balance score card presentation 02

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FCFC AND BALANCED SCORECARD APPROACH

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FCFC STORY

Trimarchi and Tomb Founded a small bank near Blairsville. After few years they sold it to 1st National Bank, where they became the senior managing executives.

FCFC as a bank holding company Acquisition program ( 9 local community banks )



FCFC STORY

FCFC wanted to expand its product mix, Each acquistion could retain its local identity, but there was a lot of competition due to the monthly ranking.

All operating units were reorganized under a single brand ( First Commonwealth )



PROJECT OBJECTIVES

Performing consistently in the top 25% of our peer group.

Becoming a world-class sales organization generating revenue growth without acquisitions.

Having a clear Strategy. Responsibility.Engaging all employees.



GOVERNANCE COMMITTEE AGENDA

Item 6 on the agenda – on the BSC It has improved since the start of the project. Explains strategy and strength and it helps to think “out of the box”Its information change as circumstances changes.Allows board participation in Management plans.Executive scorecard helps governance and committees.It can track the performance of all members of executive team and following compensation made by compensation committee.



BOARD OF DIRECTORS MEETINGReview of the new board reporting package Data’s board evaluation.Board of Directors Balanced Scorecard Report.Full Board Self-Evaluation form.Individual Director Self-Evaluation FormBoard Resolution on Criteria for Board Membership.Executive Balanced ScorecardsSuccession Plans



EXECUTIVE BSC

Each Executive developed a personal scorecard, Using the subset measures on the enterprise scorecard that he/she could be influence.

Differently from the previous situation ( in which excellent executives were not rewarded properly ), the new compensation system would help executive that are working well to earn the benefits that they deserve.



BOARD BSC

For the Board’s learning and growth measures were introduced:

A Survey that each board member would complete after each meeting to assess the quality of the meeting board processes.

A Self-evaluation of to be completed semiannually from each board member



BOARD BSC

The Board Scorecard uses a stakeholder rather than a customer perspective to reflect the board’s responsibilities to shareholders. The Three Objectives were :

Approve, Plan and monitor corporate performance.Strengthen and motivate executive performance.Ensure corporate compliance.



THE FINAL PROJECT

Three sets of Scorecard :

Enterprise balanced scorecard.Board balanced scorecard.Executive balanced scorecard.

And All Board member noted that the process had been highly beneficial.



INTRODUCING THE BALANCED SCORECARD

Trimarchi wanted to reintroduce the performance culture into the company, so Dahlmann suggested using the Balanced Scorecard.



WHAT IS BALANCED SCORECARD?

The Balanced Scorecard is a strategic planning and management system used to align business activites to the vision and strategy of the organization by monitoring perfomance against strategic goals



BALANCED SCORECARD Concept

It was publishes in 1992 by kaplan and Norton, a book followed in 1996

Traditional performance measurement that only focus on external accounting data are obsolete

The approach is to provide ‘balance’ to the finacial persperctive.



Why use a Balance Scorecard?

• Improve organisational performance by measuring what matters

• Increase focus on strategy and results• Align organization strategy with workers on a

day-to-day basis • Focus on drivers key to future performance • Improve communication of the organization’s

Vision and Strategy • Prioritize Projects / Initiatives



4 Original Business Perspectives

The Balanced Scorecard model suggest that we view the organization from 4 perspective

Then Develop metrics, collect data and analyse it relative to each of these perspectives



4 Business Perspective Question

• Financial What must we do to create sustainable economic value?

• Internal Business Process To satisfy our stakeholders what must be our levels of productivity, efficiency, and

quality?

• Learning and Growth How does our employee performance management system, including feedback to

employees, support height performance?

• Customer What do our Customer require from s and how are we doing according to those

requirements



Balanced Scorecard Strategy Map



Key Implementation Success Factors

• Obtaining executive sponsorship and commitment

• Involving a broad base of leaders, managers and employees

• Enhance information system

• Monitored Progress

• Beginning interactive (two-way) communication first • Getting outside help if needed

• Greater Customer Satisfaction



Scorecard Disadvantages • It is not a tool you can just think up one night to solve a problem. Instead, it

is recommended that you hold a meeting to plan out what goals you would like to see your company reach in each of the four above areas.

• while the balanced scorecard gives you an overall view of the four areas for concern in business growth and development, these four areas do not paint the whole picture. The financial information included on the scorecard is limited. Instead, to be successfully implemented, the balanced scorecard must be part of a bigger strategy for company growth

• many companies use metrics that are not applicable to their own situation. It is vitally important when using balanced scorecards to make the information being tracked applicable to your needs. Otherwise, the metrics will be meaningless.



ADVANTAGES Full contribution on implementation and execution of

strategy. Common measurement system that could be deployed

across the entire organization. Introducing of Non financial measurements helps

understanding the new strategy. Keep the company focused on the core drivers and

critical issues. Long tern Vision Evaluation of the manager performance based on short

and long term objectives. Board BSC gets the board more involved in company’s

strategy



ADVANTAGES BSC Helps also the corporate governance process. Executive scorecard helps governance and compensation

committees.



Thank You for your time
