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Similaire à Balanced strategic focus 2007 v2.0
Similaire à Balanced strategic focus 2007 v2.0 (20)
Balanced strategic focus 2007 v2.0
- 2. Objective • Logical next step to strategic meets – • Creating sharp measures for strategic objectives • Identifying initiatives to drive strategic objectives • Cascade measures and initiatives to the manager level
- 3. Problems of Strategy The Balanced Implementation Scorecard is: You can’t measure A MEASUREMENT what you cannot Measurement describe System + Alignment You can’t manage A Strategic MANAGEMENT what you cannot Management measure System Focus + You can’t A COMMUNICATION communicate what Communication you cannot describe Tool “Measurement is the foundation of management.”
- 4. What is the Balanced Scorecard? PROFITABLE The BSC GROWTH Retains the Financial traditional Perspective financial New Revenue Current Business Productivity Use of Assets measures Customer Value Proposition Customer Best in Best Total Best Total Cost Perspective Product/Service Solution The BSC links the financial Internal Product Customer Operational measures with Perspective Innovation Intimacy Excellence the drivers of future performance Learning Skills Technology Environment and Growth
- 5. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategy Source: Kaplan & Norton
- 6. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategy Source: Kaplan & Norton
- 7. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategy Source: Kaplan & Norton
- 8. Vision-Mission Barrier The BSC overcomes Vision- Only 5% of the work force Mission Barrier through the understands the strategy translation of strategy The BSC is a shared understanding of the Vision-Mission strategy translated into: Financial Customer Internal Learning&Growth
- 9. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategy Source: Kaplan & Norton
- 10. People Barrier „cascading‟ the scorecard One of 4 managers have overcomes the People Barrier incentives linked to strategy STRATEGY TOP-DOWN BOTTOM-UP Profitable Growth employee Financial New Increase Efficie Expand Sources in nt Use of Revenue Current Business Productivi ty of Assets driving the sees his/her strategy to contribution to Customer Value Proposition customer all the strategy Product Service Image Customer scorecard employees at all levels “line of sight” Understand Total Efficient Use New Products the Customers Solutions Homebuilder CRM. Productivity . of Assets process Internal scorecard Increase Employee Competence • Employee • Revenue per Satisfaction Employee personal Learning& scorecard Skills Systems Align Personal Goals Growth alignment and focus
- 11. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategy Source: Kaplan & Norton
- 12. Management Barrier strategic learning overcomes the Strategy is not regularly Management Barrier discussed and prioritized The Balanced Scorecard translates the vision and strategy into a coherent set of measures in four balanced perspectives Strategy Map Objective Measure Target Initiative • Grow • Annual • Marketing Financial Revenue Revenue Gross +30% program Growth from new Sales products The Balanced Customer New Products • Satisfy • Customer • CRM Scorecard Customer Profitability +20% Program Needs describes how Internal World-Class • Fast Time to • Time to from 9 • Cycle Time the strategy will Product Market Market down to Reengineering Development 6 months be executed Learning & • Acquire, • Staff • Skills Growth Highly Skilled Develop Competence 90% Development Workforce Skills Program
- 13. Vision-Mission Barrier Only 5% of the work force understands the strategy People Barrier One of 4 managers have BARRIERS incentives linked to strategy STRATEGY TO EXECUTION Management Barrier Strategy is not regularly discussed and prioritized Resource Barrier Budgets not linked to strategy Source: Kaplan & Norton
- 14. Resource Barrier Strategic Resource Allocation Budgets not linked to strategy overcomes the Resource Barrier Financial Customer Internal Learning&Growth Budget linked to the strategy
- 15. Resource Barrier Strategic Resource Allocation Budgets not linked to strategy overcomes the Resource Barrier Selecting and Managing Initiatives 1 Other CRM SCM projects On-going & proposed SRM CSR strategic initiatives re- TQM examined JIT,QDP Marketing Projects 2 Screen, assess, and identify “Linked and Strategic” CRITERIA: initiatives Balanced Scorecard strategies should be linked to the 3 overall strategic Select strategic initiative that goals will grow the enterprise List of Priorities
- 16. Cause and Effect Relationships and the Balanced Scorecard STRATEGY MAPS – a chain of cause-and-effect logic that connects the desired outcomes with the drivers Revenue WHAT? Financial Growth Loyal Customers WHAT? HOW? Customer Quality Product WHAT? HOW? Quality Quality HOW? WHAT? Internal Production Materials Learning Skilled Workforce + HOW? & Growth Technology
- 17. Cause and Effect Relationships and the Balanced Scorecard A strategy is a set of hypothesis about CAUSE and EFFECT. Revenue EFFECT Financial Growth • A chain of cause and effect Loyal Customers CAUSE EFFECT relationships can be established Customer as a vertical dimension through Quality Product CAUSE EFFECT the four BSC perspectives. Quality Quality • The BSC tells the story of the Internal CAUSE EFFECT Production Materials strategy Learning Skilled Workforce + CAUSE & Growth Technology
- 18. Cause and Effect Relationships and the Balanced Scorecard A strategy is a set of hypothesis about CAUSE and EFFECT. Revenue EFFECT Financial Growth CAUSE AND EFFECT ANALOGIES: Loyal Customers CAUSE cause effect Customer EFFECT Quality Product driver outcome Quality Quality if then Internal Production Materials EFFECT CAUSE how what Learning Skilled Workforce + CAUSE & Growth Technology
- 19. The ‘Balance’ in the Balanced Scorecard BALANCE BETWEEN … … TANGIBLE and INTANGIBLE Assets … FINANCIAL and NON-FINANCIAL Measures … EXTERNAL and INTERNAL Constituents … LAG and LEAD Indicators of Performance FINANCIAL Measures NON-FINANCIAL Measures EXTERNALPerspective •Financial Constituents INTERNAL Constituents •Customer Perspective •Financial Perspective LAG Indicators •Internal Perspective LEAD Indicators •Internal Perspective •Customer Assets TANGIBLE Perspective •Learning and Growth INTANGIBLE Assets of Performance •Learning and Growth of Performance Perspective Perspective
- 20. The ‘Balance’ in the Balanced Scorecard 1 – Balance between the tangible assets and intangible assets Revenue Financial Growth Loyal Customers Customer Quality Product Internal Quality Production Quality Materials tangible assets Learning Skilled Workforce + Technology intangible assets & Growth In order to extract value from the intangible assets, these must be transformed.
- 21. The ‘Balance’ in the Balanced Scorecard 2 – Balance between the financial measures and non- financial measures Objectives Measures Targets Initiatives Revenue Financial Growth Financial Loyal Customers Customer Quality Product Quality Quality Non-Financial Internal Production Materials Learning Skilled Workforce + & Growth Technology
- 22. The ‘Balance’ in the Balanced Scorecard 3 – Balance between the internal and external constituents Revenue Financial Growth Loyal Customers External – where we (effect) Customer want to go Quality Product Quality Quality Internal Production Materials Internal – what we (cause) Learning Skilled Workforce + have to do & Growth Technology
- 23. The ‘Balance’ in the Balanced Scorecard 4 – Balance between lag and lead indicators of performance Objectives Measures Targets Initiatives Revenue Financial Growth lag lead horizontal Loyal Customers dimension of the Customer BSC Quality Product Quality Quality Internal Production Materials Learning Skilled Workforce + & Growth Technology vertical dimension of the BSC
- 24. Performance Measures in the BALANCED SCORECARD measures the „lead‟ or driver to the lag measures the results of an Financial measures, can measure intermediate action after a time period processes & activities • sales • number of sales calls Customer • hours spent with customers Internal historical predictive Learning after the fact can make adjustments &Growth 1
- 25. Strategy Maps Perspectives Long Term Financial Long Term Shareholder Value Business Performance Levers Shareholder Value How do we Growth Productivity contribute to Growth Productivity Strategy Strategy business Strategy Strategy success? Customer Value Proposition What do our Cost Quality Time Function Relationship customers Cost Quality Time Function Relationship expect and value? Process Value Chain: Path to Performance To satisfy our Assess customers, Customer Assess Innovation Customer Operational Regulatory Effectiveness what processes Innovation Management Operational Regulatory Effectiveness Processes Management Processes Processes in Meeting must we excel Processes Processes Processes Processes in Meeting Processes Need at? Need Capability Enabling Capabilities To achieve our Skills and Technology Knowledge assets, Context, vision, how competencies + and databases + best practices + Climate, Culture must we learn and improve? “Adapted from Kaplan, Robert S. and David P. Norton; The Balanced Scorecard: Translating Strategy Into Action. Boston: Harvard Business School Press, 1996”
- 28. Financial Objectives Strategic Objectives Metrics and Targets
- 29. Customer Objectives Strategic Objectives Metrics and Targets
- 30. Process Objectives Strategic Objectives Metrics and Targets
- 31. Capability Objectives Strategic Objectives Metrics and Targets
- 32. Cascade to Goals – how it impacts you Company Performance Measures Financial Customer Process Capability Franchise Measures Franchise Measures Franchise Measures Financial Customer Financial Customer Financial Customer Process Capability Process Capability Process Capability Individual & Team Measures Measures Targets Measures Targets Measures Targets Measures Targets Measures Targets Measures Targets Measures Targets Measures Targets Measures Targets Measures Targets 1. Measures Targets 1. 1. Measures Targets 1. 1. Measures Targets 1. Measures Targets 1. Measures Targets 1. 1. 1. 2. 1. 2. 1. 2. 1. 2. 1. 2. 1. 2. 1. 2. 1. 2. 1. 2. 1. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 3. 2. 1. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 2. 4. 3. 4. 3. 4. 3. 4. 3. 4. 3. 4. 3. 4. 3. 4. 3. 4. 3. 4. 3. 4. 4. 4. 4. 4. 4. 4. 4. 4. 4.
- 33. Time to Stretch…. 1800 1600 1400 1200 1000 800 600 400 200 0 2004 2005 2006 2007 2008 2009 2010 Series1 501 604 697 875 1050 1300 1600