metrics and balanced scorecards at bristol-myers squibb
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Metrics and Balanced Scorecards at Bristol-Myers Squibb
Peter M. Fasolo, Ph.D.
October, 2003
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Content
Company Introduction
Metrics at BMS
Examples
Employee Preference Survey
Retention Scorecard
Americas Region Scorecard
Executive Committee Scorecard
What’s Next
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Bristol-Myers Squibb’s Mission
Our company’s mission is to extend and
enhance human life by providing the highest-
quality pharmaceutical and related health care
products.
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% of 2001% of 2001Global Sales*Global Sales*
Worldwide MedicinesWorldwide MedicinesPrescription PharmaceuticalsPrescription Pharmaceuticals
Consumer MedicinesConsumer Medicines
Healthcare ProductsHealthcare ProductsMead Johnson Nutritionals Mead Johnson Nutritionals
ConvaTecConvaTec
(ostomy & modern wound care)(ostomy & modern wound care)
Medical Imaging*Medical Imaging*
44%%1010%%
8686%%
…………....…...…………......…...………….....……......……...
.....….….......….…..
* Excludes DuPont Pharma sales* Excludes DuPont Pharma sales
Our Businesses
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%% of 2001 Global Sales of 2001 Global Sales
Sales by Geographic Area
United States
68%
Europe,Europe,Mid-EastMid-East& Africa& Africa
19%19%
Other Western Other Western HemisphereHemisphere
6%6%
PacificPacific
7%7%
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Bristol-Myers Squibb Organizational Context
New Chairman and CEO with Bold Transformation Plan Focus on Core Rx Business Rebuild Executive Team Divest and Spin-off Businesses Focus on Core Acquisitions, In-Licensing and Partnerships
Recent Product Launches Abilify Reyataz Pravigard
Promising Late-Stage Pipeline Erbitux Entecavir Factor XA Dual PPAR CTLA4Ig
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BMS Employer of Choice
Why Bristol-Myers Squibb? - External Confirmations
Money Magazine No. 3 in Best Company Benefits Survey 2001
One Of The Top 10 Best Companies for Working Mothers
Top 500 Companies in Using Technology
America’s Most Admired Pharmaceutical Company-2001
http://www.bms.com/aboutbms/awards/data/index.htmlAnd More >>
Hope, Triumph, and the Miracle of Medicine
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Relentless Focus on Performance at Bristol-Myers Squibb
A Balanced Scorecard Strategy Supports the
Enterprise Direction of Objective Performance
Assessment, Alignment and Personal
Accountability
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Phases of Metrics Development
Descriptive
Prescriptive
Diagnostic/Strategic/Consultative
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Metrics Journey
2000 2001 2002 2003
Diagnostic/
Strategic/
Consultative
Prescriptive
Descriptive
EPS I
TurnoverAnalysis
AmericasRegion
Scorecard
RetentionScorecard
Exit Survey
HR MetricsLaboratory
ExecutiveCommitteeScorecard
Metrics/SurveyCOE
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Example 1: Employee Preference Survey
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. . . the following US employees voluntarily departed Worldwide Medicines
Based on Employment Data from 2001
1 of 10 Worldwide Medicines Employees (10%)
1 of 6 US Medicines Employees* (16%)
1 of 6 US Sales Employees (16%)
1 of 4 US Marketing Employees (24%)
*HQ, SP&A, Global Marketing, PC, BMSOV
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Worldwide Medicines US Turnover - 2001(including Puerto Rico)
Population on 1/1/2001: 15,176 Terminations: 2,624 = 17% Voluntary: 1,484 = 10% of total
population
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Worldwide Medicines Direct Costs Associated with 2000 Staffing
Advertising $ 85,000
Sign on Bonuses 3,272,000
Full Year Bonus Guarantees 400,000
Referral Bonuses 20,000
Relocation 35,204,000
Agency Fees (6 mos. actual 2001) 2,461,000
Training 9,000,000
$ 50,442,000
(US 17,800,000)
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Key Data Points - ExamplesValue Skyline
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Key Data Points - ExamplesEmployee Retention Index
Index Value ERI Level1 No intention to leave
0.67 Strong intention to stay0.33 Moderate intention to stay
0 Neutral-0.33 Moderate intention to leave-0.67 Strong intention to leave
-1 Intention to leave, job search underway
0.45
0.31
0.48
0.48
0.44
0.46
0.48
0.42
0.47
HIPOs
Marketing
Sales
Professionals
Managers
Males
Females
Benchmark
Overall
0.33 0.67 1.000.00ERI Index Values
In August 2001, survey scores of individuals who voluntarily terminated were compared with employees who remained with the Company.An analysis of ERI scores revealed its predictiveness. Employees with lower ERI scores actually left the company at a much greater rate.
Termination Analysis:
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Example 2: Retention Scorecard
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Retention ScorecardGoals and Objectives
Significantly reduce voluntary turnover across the
organization
Focus managers on the primary means of retaining talent
Put emphasis on reasonable actions managers can take to
broaden the talent mix
Communicate and emphasize organizational priorities
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Retention ScorecardField Study Design
Scorecard and Monetary Reward*
Scorecard Only Control Group
* $5000 upside kicker
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Retention ScorecardRetention Scorecard
Development Yes No Weighting
Standards & Expectations set and reviewed throughout the year
Development Plans established and reviewed throughout the year
Career Dialogue conducted (career direction and work-life balance)
Annual Development Summary completed
Management Capability Yes NoPercent of
Reward
Team meetings/teleconferences, at least monthly
One-on-One feedback and coaching, in addition to LD process
Retention** Yes NoPercent of
Reward
100%*
* 100% of talent management reward = $5,000** Managers required to enter names in at least one of the Retention Measures*** If no high performing employees are identified, it is expected that the
Excellence Award budget for this manager is $0
Complete all aspects of the Leadership Development process for all direct reports:
Maintain overall quality score of 4.0 or higher on career and personal development discussions, as assessed by your direct reports
All direct reports understand how skill sets and career goals are aligned with job responsibilities, e.g., Position Profiles
100% completion required for
participation in Scorecard
30%
Ensure a diverse slate of candidates for each position filled during the year
Turn or manage out 100% of identified low performing employees
Direct Reports have a clear understanding of their role, role objectives and fit with the department/district/region's objectives, as assessed by employees 30%
Direct reports understand the department/district/region objectives and how they align with business unit objectives, as assessed by employees
Conduct regular communication and coaching sessions with direct reports:
Lose no more than one of your highest performing employee, as identified in January***
40%
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Retention Scorecard Results
No difference between monetary and “scorecard
only” group
Both groups were significantly better at
development, management capability and retention
than control group
What you measure matters
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Example 3: Americas Region Scorecard
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AMERICAS SCORECARD (SAMPLE DATA) August 2003
Goal Perf Annual Goal
YTD
Goal
YTD
Actual
Perf vs
YTD Goal
Mission 75% 80% Sales 35,000$ 26,000$ 23,000 88.5%Pledge 65% 60% BUC 16,000$ 9,754$ 10,212 104.7%
Pride 80% 85%All dollar values reported in millions
Annual
Goal
YTD
Goal
YTD
Actual
Perf vs
YTD Goal Exit Share
YTD
Goal
YTD
Actual % Attn
Reported Sales U.S. Market Share
Pravachol 1,546$ 1,203$ 1,324$ 110.1% Pravachol 56.2 44.6 44.5 99.8%Plav ix 2,545 2,124 2,012 94.7% Plav ix 67.1 70.1 71.2 101.6%
Glucovance 454 367 365 99.5% Glucovance 12.1 15.7 16.2 103.2%Glucophage XR 656 578 600 103.8% Glucophage XR 4.6 4.6 4.3 93.5%
Tequin 242 168 157 93.5% Tequin 3.7 3.9 2.5 64.1%Avapro/ Avalide 454 375 375 100.0% Avapro/ Avalide 21.6 19.5 14.8 75.9%
HIV 879 745 799 107.2% HIV 35.4 37.8 25.9 68.5%Paraplatin 578 457 465 101.8% Paraplatin 3.7 2.3 4.3 187.0%Cardiolite 574 487 467 95.9% Cardiolite 45.9 54.6 58.5 107.1%Excedrin 241 178 164 92.1% Excedrin 64.2 37.9 31.3 82.6%
Annual
Goal
YTD
Goal
YTD
Actual
Perf vs
YTD Goal Goal Perf
Product Net Sales One BMS Culture Index - Enterprise 65% 68%Abilify 356$ 256$ 260$ 101.6% One BMS Culture Index - Management 85% 73%
Metaglip 256 195 172 88.2% Belief in Pipeline 60% 62%Pravigard 87 64 70 109.4% Belief in Future 90% 85%
Atazanav ir 87 62 36 58.1% Energize 95% 92%Definity 21 11 9 80.6% Focus 45% 45%
Excedrin Quick Tabs 18 12 13 111.8%
Goal Lost YTD Ann.YTD
Voluntary Turnover TOTAL 11% 496 5.0%Primary Care 13% 300 6.5% Development Goal Perf
BMSOV 9% 32 7.1% Employee Development Index 80% 86%Consumer 8% 12 11.2% Development Plan Rate (D6+) 95% 92%
Medical Imaging 7% 38 6.5%LA - C 4% 60 2.3%
Tech Ops 12% 54 10.0%
Key Talent Turnover TOTAL 5% 33 3.5%Primary Care 6.3% 23 5.1% Exit Data
BMSOV 4% 4 6.9% Top 3 reasons 1. Direct Manager Quality (43% )Consumer 3% 3 2.3% 2. Developmental Opportunity (21% )
Medical Imaging 5% 1 1.2% 3. Company Culture (19% )LA - C 4% 2 3.2%
Tech Ops 6% 0 0.0%
Strengthen Our Team & Develop Our People
Lead with a Compelling Vision by
Living our Mission and Pledge
Build Sustainable Long-Term Growth While
Achieving our 2003 Financial Objectives
Create a OneBMS CultureDeliver Pipeline Value
Drive Key Brand Growth
Americas Region Scorecard
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Example 4: Executive Committee (EC) Scorecard
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Purpose of the EC Scorecard
Track progress against company priorities
Assess employee perceptions of Bristol-Myers
Squibb
Guide action planning
Provide CEO and Board of Directors with year end
results
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BackgroundSurvey
50 questions assessing EC priorities & BMS as a best place to work 1 open-ended item: “What is working well at BMS?”
Survey administered April 7 to April 21, 2003
Stratified random sample of 5400 worldwide employees (D6+ internationally, excluding hourly employees in manufacturing)
64.4% response rate (n = 3464)
Salary Grade DistributionKey Executive: 128Key Manager: 1437 Professional: 1516Non-Exempt: 383
Gender47.1% Male51.2% Female
48 countries represented
21 functions represented
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The Survey
EC LeadershipEC LeadershipPrioritiesPriorities
BMS as a BestBMS as a BestPlace to WorkPlace to Work
Criteria of InterestCriteria of Interest(i.e.Intent to Leave)(i.e.Intent to Leave)
Items Assess:Items Assess:
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Leaders Make the Difference
Nine out of the top ten factors which are correlated
with an employees intention to stay with the
company are strongly influenced by an employee’s
manager
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Leaders Make the Difference• I am confident I can achieve my career goals at BMS
58%
• I am treated in a fair and just manner 73%
• I am proud to tell others outside of BMS that I work here 73%
• My contributions to the company are recognized56%
• We have a culture that encourages high performance with
the highest integrity62%
• It is clear what is expected of me at work83%
• I work in an environment where people support each other74%
• The leaders in my organization listen openly to all points of view 57%
• The better my performance, the more I will be rewarded 47%
• I am compensated fairly56%
All Employees % Favorable
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Process and Next Steps
Results presented to Chairman and CEO
Workshop for EC and Top 35 Executives of the
Company
Action Planning and Employee Communication
Underway
Change in Scores Tied to Variable Pay
Next administration in September/October 2003
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What’s Next?
Expanded Online Exit Survey
HR Measurement Laboratory
Follow-on Executive Committee Scorecard in
September/October
Metrics/Survey Center of Excellence for B-MS
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