio
Co
Balanced
n
Scorecard
Operational Support function
Scorecard Scorecard
process Vision Vision process
Develop/revise
Take action measures &
Review Objectives
targets Review Objectives
Balanced Balanced
Scorecard Scorecard
Take action Measures & Take action Measures &

targets targets
Communication
2GC
Active
Success criteria

Balanced Balanced
Success
Scorecard Scorecard
criteria
2GC
Active
Key success factors
Cultural building blocks of Scorecard success
•“Embedding” of management processes to use, refresh

and renew the Balanced Scorecard over time
• Sponsorship and commitment from entire management team -
top management in particular
•Participative management style focused on learning, open discussion
and creative thinking
• Inclusive design process building on consensus seeking & involvement
2GC
Active
Introducing the Balanced Scorecard
To find out more…
•Visit 2GC’s Web Site

– We focus specifically on strategic
control and performance
measurement issues, and have a wide
range of working papers, FAQs, and
presentations to download on these
topics
– The site also has a recommended
reading list that covers relevant
topics, and the “Weblinks” database
of relevant Internet sites
•Contact 2GC
– Let us know if you have a question
you can’t answer, we’ll do what we
can to help…
• info@2gc.co.uk
2GC
Active

(Very Good) 2gc-Introduction of Balanced Scorecard Presentation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

(Very Good) 2gc-Introduction of Balanced Scorecard Presentation

Uploaded by

Copyright:

Available Formats

Introducing the Balanced

2GC 2GC Limited

General What is Balanced

97% 80% 52% 33%

Clear Some Significant

• Almost all organisations have a strategic vision – few manage to realise it

Too many measures and

Unjustified trust in informal

General What is Balanced

•“The idea of the Scorecard is to

What do we want to achieve

Are we doing what we set out

•“Management Control” •“Strategic Control”

•The “objective driven”Balanced

Suc cession plans positions wi ll exist

DB X U nderstan ds an d I H ave awith

D B X has an Excellent C onsum er Franchise

Im plem ent M ajor D eliver E xc ellen t D elive r E xc ellent E ffective C ontrol of

Balanced Balanced Balanced

• Value from first • Corporate strategic • All management

• Business model – divisions • Drive strategic

General What is Balanced

•Best practice is to use a development

•Development of measures follow

•Measures track progress in achieving ObjectivesFinancial Targets Initiatives

• Financial / Market Destination Statement Strategic Linkage Model (SLM)

Description of how the Graphic illustration of “cause and

organisation will be at some effect” relationships between the

management team’s strategies the organisation is to reach its

–Clear and concise description of strategic

General What is Balanced

Corporate Support Function

Regional Cluster Regional Cluster Group Support

Country 1 Country 2 Country 3 Country 4 Shared Service

General What is Balanced

Budgets SVA & EVA

Review results Create/change

Take action Measures & Take action Measures &

General What is Balanced

•“Embedding” of management processes to use, refresh

• Inclusive design process building on consensus seeking & involvement

•Visit 2GC’s Web Site

You might also like