Download - Balance Score Card Introduction
The Balanced ScorecardThe Balanced Scorecard
Introduction to the Balanced ScorecardWhat is it? Why do it?
Balanced Scorecard FundamentalsThe Four Perspectives Measures, Targets and InitiativesRoles and Responsibilities
Using the BSC as a Management System
Outline
The Balanced ScorecardWhat is it?
Definition: The Balanced Scorecard is a
management tool that provides stakeholders with a comprehensive measure of how the organization is progressing towards the achievement of its strategic goals.
The Balanced ScorecardWhat is it?
The Balanced Scorecard:
Balances financial and non-financial measures
Balances short and long-term measures
Balances performance drivers (leading indicators) with outcome measures (lagging indicators)
Should contain just enough data to give a complete picture of organizational performance… and no more!
Leads to strategic focus and organizational alignment.
The Balanced ScorecardWhy do it?
• To achieve strategic objectives. • To provide quality with fewer resources.• To eliminate non-value added efforts.• To align customer priorities and expectations with the customer.• To track progress.• To evaluate process changes.• To continually improve.• To increase accountability.
The Balanced ScorecardWhy do it?
It works!
“The BSC has forced our management team to focus beyond financial measures… too often in the past we would get sucked into short-term thinking.”
“The BSC dramatically improved our data analysis… we don’t overreact nearly as much as we used to.”
Mission – What we do
Vision – What we aspire to be
Strategies – How we accomplish our goals
Measures – Indicators of our progress
The Strategy Focused Organization
Environmental Scan
Strengths Weaknesses
Opportunities Threats
Values
Mission &Vision
Strategic Issues
Strategic Priorities
Objectives, Initiatives, and Evaluation
A Model forStrategicPlanning
The Five Principles
1. Translate the strategy to operational terms.
2. Align the organization to the strategy.3. Make strategy everyone’s job4. Make strategy a continual process5. Mobilize change through executive
leadership
The Strategy Focused Organization
Source: The Strategy Focused Organization, Norton & Kaplan
The Balanced Scorecard and The Big Picture
•Activity Based Costing•Economic Value Added•Forecasting•Benchmarking•Market Research•Best Practices•Six Sigma•Statistical Process Control•Reengineering•ISO 9000•Total Quality Management•Empowerment•Learning Organization•Self-Directed Work Teams•Change Management
MissionandVision
BalancedScorecard
StrategicPlanning
FINANCIAL/REGULATORYTo satisfy our constituents, what financial & regulatory
objectives must we accomplish?
CUSTOMERTo achieve our vision,
what customer needs must we serve?
INTERNALTo satisfy our customers and
stakeholders, in which business processes must we excel?
LEARNING & GROWTHTo achieve our goals, how
must we learn, communicate and grow?
THE BALANCED SCORECARDTHE BALANCED SCORECARD
Customer Perspective
o Customer Satisfaction (Average)
o Satisfaction Gap Analysis (Satisfaction vs.
Level of Importance)
o Satisfaction Distribution (% of each area scored)
Possible Performance MeasuresPossible Performance Measures
To achieve our vision, what customer needs must we serve?
Financial / Regulatory Perspective
o Cost / Unit
o Unfunded Requirements or Projects
o Cost of Service
o Budget Projections and Targets
Possible Performance MeasuresPossible Performance Measures
To satisfy our constituents, what financial and regulatory objectives must we accomplish?
Internal Perspective
o Cycle Time
o Completion Rate
o Workload and Employee Utilization
o Transactions per employee
o Errors or Rework
Possible Performance MeasuresPossible Performance Measures
To satisfy our customers, in which business processes must we excel?
Learning and Growth
To achieve our goals and accomplish core activities, how must we learn, communicate and work together?
Possible Performance MeasuresPossible Performance Measures
o Employee Satisfaction
o Retention and Turnover
o Training Hours and Resources
o Technology Investment
Financial / Regulatory Perspective
Objectives Measures Targets Initiatives
Customer Perspective
Objectives Measures Targets Initiatives
Internal Perspective
Objectives Measures Targets Initiatives
Learning and Growth
Objectives Measures Targets Initiatives
Strategy Map
The Balanced Scorecard as a Management System
BSC reviewed regularly to enhance operational decision-making
Success of initiatives assessed based on DATA… not opinions
Leading indicators evaluated to confirm accuracy of assumptions
The Balanced Scorecard as a Management SystemThe BSC is a “Living Document” that
requires regular revision of objectives, measures and initiatives:
How are we doing? Are we measuring the right things? What initiatives do we need to get us
where we want to go? Have our organizational goals
changed?
