HBR Article Study

Using the Balanced

Scorecard as a Strategic
Managementr System
 Presented to
HBR Article Study

Presented by
Raiysa Zuwairiyah (RH-08)
Tahsin Hasan (RH-42)
Tousif Izaz (ZR-64)
Khondakar Shadman Shakib (ZR-66)
Niloy Barua (ZR-94)
Mukarram Khan (ZR-118)
 Theoretical Concept

What is a Balanced Scorecard?

The term balanced scorecard (BSC) refers to a

strategic management performance metric used to
identify and improve various internal business
functions and their resulting external outcomes
Theoretical Concept
Why is the Balanced Scorecard better than traditional
methods of financial performance measurement?
Companies fail to align short term
goals with long term vision

No available framework to integrate

intangible assets into the decision
making process
Fails to keep up with the new
age of information

Traditional Methods
 Theoretical Concept
Why is the Balanced Scorecard better than traditional
methods of financial performance measurement?
Financial Perspective

Customer Learning
Perspective and Growth

Internal Business Process

Four Perspectives
Theoretical Concept

Using the Balanced Scorecard as a Strategic Management System

Translating
the Vision
Communicating
and Linking

Balanced
Scorecard

Feedback
and Learning
Business
Planning
 Translating the Vision

5% increase in revenue,
by the year-end

Increase Cut down cost Improve Customer Launch new

price Service products with high
profit margin
 Translating the Vision

Goal for Translating the Vision

To reach a consensus among the senior

management and then to translate their
vision into terms that had meaning to the
people who would realize the vision
Translating the Vision
Communicating and Linking

63%

of employees do not have

a clear understanding of
the company vision
 Theoretical Concept

Elena Bajic,
Founder and CEO of Ivy Exec. (Forbes, 2017)
“I sometimes envision running my company like a
conductor leads an orchestra. If I can write a score
for each section and show them how to effectively
play their part while blending with the others, then
truly beautiful music can be made.”
Communicating and Linking

Communicate to Link these objectives to

middle managers incentive compensation

Development of Establish individual

business unit scorecards performance objectives

Create room for accountability

and feedback to the board of
directors and senior executives
Communicating
and Linking
 Learning and
Translating the Vision Feedback
Communicating and Linking

Business planning Strength

Holistic involvement of all
layers of management.

Failure?
Accounting for Unpredictability

Actions Results

Single Loop Learning

 Learning and
Translating the Vision
Feedback
Communicating and Linking

Business planning

Strength
Accounts for Unpredictability.
Learning and Feedback

Assumptions Actions Results

Single Loop Learning

Double Loop Learning

 Learning and
Rockwater Feedback

The Vision Strategy Perspective

Services that surpass
As our customer’s needs Financial
preferred provider,
we shall be the Customer Satisfaction
industry leader. This Customer
is our mission. Continuous
improvement
Internal
Quality of Employees

Shareholder
Expectations Growth
 Criticism of the BSC as a
Strategic Management System
Advantages of the BSC

Provides a visual Software automation

picture of the strategy Properly explained makes things easier
Cascading & Alignment

Easy Data Collection Easy to get trained

& Strategy Reporting in the concept
 Criticism of the BSC as a
Strategic Management System
Disadvantages of the BSC

No Focus on
Strategy Map / KPIs
External Factors and
Lack of Time are Hard to Maintain
Competitors
Dimension

The Choice of Indicators

Lack of Risk Analysis
is not Validated
How to use the Balanced Scorecard most effectively
Common Mistake: Just slotting goals

Lower cost Internal Process efficiency

Financials
Increase revenue Processes Faster Output

Balanced
Scorecard

Lower wait time Improve skills

Learning
Customers
Better retention & Growth Improve tools
How to use the Balanced Scorecard most effectively
Proper Implementation

Financials Lower cost Increase revenue

Lower wait time Better retention

Customers
Process efficiency Faster Output

Internal
Processes Improve skills Improve tools

Learning
& Growth
 Our Recommendations

Draw connections between all

Focus on the Leading steps
the targets for a clear
initially, Lagging steps later on
understanding
 Thank You !
Any Questions ?