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Introduction
Overview & Examples
The BSC concept
The Balanced Scorecard’s (BSC) fundamental premise is
that measurement motivates behaviour
“What you
“What you
measure is
measure is what
what
you get”
you get”
“It’s not
“It’s not what
what “If you
“If you can
can
you
you measure it,
measure it, you
you
expect …
expect … it’s
it’s can manage
can manage it”
it”
what you
what you
inspect”
inspect”
-3-
The scorecard differs substantially from traditional
measurement approaches
– Organisational learning.
– Business processes.
-4-
A Good Balanced Scorecard will “Tell the story” of your
strategy
Criteria
Criteria For
For A
A Good
Good Balanced
Balanced Scorecard
Scorecard
✔ Cause
✔ Cause and
and Effect
Effect Relationships:
Relationships:
•• Every
Every measure
measure should
should bebe part
part of
of aa “cause
“cause and
and effect”
effect”
chain
chain to
to determine
determine ifif the
the measures
measures correctly
correctly represents
represents
and
and drives
drives the
the strategy.
strategy.
Company
Strategy ✔ Linked
✔ Linked to
to Financials:
Financials:
Vision •• Every
Every measure
measure selected
selected should
should ultimately
ultimately Drive
Drive
Performance.
Performance.
•• Focus
Focus on
on factors
factors that
that create
create long-term
long-term value.
value.
•• AA balance
balance of
of lead
lead and
and lag
lag indicators:
indicators:
As-Is
✔ Measures
✔ Measures that
that Create
Create Change:
Change:
•• Measures
Measures must
must cause
cause the
the organisation
organisation to
to change
change its
its
behaviour in some way.
behaviour in some way.
-5-
The Balanced Scoreboard creates a strategic framework
for action
• The strategy is the reference point for the
entire management process.
• The shared vision is the foundation for
strategic learning.
Clarifying
Clarifyingand
and
Translating
Translatingthe
the
Vision
Visionand
and
Strategy
Strategy
Strategic
Strategic
Communication
Communication Balanced Feedback
and Feedbackand
and
andLinking
Linking Scoreboard Learning
Learning
-7-
For each of the four dimensions, objectives, measures and
targets are explicitly defined
Financial / Shareholder
Objectives Measures Targets
Vision
-8-
The linkage between the four dimensions is crucial in
ensuring long-term success
Shareholder
Shareholder
Value
Value
-9-
Alignment through the organisation will be achieved by
cascading the scorecard
Shareholder / Parent /
Requirements
Financial
Learning Individual
& Innovation
Scorecards
Financial
Financial
Business Unit or Customers
Vision
Internal
Departmental Customers
Vision
Internal
& Partners Processes
& Partners Processes
Scorecards Learning
& Innovation
Learning
& Innovation
Financial
Customers Internal
Vision
& Partners Processes
Learning
& Innovation
- 10 -
When implemented well, the benefits of Balanced
Scorecard can be significant
Focus
Focus
• Senior executives are focused and aligned around a small
number of critical objectives and success measures.
Continuous
Continuous • The BSC implementation establishes a strategic feedback /
Improvement
Improvement monitoring system that drives actions to excel in critical
performance indicators
- 11 -
The BSC Process
Balanced Scorecard design is only a component of the
overall process
Scorecard Design Scorecard Implementation / Roll-out
Corporate/Shareholder
input where relevant
Review/
Incorporate refine score-
Determine scorecard card on a
Develop Develop & Manage Align/plan
Strategic baselines review as key regular basis
& finalise finalise business initiatives
Intent and set item in in conjunc-
Objectives Measures according to according to
targets business tion with
scorecard scorecard strategy
management
meetings review
process
Manage BU,
Develop and
section etc. Review &
implement Ensure
according refine on
BU and scorecard
to an ongoing
section alignment
scorecard basis
scorecards
format
Feedback to high level scorecard to
ensure alignment
- 13 -
The Business Management Process (BMP) implements the
Balanced Scorecard in a Plan-Do-Review Cycle
Link to Higher Level BSC Review Link to Higher Level BMP / Report
Review
BSC
BSC
Financial
Financial
Customers
Customers Internal
• Take Action:
and Internal
and Processes – Initiatives
Partners Processes
Partners
– Plans
Learning
Learning
and
and
– Budgets
Innovation
Innovation • Plan-Do-Review
session
✓ Objectives
✓ • Determine Root
Causes for Variances
✓ Measures
✓
• Define Action
✓ Targets
✓ Steps
• Measure Actuals
against Targets PDR
PDR Session
Session
- 14 -
What makes a good Objective or
Measure
We need to have clear and communicated definitions of the
BSC components
• Objective:
– Statement that defines what we must do to achieve the vision.
– Linked to our strategy.
• Measure:
– A numeric indicator that will indicate successful achievement of the objective.
• Lead indicator – Indicates the likelihood of change (forward looking).
• Lag indicator – Indicate that change has occurred (backward looking).
• Target:
– Value of the measure that we would like to achieve in a given time frame.
– Must be achievable.
- 16 -
A “Good” Balanced Scorecard includes objectives,
measurements and targets that promote change
Example:
Business
Business
Perspective
Perspective Measurements
Measurements Targets
Targets Accountabilities
Accountabilities
Objectives
Objectives
• Shareholder value • % dividend growth • CPI + X% annually • Finance Director
• CEO
• Profit • Operating Margin • Top quartile • Business
Financial
Financial Development
• New revenue • Revenue from new • 25% in three years Manager
services
• Differentiation • Target market-share • Number one • Marketing Director
• Business
• Strategic alliances • Profits from alliances • $M in five years Development
Customer
Customer Manager
• Customer service • Customer satisfaction • Number one customer • Marketing Director
rating
......and
andclear
clearaccountabilities
accountabilitiesto
toensure
ensureownership.
ownership.
- 17 -
The objectives define what the organisation must do to
achieve the vision
• Action orientated:
– Start statement with a verb.
• Measurable:
– there must be a manner in which we can determine success in achieving the objective:
- 18 -
Measures must be the key indicators that register
achievement of the objective
- 19 -
Targets must be set for each measure, and define goals for
the organisation to achieve
• Must be achievable.
The
Theobjectives,
objectives,measures,
measures,targets
targetsand
andaccountabilities
accountabilitiesneed
needto
tobe
bedefined
definedat
atall
all
levels of the organisation.
levels of the organisation.
- 20 -
For each objective and measure we will develop a precise
definition . . .
Objective: EX
Effectively
AM
Effectively Manage
Manage ValueValue Adding
Adding Processes:
Processes: PL
Be
Be the
thelow
lowcost
cost provider
providerof
of products
products and
and services
services by
byachieving
achieving competitive
competitive excellence
excellencein
inall
allour
our business
businessprocesses.
processes. E
Priority:
Priority: Measure:
Measure:
•• Effectively
EffectivelyManage
ManageValue
Value Adding
Adding Processes
Processes Cost
Cost excellence
excellence rating
rating
Formula:
Formula: Formula
Formula Notes:
Notes:
•• Weighted
Weighted ranking
ranking of
of total
totalunit
unit cost
cost of
of production
production++ plant
plant •• AA weighted
weightedindex
index that
that gives
gives aaquartile
quartile performance
performance cost cost
reliability index + total staffing index + computerised
reliability index + total staffing index + computerised excellence
excellence position. Weightings to reflect their importanceto
position. Weightings to reflect their importance to
instrumentation
instrumentation index
index ++total
totalmaintenance
maintenance ++sustaining
sustaining each
eachbusiness.
business.
capital index.
capital index. •• Categories
Categories are
are1st
1st to
to 4th
4th quartile
quartile
•• Rankings,
Rankings, as defined byexternal
as defined by externalconsultants
consultants atat least
least every
every
other
otheryear,
year, but
but done
done yearly
yearly
•• AA comparative
comparative group
group isisdefined
defined
•• Formula
Formula to be definedby
to be defined bytype
type of
of plant
plant relevant
relevant to
to their
their
business
business need and value proposition. Weightings may
need and value proposition. Weightings may shift
shift
over
overtime.
time.
Source:
Source: Update
Update Frequency:
Frequency:
•• Site
Site Leadership
Leadership •• Annual
Annual
Action
Action to
to Implement:
Implement:
•• Use
Use blend
blend of
of industry
industry studies
studies (e.g.,
(e.g., Solomon,
Solomon, Mastio,
Mastio, Chem
ChemSystems,
Systems, Townsend),
Townsend), and
and analysis
analysis of
of one-on-one
one-on-onecomparisons
comparisonsvs.
vs.
leaders.
leaders.
•• May
May also
alsouse
usesimplified
simplifiedbenchmarks
benchmarksand andmodels,
models, as
as appropriate.
appropriate.
- 21 -
. . . and an approach to setting targets
Objective: EX
Effectively
AM
Effectively Manage
Manage Value
Value Adding
Adding Processes:
Processes: PL
Be
Bethe
the low
lowcost
cost provider
providerof
ofproducts
productsand
andservices
servicesby
byachieving
achieving competitive
competitiveexcellence
excellence in
in all
allour
ourbusiness
businessprocesses.
processes. E
Frequency
Frequencyof
ofMeaningful
MeaningfulUpdate
Update
Perspective:
Perspective: Internal
Internalprocesses
processes Monthly
Measure: Cost ¦ Monthly
Measure: Costexcellence
excellencerating
rating Annually
Annually
Quarterly
Quarterly
Measurement
Measurementdefinition/formula
definition/formula(See(Seealso
alsoMeasurement
MeasurementProfile):
Profile):
Weighted
Weighted ranking of total unit cost of production++plant
ranking of total unit cost of production plantreliability
reliabilityindex
index++total
totalstaffing
staffingindex
index++computerised
computerisedinstrumentation
instrumentationindex
index++
total maintenance + sustaining capital index.
total maintenance + sustaining capital index.
Approach
Approachto tosetting
settingtargets
targetsand/or
and/ordeveloping
developingmeasure
measure[If [Iftargets
targetsexist,
exist,identify
identifysource]:
source]:
Target
Target is to be top quartile. Sites (types of plants) will need to select the key variables,weight
is to be top quartile. Sites (types of plants) will need to select the key variables, weightthem,
them,and
andchoose
chooseaasuitable
suitableexternal
external
benchmarking methodology. Recommendations need to be agreed by business teams and
benchmarking methodology. Recommendations need to be agreed by business teams and leadership team leadership team
Target
Targetsetting
settingresponsibility:
responsibility: Accountability
Accountabilityfor
forresults:
results: Tracking/reporting
Tracking/reporting Completion
Completiondate:
date:
Manufacturing
Manufacturingleadership/SBU
leadership/SBU Manufacturing leadership
Manufacturing leadership responsibility:
responsibility: 1995
1995(some
(somecould
couldbe
beready
readyby
by
Site
Siteleadership
leadership January)
January)
Linkage
Linkageto
toBusinesses:
Businesses: Linkage
Linkageto toBT
BTStreams
Streams/ /Initiatives:
Initiatives:
Through
Through businessteams,
business teams,aligned
alignedwith
withSBU
SBUstrategy
strategy Manufacturing
Manufacturing
Capital
Capitalinvestment
investmentexcellence
excellence
Supply chain
Supply chain
- 22 -
Example Objectives and Measures
Generally, BSC objectives focus around key themes in each
of the four areas
Financial/Shareholder
Themes
• Shareholder value.
• ROI.
• Profitability.
• Turnover/Revenue.
Customers & Partners
Internal Process Themes
Themes
• Retention. • Low costs.
• Production efficiency.
• Satisfaction. Vision • Quality:
– ISO compliance.
• Value-added to customers. • Safety.
• Production volume.
Learning & Innovation • Environment.
• Process effectiveness.
Themes
• Attract, retain and motivate
employees.
• Clarify and communicate Roles
and Responsibility.
• Building skills.
• Manage resources (leadership).
• Knowledge management.
- 24 -
The Balanced Scorecard should contain a balance of lead and lag
indicators
Measures
Objectives Lag Indicators Lead Indicators
(Core Outcome Measures) (Performance Drivers)
F1 Meet shareholder ➪ Return on Equity
Financial
- 25 -
Objectives, measures and targets at each level have to be
aligned top-down and bottom-up
Strategic Sample Target
Business for Specific
PLAN Objective Time Window
Example:
Example: Car
Car From To
Manufacturer
Manufacturer Reduce overall
DIRECTOR ACTUAL cycle time from 48 44
73 to 28 days days days
PLAN
PLAN
Reduce team
TEAM LEADER cycle time from 21 19
ACTUAL
30 to 11 hours hours hours
- 26 -
Measures should be cascaded as with this railway utility
%
% trains
trains Trains Trains
Trains in
in
• Department Managers available
available
Trains
rejected
rejected by
by wrong
wrong
right
right formed
formed operations
operations location
location
%
% trains
trains
• Section Managers %% trains
trains
operational
operational
pending
pending
wheel
wheel sets
sets
• Work Group, %
% wheel
wheel sets
sets Wheel
Wheel lathe
lathe
Supervisors and Staff to
to plan
plan downtime
downtime
- 27 -
Example BSC : TelcoSupp.
TelcoSupp’s vision is to be the most successful local
telecommunications solutions provider
- 29 -
The TelcoSupp’s BSC objectives were designed to
support the Vision
Financial / Shareholder
• Deliver sustainable growth in
profitability.
Business Partners • Maximise shareholder value.
• Ensure financial independence by
Customer: funding future growth and
Internal
• Increase market share. initiatives internally.
• Broaden customer base.
• Improve service quality to exceed • Be the industry benchmark by any
customer expectations. measure.
• Build long term customer
partnerships.
Vision
Vision • Invest in the right projects to
ensure our future
Alliances: • Become a centre of competence.
• Pursue alliances to enable us in our •
market Develop a balanced relationship
Suppliers: Organisational Learning with the parent company.
AAmeasurement
measurementsystem
systemwill
willassess
assessprogress
progresstowards
towardsthe
theobjectives.
objectives.
- 30 -
Comments on TelcoSupp’s BSC
Balanced Scorecard Comments
Benefits Concerns
- 31 -
TelcoSupp’s BSC measures and accountabilities
Financial
Objectives Agreed Measure(s) Accountability
• Deliver sustainable • Operative profit on turnover.
growth in profitability Financial Director
• ROCE.
• Maximise shareholder • EVA. Financial Director
value.
• Ensure financial • Cash flow
independence by funding Financial Director
future growth and
initiatives internally.
Business Partners
Objectives Agreed Measure Accountability
• Increase market share. • Market Share Index (aggregate segments) Marketing Director
Customers
• Broaden customer base. • Number of customers contributing >5% of turnover over total Marketing Director
customers
• Improve service quality to
exceed customer expectations. • Customers’ supplier evaluations.
Marketing Director
• Build long term customer • Customer surveys (includes a preferred supplier assessment.)
partnerships.
Comm- Supp- Allian-
• Pursue strategic alliances to • Market share in specific business segments (as measured in Marketing Director
uniry liers ces
- 32 -
TelcoSupp’s BSC measures and accountabilities
(cont.)
Internal
Objectives Agreed Measure Executive Accountability
• Invest in the right projects to • Net present value of all project business cases to be CEO
ensure our future implemented
• Become a Centre of Competence. • Number of significant centres of competence. CEO
Marketing Director
Organisational Learning
Objectives Agreed Measure Executive Accountability
• Attract and retain appropriate • Staff turnover
HR Director
skills. • Number of unfilled positions
• Develop a learning culture. HR Director
• Training and education expenditure as % of payroll.
• Communicate effectively. • Refer to Quality Measurement System. HR Director
- 33 -
Example BSC : ChemCo
ChemCo needed a strategy to manage a diverse portfolio in
a highly cyclical market
- 35 -
ChemCo's Balanced Scorecard translated the firm’s
strategy into strategic objectives across five perspectives
Developaa
Develop
Learning
Learning
Employee Organisation
Organisation
Learning & Createaa
Create
Growth Climatefor
Climate for
Results
Results
Striveto
to
Internal Strive
Continuous
Continuous
Champion
Champion
Responsible
FosterProduct
Foster Product
ManageValue
Value Responsible Stewardship
Stewardship
Enhancement
Processes Enhancement Manage
AddingProcess
Adding Process
Care
Care
Effectively
Effectively
Focuson
Focus on Demonstrate
Demonstrate
Margin Community
Society Margin
Enhancement
Enhancement
Community
Leadership
Leadership
Provide
Provide
Customer
Customer
Customer Value
Value DevelopTotal
Develop Total
Business
Business
Relationships
Relationships
BuildFinancial
Financial Achieve
Achieve
Build
Shareholder Strength
Strength
Profitable
Profitable
Growth
Growth
Deliver
Deliver
Resultsto
Results to
Shareholder
Shareholder
- 36 -
Comments on ChemCo’s BSC
Benefits Concerns
- 37 -
The objectives were translated into into a set of key
strategic measures
Strategic Priority Definition Employee Learning & Growth Perspective Measures
E1 Create a Climate for • Develop and use our leadership to empower and gain commitment from all employees thus ❏ Leadership effectiveness
Employee Results achieving exceptional business results. survey rating
communications
Learning ❏ Employee satisfaction
and Growth E2 Develop a Learning
Organisation
• Improve our skills and knowledge by developing people and adapting best practices found within
ChemCo and from external sources to realise all of our priorities.
❏ Best practices identified
❏ Employee contribution
Society Perspective
S1 Champion Responsible • Be a leader in our industry by our achievements in safety, health, environment and risk ❏ Safety,health, environment & risk
Society S2
Care
Demonstrate Community
management.
• Qualify as an industry leader by developing mutually supportive relationships with the
results.
❏ Community opinion rating
Leadership communities in which we conduct business.
S3 Foster Product • Integrate health, safety, environment, economic, and ethical considerations at every stage in the ❏ Product stewardship participation
Stewardship life cycle of our products.
Customer Perspective
C1 Provide Customer Value • Provide superior value to our customers by supplying them with products and services that ❏ Customer satisfaction index
meet their needs (total value package).
Customer C2 Develop Total Business • Form relationships with customers which allow us to fully understand and address their needs. ❏ Retention of targeted customers
Relationships
Shareholder Perspective
SH1 Deliver Results to • Manage our businesses to achieve the returns expected by shareholders. ❏ Return on capital employed
Shareholders ❏ Economic value added
Shareholder SH2 Build Financial Strength • Manage our business so that we are cash positive and able to meet capital funding requirements ❏ Net cash flow
to sustain ChemCo through the business cycle.
SH3 Achieve Profitable Growth • Achieve increased size in our business to provide increased value to shareholders. ❏ Total revenue
- 38 -
Example BSC: ManCo
ManCo required a tool to focus and align the organisation
- 40 -
Accountability and targets are seen as key components of
ManCo’s BSC
Shareholder / Financial Customer
KPI (Area) A Target Comments KPI (Area) A Target Comments
Return on Net PBIT/ Net Customer %
Assets assets (Qtr) satisfaction Conformance
to agreed
index
offering per
Profit after tax Actual vs customer.
target (Mth)
(Qtr)
4 -12 months
Cash flow projection
Product Mix % Adherence
(Mth) to Target Mix
Optimisation
Unit cost Total Cost per (Mth)
ton of product
(Mth)
People
KPI (Area) A Target Comments
Employee Index : Leadership values,Job
satisfaction / satisfaction and Development
climate window Productivity (Qtr)
Affirmative AA spectrum % (Qtr)
Action
Growth / Learning Internal Processes
KPI (Area) A Target Comments KPI (Area) A Target Comments
NPV of Process efficiency Ton marketable
Value created new and product per gigajoule
by Project developing
(Mth)
Portfolio projects at 22% Environment Index: releases,
discount rate resource
(WACC) vs consumptions, re-
target NPV (Qtr) mediation &
compliance (Mth)
Benefits Concerns
• Two years after introduction the BSC • After two years, executives consider
remain the key focus/management fifteen objectives/measures too many
tool for the executive committee. to focus on simultaneously.
- 42 -
Example BSC: OilCo
OilCo need to address internal soft issues
- 44 -
BSC of a large downstream Oil Company
Financial / Shareholder Objectives
• Maximise shareholder value.
Benefits Concerns
- 46 -
OilCo designs measures and assigned accountability for all
their objectives
Learning and Innovation
Objective Measures Accountable
Person
• Ensure effective performance 1) Employees with development plans (lead) HR Director
management 2) Level of acceptance of merit appraisal system (lag)
3) Percentage of employees receiving quarterly
performance reviews (lead)
4) Level of belief that performance drives reward and
recognition (lag)
• Increase diversity in the 1) Staff mix (lag) CEO
workforce
2) Diversity awareness / attitude (lag)
• Empower our employees 1) Employee belief that they are empowered (lag) Operations Director
• Add significant value to 1) Number of value adding plans for top 20% of customers Marketing director
customers (lead)
- 47 -
OilCo designs measures and assigned accountability for all
their objectives
Internal Processes
Objective Measures Accountable Person
• Ensure clear roles, responsibilities and 1) Percentage of employees with agreed performance charters (lead) Operations director
accountabilities for all our 2) Degree to which employees believe that their roles, responsibilities and
people accountabilities
are clearly defined (lag)
• Mobilise the organisation towards the 1) Percentage of employees who attended a Vision / Mission roll-out session
vision (lead) HR director
2) Percentage of monthly business meetings where Vision / Mission is a fixed
agenda item and is discussed (lead)
3) Employee belief that OilCo is adhering to its stated value system (lag)
4) Percentage of employees responding “Yes” to vision / mission understanding
and acceptance (lag)
• Ensure strategic advantage 1) Return on total cost of ownership as an investment indicator IT director
through IT (lag)
Financial / Shareholder
Objective Measures Accountable Person
• Maximise shareholder value 1) E.V.A. CEO
• Real growth in operating profit with 1) Real annual growth in operating profit CEO
a long term objective of 10%
• Keep unit cost increase below 1) Increase in unit cost / vs. CPI. CFO
inflation
- 48 -
Example BSC: Aluminum Smelter
Aluminium Smelter introduced a BSC concept to monitor
the progress of their “STAR” project
- 50 -
The management team BSC is displayed in a dashboard
format
• External
environmental
Potline
Potline
internal
internal index.
env’t
env’t
Performance
Performance ofof
Retrofitted Unit
Unit cost
cost
Retrofitted (added
pots (added
pots values)
Net
Net
values) • Environmental
shareholder
shareholder Product/
Product/ permit
value
value process
process exceedances.
dev’t
dev’t
Accident
Accident
rate
rate
• Sickness rate.
Performance
Performance
against Profit
Profit
against
STAR
STAR
deliverables
deliverables Current
Current
efficiency
• Potline output.
efficiency
Rate
Rate
of
of
return
return • Saleable output.
- 51 -
Comments on Aluminium Smelters BSC
Balanced Scorecard Comments
Benefits Concerns
• The dashboard format indicates • Lack of balance in the scorecard:
importance of each measure: – Little focus on ‘customers’ and ‘innovation and
– Large indicators represent key measures. learning’.
– Small indicators represent secondary measures. – Little need for customer focus as most product
sold to shareholder.
– Bullet points indicate “warning lights”.
Notice only when warning light flashes. – Focus on financial measures, as these are key for
long term survival.
• Focus on few key themes.
• Significant detail was developed for
each theme.
- 52 -
Lessons Learned
The BSC must be driven from the top
- 54 -
The final BSC must focus on the few key objectives
required to achieve the strategy
• Ensure the objective for the high level scorecard are strategic in nature, and
crucials for all departments.
– Operational or department specific objectives must be moved to departmental scorecards.
- 55 -
Successful BSC development will depend in placing objectives
and measures at the correct level in the BSC structure
Financial
Learning
& Innovation
Most
Mostof
ofHillside’s
Hillside’spresent
presentKPA
KPAare
aredepartmental
departmentalmeasures.
measures.
- 56 -
Two factors drive the need for objectives in the high level
BSC
Together they
determine
requirements for
the objectives in
the high level
scorecard.
Potential
Potentialobjectives
objectivescan
canbe
beassessed
assessedagainst
againstthese
thesetwo
twodimensions.
dimensions.
- 57 -
The high level scorecard must focus on strategic issues
which integrate across several departments
High
The needs for strategic integration
O
th bje
e c
sc hig tive
or h s
ec le f o
ar ve r
d l
Objectives for
departmental
scorecards
Low
The needs for operational integration High
- 58 -
There are many potential pitfalls to successful
implementation
Scorecard Design Scorecard Implementation / Roll-out
Corporate/Shareholder
input where relevant
Review/
Incorporate refine score-
Determine scorecard card on a
Develop Develop & Manage Align/plan
Strategic baselines review as key regular basis
& finalise finalise business initiatives
Intent and set item in in conjunc-
Objectives Measures according to according to
targets business tion with
management Scorecardscorecard
scorecard strategy
meetings not used as reviewReview
Inappropriate Measures not Targets too business process
process
strategy aligned to soft or management/ inadequate
objectives ambitious focus tool or poorly
Communicate Scorecard to organisation timed
Scorecard not
communicated
Manage BU,
Develop and
section etc. Review &
implement Ensure
according refine on
BU and scorecard
to an ongoing
section alignment
Poor scorecard basis
scorecards
alignment format
Feedback to high level scorecard to between
Feedback not ensure alignment levels
taken into
account Cascade scorecard to individual level.
To ensure individual focus and
alignment.
- 59 -
Poor BSC design and implementation can lead to a
multitude of problems
Strategic Intent Measurement
• Industry generic, not strategic. • Too many measures.
• Perspectives “unintegrated”. • Unrealistic, unrepeatable.
• What customer values not defined. • Activities instead of measures.
• Missing internal, operational link. • Misleading.
• Levels in organisation not distinguished. • All financial.
Process Philosophy
• No executive consensus - not top down. • Control, not communication.
• Roll out before completion. • Strategic report vs. strategic agenda.
• Tie to incentives too quickly. • Strategic planning vs. improvisation.
• Too many people, too long.
• Lose momentum.
- 60 -