mA

CI
The
The
Balanced
Balanced Company
Company Scorecard
Scorecard
‘‘Translating
Translating Strategy
Strategy Into
Into Action’
Action’

Tristan
Tristan Maynard
Maynard FCMA
FCMAFIMgt
FIMgtAIMC
AIMC

Senior
Senior Partner
Partner

TheBCS
The BCS PPartnersh
artnership
ipLtd
Ltd
The BCS Partnership 1
 Building
Building Future
Future Success
Success
‘‘Navigating
Navigating our
our way
way today
today in
in aa more
more
competitive
competitive environment
environment cannot
cannot be be
accomplished
accomplished merely
merely by
by monitoring
monitoring andand
controlling
controlling financial
financial measures
measures of of past
past
performance.’
performance.’ Robert
Robert Kaplan
Kaplan 1992
1992
What
What You
You Measure
Measure
Is
Is
What
What You
You Get
Get
The BCS Partnership 2
 Building
Building Future
Future Success
Success
In
In The
The Past
Past .. .. .. In
In The
The Future
Future .. .. ..

Efficient
Efficient Use
Efficient Use
Use
Success
Success of
of
of
of
Capital
Capital Assets
Intangible
Intangible Assets
Assets
Assets

 Customers
Customers

 Products
Products RR && DD

 Systems
Systems
The BCS Partnership 
 Employees
Employees 3
 The
The Balanced
Balanced Company
Company Scorecard
Scorecard

 Translation
Translation Of
Of A
A Business
Business Strategy
Strategy


 Linked
Linked Set
Set Of
Of Measures
Measures


 Defining:-
Defining:- ~~ Objectives
Objectives and
and
~~ Mechanisms
Mechanisms
For
For Achieving
Achieving Them
Them

The BCS Partnership 4

 Building
What
What You
Building
You
Measure
Measure
Future
Future
Is
Is Sample
Success
Success
What
What You
You Get
Get

Traditional
Management
Traditional
financial
financial
performance
performance Accounts
measures
measures are
are
insufficient.
insufficient.
The BCS Partnership 5
 The
The Balanced
Balanced Company
Company Scorecard
Scorecard

Four
Four Key
Key Perspectives
Perspectives

 How
How do
do our
our customers
customers see
see us
us ??


 What
What can
can we
we excel
excel at
at ??


 Can
Can we
we improve
improve and
and create
create value
value??


 How
How do
do we
we look
look to
to our
our shareholders
shareholders ??

The BCS Partnership 6

The
The Balanced
Balanced Company
Company Scorecard
Scorecard
Clarify and
Translate the
Strategy

Communicate Balanced Feedback

& Company &
Link Scorecard Learning

Plan
& Set
Targets

The BCS Partnership 7

 The
The Balanced
Balanced Company
Company Scorecard
Scorecard
Financial

Vision Internal
Customer & Processes
Strategy

Learning

The BCS Partnership 8

 Drivers
Drivers Financial ROCE
ROCE
&
&
Customer
CustomerLoyalty
Outcomes
Outcomes Customer Loyalty

Cause
Cause && On-Time
On-Time
Delivery
Delivery
Effect
Effect
Relationship
Relationship
Internal Process
Process Cycle
Cycle
Processes Quality
Quality Time
Time

Learning Employee
EmployeeSkills
Skills

The BCS Partnership 9

 Linking
Linking Cause
Cause and
and Effect
Effect
Profit
Financial
Sales Growth Margin Growth

Customer Value For

Money Relationships
Win/Loss
Rate
Internal Pipeline
Sales
Arrived
Surprises
First
Learning
Marketing Customer
Skills Database
The BCS Partnership 10
 The
The Balanced
Balanced Company
Company Scorecard
Scorecard
Translate A Strategy Into Operational Terms
Objectives Target Measures Initiatives
Customers
Customers
To
Toachieve
achieveour
our 1 Action
vision,
vision,how
how
should
2 Action
shouldweweappear
appear
to
toour
ourcustomers?
customers? 3 Action

Objectives
Targets
Measures
The BCS Partnership Initiatives 11
 Leading
Leading and
and Lagging
Lagging Indicators
Indicators

Initiative Driver Outcome

Tactic Lead Indicator Lag Indicator

Product R & D New Products % Market Share

Customer Events Satisfaction Survey Cust. Retention

Order System Confirmations Complaints

Skill Training Job Coverage % Sales / Employee

Enablers
The BCSEnablers
Competencies
Competencies Technology
Technology Culture
Culture
Partnership 12
 Managing
Managing The
The Business
Business Strategy
Strategy

Strategic Q1 Q2 Q3 Q4
Management

Identify Strategic Issues

Operating Execute Plan / Budget

Management

MMM MMM MMM MMM

The BCS P
Partnership
artnership 13
 New
New Strategy
Strategy Survey
Survey Employees
Employees

Heard
Heard Tried
Tried Believe
Believe Champion
Champion
Of
Of ItIt ItIt ItIt ItIt

Executive
Executive

Managers
Managers

Superv.
Superv.

Workers
Workers
Degree
DegreeOf
Of Culture
CultureShift
Shift
The BCS Partnership 14
 •• Case
Case Study
Study 11 -- ‘L’
‘L’ Ltd
Ltd
Top Struggling
Struggling For
For Sales
Sales
Top 20
20 Customers
Customers

32%
32% Last
Last Year’s
Year’s == Lost
Lost Objectives
Objectives
-- £650,000
£650,000 
 200
200Customers
Customers


 8%
8%Sales
SalesGrowth
Growth
37%
37% This
This Year’s
Year’s == New
New
++ £500,000
£500,000 
 £200k
£200k Wkg.
Wkg. Capital
Capital


 Best
BestIn
In North
North
== Customer
CustomerRetention
Retention Problem
Problem

Sales
Sales‘Plan’
‘Plan’
The BCS Partnership 2,000
2,000Mail-Shot
Mail-Shot
15
 •• Case
Case Study
Study 11 -- ‘L’
‘L’ Ltd
Ltd
Company
Company Scorecard
Scorecard
Customer
CustomerPerspective
Perspective Actual
Actual Target
Target
New
New£20k
£20kCustomers
Customers 55 Lead
Lead
%
%Customers
CustomersRetained
Retained 90%
90% Lag
Lag
No.
No. Lost
Lost 12
12 Lead
Lead
Pipe-Line
Pipe-LineOrders
Orders £150K
£150K Lead
Lead

Customer
CustomerVisits
Visits 10
10Mth
Mth Lead
Lead

Financial
FinancialPerspective
Perspective
60
60Day
DayDebtors
Debtors £0k
£0k Lag
Lag
30
30Day
DayDebtors
Debtors £20k
£20k Lead
Lead
The BCS Partnership 16
 The
The Balanced
Balanced
Scorecard
Scorecard • Case Study 2
British
British Waterways
Waterways
Strategy
Strategy
&
&
Links
Links

( This One Is A Lot Harder ! )

The BCS Partnership 17

 The
The Balanced
Balanced • Case Study 2
Scorecard
Scorecard British
British Waterways
Waterways
To Meet
Strategy
Strategy Public
&
& Expectations
Links
Links

To Achieve To Satisfy
Vision Customers
Financial
& & Value
Security
Strategy For Money

To Operate
To Employ
Excellent
Effective
Business
People
The BCS Partnership Processes
18
 The
The Balanced
Balanced PUBLIC Public Satisfaction
EXPECTATIONS
Break Even

Scorecard
Scorecard FINANCIAL
Reduced Gov't Funds

External Income 3rd Party Funds Trust Income

• Case Study 2 Operating

Expenditure
Satisfaction

British
British Waterways
Waterways CUSTOMERS
New Products
Existing Growth

Visits

Scorecard
Scorecard Map
Map PROCESSES
Identify Wants Awareness Publicity

Environment Standards
Safety
Reduced Backlogs

Project Management

Inspection

Effectiveness
Reduced Turnover
EMPLOYEES
Reduced Absence
Learning & Growth
Employee Satisfaction
Skills Training

The BCS Partnership Skills Assessment 19

Personal Development Plans
 The
The Balanced
Balanced PUBLIC Public Satisfaction
EXPECTATIONS
Break Even

Scorecard
Scorecard FINANCIAL
Reduced Gov't Funds

External Income 3rd Party Funds Trust Income

• Case Study 2 Operating

Expenditure
Satisfaction

British
British Waterways
Waterways CUSTOMERS
New Products
Existing Growth

Visits

Scorecard
Scorecard Map
Map PROCESSES
Identify Wants Awareness Publicity

Environment Standards
Safety
Reduced Backlogs

Project Management

Inspection

Effectiveness
Reduced Turnover
EMPLOYEES
Reduced Absence
Learning & Growth
Employee Satisfaction
Skills Training

The BCS Partnership Skills Assessment 20

Personal Development Plans
 The Balanced Scorecard • Case Study 2
British
British Waterways
Waterways
Customer Perspective Scorecard
Satisfied Customers
Objective Measure Actual Target Perf.
/ Goal
Meet Customer 98 % 98 % 1 00 % Lag
Needs Satisfaction
Expand No. New Products 2 4 50 % Lead
Mix
Improve % Compliance 95 % 98 % 96 % Lead
Quality
Better No. Visits 16 0 m 1 7 0 m 94 % Lag
Facilities
Total Score 89%
The BCS Partnership 21
 The
The Balanced
Balanced • Case Study 2
Scorecard
Scorecard British
British Waterways
Waterways
Perspective Score Weighted
Weight Score
Weighted
Weighted
Scorecard Public Perception 90 % 2 27 %
Scorecard
Financial Perspective 10 0 % 3 30 %

Customers 89 % 1 9%

Business Processes 90 % 2 18 %

Employees 90 % 2 18 %

Total Score 90%

The BCS Partnership 22
 In Conclusion


 BCS
BCS Offers
Offers Wider
Wider View
View


 Links
Links Actions
Actions To
To Strategy
Strategy


 Values
Values Intangible
Intangible Assets
Assets


 Measure
Measure Performance
Performance Drivers
Drivers


 Changes
Changes How
How Organisation
Organisation Thinks
Thinks &
& Acts
Acts

The BCS Partnership 23

 The
The Balanced
Balanced M M A Ltd
MODEL TRADING ACCOUNT

Period No. XX.98 Ending XX.98

Scorecard
Scorecard
This Month
Actual
£000's
Budget
£000's
Act.
%
Budg.
Cumulative
Actual
£000's
Budget
£000's
Act.
%
Budg.

SALES 1,470 1,527 96.3% 3,001 3,250 92.3%

Raw Materials 502 563 89.2% 1,050 1,150 91.3%

Gross Profit 968 964 100.4% 1,951 2,100 92.9%

Clear
Clear
Gross Profit % Sales

Wages & Salaries

65.9%

400
63.1%

420 95.2%
65.0%

809
64.6%

860 94.1%

Focused
Focused Carriage 54 55 98.2% 130 110 118.2%

Reporting
Reporting
Overheads

Operating Profit
342

171
335 102.1%

153 111.7%
752

259
780

349
96.4%

74.2%
Optg. Prof it % Sales 11.7% 10.0% 8.6% 10.7%

Interest (Paid) (15) (16) 93.8% (30) (44) 68.2%

Other Income 10 10 100.0% 20 20 100.0%

Combining Net Profit 166 147 112.9% 249 325 76.6%

The Scorecard No. Employees

Units Sold
255

3,050
256

3,100
99.6%

98.4% 6,050 6,200 97.6%

With Public Perception

Financial Perspective
90%

100%
100%

100% 100.0%
90.0%

Traditional Satisfied Customers

Business Processes
89%

90%
100%

100%
89.0%

90.0%

Accounts
Employees 90% 100% 90.0%

Managing Directors Comments:-

The BCS Partnership 24

 The
The
Balanced
Balanced Company
Company Scorecard
Scorecard
‘‘Translating
Translating Strategy
Strategy Into
Into Action’
Action’

Tristan
Tristan Maynard
Maynard FCMA
FCMAFIMgt
FIMgtAIMC
AIMC

Senior
Senior Partner
Partner

TheBCS
The BCS PPartnersh
artnership
ipLtd
Ltd
The BCS Partnership End 25
 The
The Balanced
Balanced Company
Company Scorecard
Scorecard

Questions
&
Discussion

The BCS Partnership 26 End

This Is The