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This document sets forth a balanced scorecard approach to business strategy and serves as a performance management tool to help companies overcome difficulties in executing strategy, correct for over-reliance on financial measures, and recognize the importance of a company’s intangible assets. This document lays out the three primary steps involved in the balanced scorecard approach to business strategy execution. It further provides visual aids and flow charts to help a business implement its business strategy.
This document sets forth a balanced scorecard approach to business strategy and serves as a performance management tool to help companies overcome difficulties in executing strategy, correct for over-reliance on financial measures, and recognize the importance of a company’s intangible assets. This document lays out the three primary steps involved in the balanced scorecard approach to business strategy execution. It further provides visual aids and flow charts to help a business implement its business strategy. . Overview The balanced scorecard approach to strategy execution involves three primary steps: 1. Pre-Mapping Brainstorm: Thinking through four critical perspectives of business strategy. a. The Financial Perspective b. The Customer Perspective c. The Internal Business Process Perspective d. The Learning and Growth Perspective 2. Create a strategy map: This is a one-page graphic depiction of how your company will create value by identifying what it must do well to execute the strategy. 3. Construct a balanced scorecard that includes the following elements: a. Goals: The broad essence (like a tag line) of what you are trying to accomplish in each perspective. b. Objectives: How the goals can be put into operation. c. Measures: The criteria used to show evidence of the extent an objective has been reached. d. Targets: The specific desired level of achievement for the measures. e. Initiatives: The actions that need to be taken to achieve the targets. © Copyright 2013 Docstoc Inc. 2 . Pre-Mapping Brainstorm THE STRATEGY Consisting of strategic ideas and goals in each of the four perspectives Financial Perspective: If we achieve our vision, how will we look to our shareholders? [Capture your thoughts here.] Customer Perspective: Who are our customers? What do they want? What is our value proposition in serving them? [Capture your thoughts here.] Internal Business Process Perspective: At which processes must we excel in order to satisfy our customers? [Capture your thoughts here.] Financial Perspective: To enable progress toward our vision, how must our organization and its employees learn and grow? [Capture your thoughts here.] © Copyright 2013 Docstoc Inc. 3 . Strategy Map (Replace all highlighted example text below with your own.) Maximizing Profitability & Shareholder Value Sustained Grow Achieve double-digit, alternative optimal net income revenue ROIC growth streams levels Enduring Value-Added Relationships Understand Service Being Consistently and that pleases involved deliver the appreciate and retains in customer’s full-value customer customers community proposition needs Amazing Products, Stellar Service & Business Savvy New Maximize Exercise Innovative product efficiency best-in-class marketing & development governance and comm. quality and controls Well-Prepared & Highly Motivated Workforce Hire, Employees Employees Foster a develop, know the have the culture that recognize, strategy & info & tools rewards and retain what they they need teamwork & great people must do to excel initiative © Copyright 2013 Docstoc Inc. 4 . Balanced Scorecard (Replace all highlighted example text below with your own.) Goals Objectives Measures Targets Initiatives 1. Sustained 2-digit net 1. Net Income 1. 10%+ 1. Reduce Maximizing income growth costs Profitability & 2. Achieve optimal 2. ROIC 2. Optimal 2. Risk Shareholder ROIC levels mngmnt. Value 3. Increase revenue per 3. Rev. per 3. $300 3. Periodic customer customer review of pricing 1. Consistently deliver 1. Customer 1. 8-10 on 1. Develop the full value Satisfaction 10pt scale and test proposition Val. Prop. Enduring 2. Understand and 2. Emp./Cust. 2. 95% 2. Develop Value-Added appreciate customer Comparison Match and test Relationships needs Testing instrument 3. Service that delights 3. Customer 3. 8-10 on 3. Develop and retains customers Satisfaction 10pt scale and test 4. Being involved in 4. $ donations; 4. $1 mil; 4. Assess customer’s Paid service 16 hours comty. community hours/emp. needs 1. Innovative marketing 1. Awards 1. At least 1. Consult & communications Won one per Amazing campaign 2. Create Products, 2. New product 2. New product 2. 6/year Innov. Stellar Service development Launches Teams & Business 3. Maximize efficiency 3. Efficiency/ 3. 90/90 3. Study Savvy and quality Quality Ratio trade-offs 4. Exercise best-in-class 4. 100% 4. White governance and 4. Best Practices paper & controls Implemented task force 1. Hire, develop, 1. Best Practices 1. 100% 1. White recognize, and retain Implemented paper & Well-Prepared great people task force & Highly 2. Employees know the 2. Core 2. 95% 2. Craft Motivated strategy & what they Competencies Avg. CCT w/ Workforce must do Testing (CCT) strategy 3. Employees have the 3. Employee 3. 100% 3. Assess info & tools they need Survey needs & to excel address 4. Foster a culture that 4. Org. Culture 4. 95% on 4. Hire rewards teamwork & Assessment teamwork expert initiative & initiative consultant © Copyright 2013 Docstoc Inc. 5 .
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