Balanced Scorecard Samples by gmf13850

VIEWS: 672 PAGES: 25

More Info
									  Developing a Balanced Scorecard
      CIPD Norfolk Group, 17 October 2006




Richard Barnes
Culturetracker.com
        What is a “Balanced” Scorecard
   A strategic and operational tool
   Owned by the Executive
   Shared by everyone
   Balances:-
       Long and short term
       Hard and soft measures
       Leading and trailing indicators
       Internal/external perspectives
   Like writing a novel, not writing a list
   Measures support change, not monitoring
     It is NOT
   A new idea
   An end in itself
   A playing field for internal politics
   An “initiative” of Finance, HR,
    Marketing etc.
   Boardroom art
   A make-work exercise
     Its origins
   Nolan-Norton Consultants 1990
   12 client “Organisation of the Future” study group
   Based on premise that financial measures were
    insufficient for a modern business
   Principles espoused previously by:-
       Rensis Likert (The Human Organisation, 1960)
       TQM “gurus” (Deming, Crosby, Juran etc.)*
       European Foundation for Quality Management (1985)
       Maisel and McNair parallel models


            * Original K&N source was part of a TQ programme
The EFQM Excellence Model



                   9%
                                                       9%



 10%                                14%
                   8%                                  20%
                                                                       15%



                  9%                                   6%


       (percentages show how each elements is scored for importance)
  Kaplan and Norton model (1996)

             Customer


              Balanced    Business
Financials    Scorecard   Processes

             Learning
             & growth
      A question of balance?
                         Customer perspective
                          Corrective activity
                         Developmental activity
                         Balancing compliance
                           with added value
 Financial Measures                               Business Processes
Key performance ratios                                Drumbeat
                               Balanced
   Financial health                               Time, cost, quality
Balancing leading with         Scorecard           Balancing inputs
  trailing indicators                                and outputs
                         Learning and growth
                           People measures
                         Knowledge measures
                          Balancing soft and
                            hard indicators
Building the Balanced Scorecard
                     How do you
                    create value?




                  The key
                  question
A strategic tool
   Starts with strategy
   Continuous process
   Needs to become
    culturally embedded
        The story of a scorecard
         To be successful for our shareholders, we must be (position in market),
         which means that we must return superior financial results in .......


Our customers are the people who will secure these results for us so we
must offer our customers superior value by .........


           To deliver this superior value we must excel in the way we manage the
           processes for .......

These processes are operated by our people. We must provide our people
with ....... to achieve excellent performance.
 Cause and effect chain
             Strategic Objective
 May be             What
reversed     Financial Measure
                   How
           Customer Value Measure
                    How
              Process Measure
                   How
             Employee Measure
Cause and effect chain example
             Become No 2 player
                  What
       F         Market share
                    How
       C       Service span offer
                     How
       P Services delivered per customer
                      How
       E      Availability of data
The Balanced Scorecard




             Where does it fit?
            Where does it fit?                                            Building
                                                                           Using
Balanced
Scorecard
                                  Vision
                            Mission and CSFs
                           Strategic Objectives
                         Measures




                                               Alliances




                                                                     Structure
  Rewards




                                                           Systems
                                    Projects
               Targets




 Culture and values (leadership/style/relationships etc.)
       Example Retail Strategic themes
Themes             Projects             Measures
 Broadening the    Pharmacy store      Pharmacy store

  offer              expansion            sales growth
 Focus on Health   New store           Brand Penetration
  and Beauty         opening process      (Market Research)
 Friendly and Fun  Living the Mission  Mystery Shopper

 Destination of    Category            Footfall and basket

  Choice             management           size
     Sample retail scorecard
                        Customer perspective
                             Basket Size
                        Mystery Shopper index
                               Footfall
                             Complaints
 Financial Measures                                    Business Processes
Sales Revenue growth                                       Stock Outs
                              Balanced
 Return on Turnover                                New store plan vs. actual
     Cost of sales            Scorecard            Strategic Projects delivery
      Shrinkage                                    Supply chain process time
                         Learning and growth
                             Absence level
                             Stability index
                       Mission involvement index
                           Starfish.net ideas
                                                  Joined up thinking?
 PEOPLE                                                                                                                                                          CUSTOMER
                             Blue arrows indicate positive correlation. Red arrows negative. Broken line is a weaker connection


                                                                   Staff Loyalty           Complaints*

                                              Development                                                      Satisfaction                        * No data available
                                                                                                                                                   for this element
                                                                                                        0.16

                                Morale (absence)                                                                              Loyalty*
                                                  -0.20
     only in Metro and                            -0.28                                          0.16
     Extra Stores

                                Recruitment   0.27                                                                                 Market share*
     only in smaller store
     formats - Metro and
     Express
                              One in Front*
                                                                                                                                   Sales Growth*
                                                                0.13
                                                          0.1
                                                                                                        0.17
                                                                                                                       0.11
                                                                       -0.1
                                   Productivity                                                                -0.16
                                                                                                                  0.22        Cost Controls (Sales var)
                                                                                 -0.1
                                    Stock availability
                                                                                                               Profitability*
                                                     Waste Mgt*
                                                                          Stock Mgt     Driving extra sales to bottom
                                                                                                    line*

                                        Number at arrow head indicates size of Pearson co-efficient of correlation.
OPERATIONS                                Superstores used for consistency of statistic except where indicated.                                                    FINANCE
Using the Balanced Scorecard



                 Drill-down into
                  HR systems
          Performance management

Age              What is      Key process   Key Output     Culture
                 valued?
Pre-industrial   Community    Belonging     Contribution   Social
Age              Loyalty
Industrial Age Obedience      Compliance    Output         Work-ethic
               Output
Information      Knowledge    Empowerment New value        Mobility
Age              Innovation
    Learning and growth
   Employee satisfaction
   Employee capability
   Information availability
   Knowledge growth
   Performance and reward
    management systems
   Cultural measures from surveys – e.g.
    leadership, communication,
    recognition (enablers)
    Success factors
   Drill-down into Systems
       Planning and objective setting
       Operational targets
       Budgeting
       Internal audit
       Continuous improvement
       Project management
       Performance
        management/appraisal
       Reporting and meeting regimes
       Reward and recognition.......
“Unfortunately, this year’s
 low score on morale in the
employee survey means our
balanced scorecard index is
below the threshold for the
       bonus award”




          …with grateful
          thanks to Catbert

								
To top