Balanced Score Card @

Members: 2010181 - 2010192

Case

British Airways served both Heathrow and

Gatwick airports in London

In 1997 the operation at Heathrow was in great

need of a change

Poor performance of British airways, urgent need

for improvement

The new manager given the task of change

management brought in

BSC Approach

Balancing all the aspects of the organization Aims of BSC:

Takes into consideration all the 4 perspectives Internal performance and external performance Lead and lag indicators.

Success of BSC lies in: Rigor in purpose Rigor in measurement Rigor in application

The Balanced Scorecard in Heathrow Terminal 5 Project has created a fresh approach to involve all key stakeholders, to move towards a quality culture.

BSC Approach focused on cause-and-effect linkages woven together.

The Approach to BSC

Top down/Bottom up?? British Airways was facing a crisis and every small

improvement mattered. The bottom-up approach provided quick measures

for improvement. BSC initiated in Baggage Handling ‘Pilot Project’ by

new manager without guidance of higher level score card.

All other managers contributed with their ideas/ relative metrics for improvement.

Since Baggage Handling was a concrete activity, it was important to involve many employees for concrete activity measures.

Implementing BSC @British Airways

Manager from BA Cargo brought into British Airways Experience in using BSC as a change

instrument

Scorecards initially implemented only for the baggage handling unit

Implementing BSC @British Airways

Off-Site meeting Description by each unit on how customers judged their operation

Derive measures based on perception Increased tangibility of scorecard Easily verifiable metrics No open discussion on BA’s organization as a whole

Implementing BSC @British Airways Scorecards required to be used by other units

added to the manager’s responsibility Each unit could come up with its own metrics tailored to

specific situations Had to explain relevance of each metric

Now used as a management control system at BA Heathrow Each unit plans operations and monitors performance

according to scorecard dimensions Reporting of unit level performance to superiors using

scorecards Units used scorecards without much attempt at cohesion

– allowed scorecard to crop up locally

Post implementation

Score cards turned around the entire way BA operated

Since it gave a structured method to measure performance, it provided a balanced approach to measure all perspectives of the bagging department

With the success of this in the bagging department it was rolled out to the front line customer service

Why did it succeed

Focus on all perspectives of the department

Provided a way to measure the intangibles, thus tangiblizing the intangibles

Vision and

Strategy

Finance

Internal business

perspective

Learning & Developm

ent

Customer

Road Ahead – The Strategic Map

Development

Process

Customers

Finance

Improve staff skills

Improve technology

Increased customer service

Increased efficiency

More satisfied customers

Improve profitability

Strong finances

BSC Challenges

The greatest challenge in implementing BSC was to convince everyone of the results

The manager proposed to manually measure some results to prove BSC effectiveness.

Different interpretations and practices of the metrics Knowledge about BSC project , no instructions within

BA about the preferred management control system. Final Alignment of all the score cards.

Learnings

Initiative can be taken up by any member of the organization. It all depends on the situation.

Creating value from assets that don’t appear on Balance sheets. The increasing use of non-financial criteria to measure performance

The intangible assets are interdependent for success

The tool can be customized based on the operating unit’s needs and expanded to other units

Thank You