The Balanced Scorecard

Creating Strategy Map to Drive Corporate Performance

Prepared by : Gajendra Khare Founder Director Siddhartha Consultancy Services www.scsuniversal.com

balanced Scorecard -Defined

Was first published in 1992 by Kaplan and Norton,

The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals.
o Translate strategy into action o Planning for long term organizational success Balance between - Financial measure and performance - Long range competitive abilities - Offers balanced view of the organization upon which they can further add-on

Prepared by Gajendra Khare

Balanced score card perspectives

A. Financial How do we succeed financially? B. Customer
How do we appear to our customers?

C. Internal Process
At what processes must we excel?

D. Learning and Growth

How do we sustain our ability to change and grow?

Why BSC
Focus on key things needed

to achieve breakthrough performance Integration of various corporate program like Quality, Business process reengineering and Customer service initiatives Communication and understanding of business goals and strategies at all levels Provide comprehensive picture of business operation

We Use the Scorecard to Articulate Strategic Hypotheses in Cause-effect Terms

Financial Results

To Drive Financial Success...

Customer Benefits

Needed to Deliver Unique Sets of Benefits to Customers...

Internal Capabilities

To Build the Strategic Capabilities..

Knowledge, Skills, Systems, and Tools

Equip our people

Managing performance with BSC

Balances Financial and

non Financial measured Balances short term and long term measures Balances performance Driver with outcome measures Leads to Strategic focus and organizational alignment

Balanced Scorecard Measurements

Balanced Scorecard Strategy Map

Process Strategy and BSC

Strategic Outcome

Mission why we exists

Strategy MapTranslate the strategy

Strategy Our game Plan
Balanced Score Cards Measure and Focus

Satisfied shareholders

Delighted Customers

Vision what we want to be

Excellent Process

Motivated workforce

Values What is important to us

Departmental Level Score Card example

Key Implementation Success Factors

Obtaining executive

sponsorship and commitment Involving a broad base of leaders, managers and employees in scorecard development Choose the right Scorecard Champion Beginning interactive (twoway) communication first Viewing the scorecard as a long-term journey rather than a short-term project Getting outside help if needed

The Successful Scorecard

Is a dynamic process

continues to set higher

targets and achieves them Define jobs strategically from the perspective of where it fits in with the strategic business goals Supports joint decision making about what you do/dont do based on strategic goals

Scorecard Potential Pitfalls & Criticisms

Lack of a well Defined Strategy The balanced scorecard relies on a well defined strategy and understanding of linkages between strategic objections and metrics. Without this foundation the implementation could fail. Too much focus on the lagging measures Focusing on only the lagging measures may cause a lack of priority or opportunity for the leading measures. Use of Generic Metrics Dont just copy metrics from another firm. Identify the measures that apply to your strategy and competitive position . Self-serving managers Managers whose goal is to achieve a desired result in order to obtain a bonus or other self reward.

Thank YOU