preparing a balanced scorecard
Post on 11-Apr-2015
1.419 Views
Preview:
DESCRIPTION
TRANSCRIPT
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building a balanced scorecard
Par
amji
t S
har
ma
Par
amji
t S
har
ma
Imagine an excellent scorecard built by a staff executive or middle management without actively involving the senior management team in the process
Par
amji
t S
har
ma
Par
amji
t S
har
ma
The scorecard may be accepted as accurate representation of the organisation, but may not become an integral part of the organizationalmanagement process
Par
amji
t S
har
ma
Par
amji
t S
har
ma
Therefore, building BSC may require actual involvement of senior management
Par
amji
t S
har
ma
Par
amji
t S
har
ma
The first Step for building a successful BSC is to gain consensus and support among senior Management on why the scorecardis being developed
Establish objectives for BSC Programme
Par
amji
t S
har
ma
Par
amji
t S
har
ma
Guide the preparation of BSCGain CommitmentClarify the framework for implementation
Establish objectives for BSC Programme
The objectives would help to…
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 1. Select the appropriate Organizational UnitTask 2. Identify SBU/Corporate LinkagesTask 3. Conduct First Round of InterviewsTask 4. Synthesis SessionTask 5. Executive WorkshopTask 6. Sub Groups MeetingsTask 7. Executive Workshop: ii nd RoundTask8. Develop Implementation PlanTask 9. Executive Workshop: iii rd RoundTask10.Finalize the Implementation Plan
Par
amji
t S
har
ma
Par
amji
t S
har
ma
Task 1. Select the appropriate Organizational Unit
building the BSC- the process
Corporate
Div A Div B Div C
SBU1 SBU2 SBU3 SBU4 SBU5 SBU6 SBU7 SBU8 SBU9
Level I
Level II
Level III
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 2. Identify SBU/Corporate Linkages
Financial Objectives for SBU
GrowthProfitabilityCash flowHarvest
Overriding Corporate themes
EnvironmentSafetyEmployees policiesCommunity relationsInnovationprice
Linkages to other SBUs
Common customersCore competenciesSuppliersCustomer RelationshipIntegrated approach to customers
Linkage necessary becauseOne SBU may notDevelop at cost of other
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 3. Conduct First Round of Interviews
The architect will prepare
Background Materials on BSCInternal Documents of OrganizationVision, mission and strategySubmitted to Senior ManagementAcquire information about industryTrends like growth, competitors, customers, technology
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 3. Conduct First Round of Interviews
After review of materials, architect(1-3) Conduct interviews for at least 90 mtswith senior management
Obtain inputs on 4 perspectivesIntroduce the conceptIdentifying potential conflictsConsolidate views and understanding of BSC
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 4. Synthesis Session
After interview the architect & designTeam discuss
Responses in the interviewMajor issuesLikely resistance to BSCExpected changes in ProcessesDevelop tentative list of objectives and measuresBasis for first meeting of Top ManagementObjectives for 4 perspectives identifiedCause and effect relationship of objectives
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 5. Executive Workshop:1st Round
Architect schedule meeting with top Mgt.
Begin process of consensus on BSCGroup debate on Mission, Vision, Strategy…Addressing each perspective……..Show proposed objectivesVideotapes of interviewsBrainstorm on objectives ,top ones selectedDividing executive team into 4 sub-groupsSelect 3-4 strategic obj to each perspective along with the measuresPost workshop document is distributed
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 6. Sub Group Meetings
Architect schedule meeting with Sub groupsfor several meetings. The subgroup attempts to accomplish 4 principal objectives
1 Refine the wording of the strategic Objectives
2 For each objective, identify the measure that best capture and communicate the intentions of objectives
3 For each measure, identify the source of information and actions necessary to access information
4 For each perspective, identify the key linkage among measures within and between the perspectives
Par
amji
t S
har
ma
Par
amji
t S
har
ma
Selecting & Designing Measures
Core Financial Measures
ROI/EVAProfitabilityRevenue GrowthCost Reduction/ productivity
Core Customer Measures
Market ShareCustomer AcquisitionCustomer RetentionCustomer ProfitabilityCustomer satisfaction
Core Learning & Growth Measures
Employee SatisfactionEmployee RetentionEmployee Productivity
Internal Processes
Innovation ProcessesOperation ProcessesPost Sales Processes
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 7: Executive Workshop-IInd Round
Involve senior management & their subordinates
Debate on organizational, vision, strategy statement
and tentative objectives & measures
Output of workshop be presented to subgroups
Participants offer their comments
Prepare draft brochure for communication
Formulate stretch targets for each measure
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 8. Develop the implementation Plan
New team consisting of leader of each sub group
Formalize the targets
Develop implementation plan
Linking measures with data base
Communicating the Balance Scorecard
Information Metric to be developed
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 9. Executive Workshop 3rd Round
Senior Team Meets for the third time
Final consensus of Vision, mission, strategy….
Validate the stretch targets fixed by implementation team
Identifies action programmes to achieve targets
Aligning various initiatives to objectives, measures
Communicate implementation to employees
Par
amji
t S
har
ma
Par
amji
t S
har
ma
building the BSC- the process
Task 10. Finalize the Implementation Plan
To be integrated into management system
Management information system
Management start using BSC
Phase in plan at Place
Par
amji
t S
har
ma
Par
amji
t S
har
ma
Frame for implementation
Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
ActivitiesI Measurement Program Architecture
1Select Organizational Unit2 Identify SBU/Corporate Linkage
II Define Strategic Objectives
3 First Round Interviews4 Synthesis Session5 Executive Workshop-1st round
III Select Strategic Measures
6 Subgroup Meeting7 Executive Workshop: 2nd Round
IV Build Implementation Plan
8 Develop Implementation Plan9 Executive Workshop:3rd Round10 Finalize Implementation Plan
Project Plan
Interviews
Workshop 1
subgroups
Workshop 2
Roll out Plan
Workshop 3
Par
amji
t S
har
ma
Par
amji
t S
har
ma
Systematic process to build consensus & clarityBuild management teamCommunicate the strategyLink reward to achieving strategic objectivesSet strategic targetsAlign strategic targets and initiativesAn architect for framing, collect and constructActive support of senior managementClear objective about development of BSCSustain investment in intellectual and intangible
AssetsProvide foundation for strategic learning
Building a Balance Scorecard…..
Par
amji
t S
har
ma
Par
amji
t S
har
ma
questions
top related