The Balanced scorecard is a strategic management and communication tool that is used to effectively measure organisational performance, grow the value of intangible business assets and provide

guidance for the successful execution of business strategy.

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Why most businesses do not effectively execute on their strategic objectives?

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• Lack of strategic alignment preventing the effective cascading of strategy throughout the business

• No shared vision • Too many task based activities with limited focus on performance

outcomes • Lack of people accountability throughout the business • Performance targets overly focussed on financial measures and not

intangible measures – customer value, employee knowledge, culture • Disconnect between actions of the business and desired outcomes • Getting all employees to embrace strategic performance management • Lack of employee involvement and collaboration

The solution ?? An integrated planning and management system built on the balance scorecard will transform a business into a more results-orientated, strategy focussed entity that targets both short term and long term sustainability and success

What can the Balanced Scorecard do for you?

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The balanced scorecard is a strategic planning and management system that is used extensively in business and industry worldwide to align business activities to the vision and strategy of the organisation, improve internal and external communications, and monitor organizational performance against strategic goals. It can help your organization by translating high level organizational strategy into something that employees can understand and act upon in their day-to-day operations and initiatives. An effectively implemented balanced scorecard can help an organisation in many ways: • Increase focus on strategy and results instead of tasks • Break down communication silos between departments • Better understand and react to customer needs • Improve organizational performance by measuring what matters • Help leaders make better decisions based on leading performance indicators instead oflagging

financial data • Help leaders budget time and resources more effectively • Help leaders and employees prioritize the work they do

Getting started: Framework & Perspectives

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Kaplan and Norton describe the innovation of the balanced

scorecard as follows:

"The balanced scorecard retains traditional financial

measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-

term capabilities and customer relationships were not critical

for success. These financial measures are inadequate, however, for guiding and

evaluating the journey that information age companies must make to create future value through investment in

customers, suppliers, employees, processes,

technology, and innovation."

The steps….

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The steps (continued)….

6 The institute way TM

Strategic Map (Organisational whole)

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Cascading – throughout the organisation

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How to make sure the Balanced Scorecard works!!

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Challenges Solutions

Rushing the development and training of the Balanced scorecard in order to have the new system in place as quick as possible and thus undervaluing the importance of knowledge and understanding for successful implementation

Commitment to having people at all levels aligned with the organisations strategy by providing training and learning for the sustainability of a world class strategic management system

Management and control of the Balanced scorecards rests with a few select individuals

Executive sponsorship is required in order to demonstrate leadership/commitment for the validation of the program and must be supported by a balance scorecard team (group effort)

Not all executives and staff fully understand the Balanced scorecard Formulate a communication strategy and plan aligned with a transparent implementation plan. Train and distribute background material

The business has dozens of initiatives in place competing for scarce human resources.

Eliminate initiatives that are not aligned with the objectives of the strategic map and priorities

Are balanced scorecard results accurate? Strategies for effectively collecting and loading performance data must be developed if the tool is to be accepted and used by employees. Whether automated or not, the data gathering process is enhanced by customised collection templates

Lack of cascading of the Balanced scorecard effectively It is only through cascading to all levels of the organisation and allowing all employees to contribute to the overall success of the business that true strategic alignment can be achieved

Tracking results,scoring,reports (example 1)

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Sales Perspective: A LL Frequency: Quarterly

Period

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Total

Objectives

Financial

Exceed QTR GP%

EBITDA $ Surplus

Customer

# New customers target exceeded

Projects and Processes

Deployment of SaleSforce Portal

Sales Collateral build (Digital/Tangible)

War room" equivalent process build

Sales Pipeline design

ESA Redesign plan

Lead and manage "War room" process

Data Hygeine plan

Employee Name: Employee Title:

Manger Name: Manager Title:

Timeframe Covered: January 1, 2016 to December 31, 2016

Date Completed:

Department Objective Individual Objective Description Intended Results

Objective Weight

Performance Measures Target Weight Score

1

2

Initiatives Expected Completion Date Actual Completion Date

1

2

Tracking results,scoring,reports (example 2)

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Tracking results,scoring,reports (example 3)

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Joe Blogs Inc - Balanced Scorecard Q3 FY`16

Signature for acceptance Date -------------------------------------------- ------------------- Business development: Mr Bob Uncle

Perspective KPI Weight Measure

Financial Achieve above quarterly budgeted GP of 50% 10 IF … achieved 100% ; If not = "0"

EBITDA $200,000 (Control costs within remit) 10 If savings > 5% = 10 pts, if result is 95%-105% = 8 pts , if 90%-95% = 7 pts, if 85%-90% = 6 pts , if 80%-85% = 5 pts, if 75%- 80% = 4 pts , 70%-75% = 3 pts, If 70% = "0" points

Financial Weighted score 20

Key Projects & Processes Initiative 1: FY`17 - FY`19 Sales and Budget plan 20 IF… 100% Project deliverables achieved on time, aligned with objectives and with high quality output = 45pts, If mostly delivered with approved delay = 38.25pts , if not delivered = "0"s

Expectation:

Clearly defined, comprehensive Sales plan forming the foundation of sales goals/activities over 3 years

To identify strategies , risks , market share, sales opportunities, customer activities , resourcing, systems and budget

Developed, collated and presented to all company stakeholders

Initiative 2: Data Hygiene 15 IF… 100% Project deliverables achieved on time with high quality output = 15pts, If mostly delivered with approved delay = 12pts , if not delivered = "0"s

Expectation:

Process to ensure customer/pipeline data clean on an on-going basis

Strategy Weighted score 35

Customer Customer KPI

Won and closed = 150 new customers 40 If 150 customers or more = 40pts, if > = 120 = 32pts, If >= 100 =25pts, if <= 100 = "0"

Month end BDM board pack report completed and distributed to FM ( internal customer) working day 4 from EOM

5 IF… 100% Project deliverables achieved on time aligned with expected board report output = 5pts, if not delivered = "0"s

Customer Weighted score 45

Total Scorecard weightings 100