Balance Scorecard - An Effective Tool

7/28/2019 Balance Scorecard - An Effective Tool

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10/4/03 NYS Leadership Conference 1

The Balanced

Scorecard

A Strategic Implementation Tool

for your Organization, HRDepartment, Chapter and StateCouncil


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NYS Leadership Conference 210/4/03

Todays Agenda

Overview of the Balanced Scorecard

Why the Balanced Scorecard will helpexecute strategy

Strategy Map and Balanced Scorecard

OutcomesDiscussion Ideas for scorecards


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Executing Strategy...

Is the greatest challenge for o rganizat ion s

Vision - only 5% of workforce gets it!

People 25% of managers have incentives linked to strategy

Management

85% of executive teams spend less than 1 hour/modiscussing strategy

Resource60% of organizations dont link budgets to strategy


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Strategic Execution

Bad execu t ion , no t bad strategy is the

cause of 70% o f CEO fai lures

Execution is not just tacticsit is a

discipline and a system

Source: Execution: The Discipline of Getting Things Done, by Larry Bossidy, and FORTUNE Magazine, Why CEOs Fail


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Challenges in Executing Strategy

Financial Management

ToolsBalance Sheets

Income Statements

Statement of Cash Flow

People Management

ToolsMBO

Training Programs

HRIS

360 Feedback

Customer Management

Tools

C R MCustomer Segment Analysis

Customer Surveys

Process Management

ToolsSix Sigma

Supply Chain ManagementTQM

Strategy ManagementTools

???


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Train and Communicate Strategy

The Balanced Scorecard

Set goals, select performance measures and linkmeasures to incentives

Set target for each goal and re-deploy resources to

activities and initiatives to achieve targets

Provide feedback on performance and

learn from results

Feed

Forward

Learning


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The Balanced Scorecard

A robust tool but keep it simple!

Makes strategy tangibleeveryones job!

Tracks whats important hits and misses

Measurement-lead management

Provides feedback for short-term coursecorrections and long-term learning


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Balanced Scorecard Perspectives

A. Financial

How do we succeed financially?

B. CustomerHow do we appear to our customers?

C. Internal ProcessAt what processes must we excel?

D. Learning and Growth

How do we sustain our ability to change and grow?


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Government / Non-Profit Perspectives

Financial taxes, donations, grants, maintain bond rating, sound fiscal

management, long-term growth

Customer reduce crime, increase community safety, provide economic

opportunity , involved parents, chapter resource

Internal Process promote business mix, streamline customer interaction, effective

instructions, nutritious meals, website management

Learning & Growth close skills gap, achieve satisfaction levels, tenure, volunteer

development


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Balanced Scorecard Perspectives

How do we Objectives Measures Targets Initiatives

appear to our

Stockholders?

Financial

How do we Objectives Measures Targets Initiat ives

appear to our

Customers?

CustomerAt what internal Objectives Measures Targets Initiatives

processes must

we excel?

Internal Business ProcessVision&

Strategy

How do we Objectives Measures Targets Initiat ives

sustain our

ability to change

& grow?

Learning and Growth


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Government & Non-Profits

The Mission

To succeed, how should we look to

our funders?

To satisfy our funders and recipients,

and achieve our mission, at what

processes must we excel?

To achieve our vision, how must ourpeople learn, communicate and work

together?

To achieve our mission, what

benefits do we deliver to our

recipients,

The mission, rather than financial/shareholder objectives, drive the organizations

strategy


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Cascading Scorecards

to Build AlignmentOrganization

Business

Unit

Business

Unit

Business

Unit

Teams

Individual Contributors


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FinancialSound

Fiscal

Mgmt

Budgeting

Long-Term

Investment

Strategy

Customer The Value

Proposition

Internal Process

Learning & Growth

The Value Proposition

Product/Services

Price Selection

Quality Availability

Relationship

Partnership

Services

Brand

Image

Innovation

New learning

Partnerships

Future needs

Operational Excellence

Admin excellence

Network of supplier for

Products & services

Adaptability

Customer Mgmt

Deepen Knowledge

about customer

Attract

Retain

Grow Relationship

Climate for Action

Personal Growth

Competencies

Functional Excellence

Leadership Skills

Strategic Readiness


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Scorecard Information

Information Type Are. Example is

Strategies High Level Goals Increase Market Share

Objectives Measures of action

plans

Increase Customer

Satisfaction

Measures Indicates success or

failure

Average Customer Rating

(scale of 1-10)

Targets Desired level ofperformance for a

measure

Achieve 9.9 of 10 AverageCustomer Rating

Initiatives Management actions

taken to achieve target

Train CSR Staff in Problem

Resolution Skills

Perspective: Financial / Customer / Internal Process / Learning&Growth


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Financial Strategy M Strategy Map Objectives

Initiat ive/Owner Budget

Grow Revenue Grow Revenue JF

Increase Profit Margin xx% JF

Customer The Value Proposition

Product/Services Customer Satisfaction 9.0 SPS Overall Bette Francis $xxIntegrity BeyondReproach Innovation Partnership Image Ivoice Available 10 Sites by 11/1/03 MT

Availability Service Communicate value

Customer Profitability

Internal Process Operational Excellence

Integrity BeyondReproach Maximize efficiency Competitive Positioning 2 Replace/Qtr CP

Designs/Quote 5/Quote-Complex MT

Customer Profitability

Create Awareness

Learning & Growth Sustaining Our Ability to Change & Grow

Platinum Certification Recertify as Platinum B. Francis

Technical Expertise Information is Available

Certify TechnicalKnowledge Increase Certifications

Employer of Choice Tools to do the job Make application to EOC Submit 2 applicationsB. Francis N/A

Live the SPS ValuesGreat People

SPS Strategy and Balanced Scorecard

Our Purpose for Being is to Provide Our Customers with the Finest Communications Value in the Marketplace.

Improve Profitability

Customer Satisfaction Repor

Action Plan

Financial ResponsibilityIntegrity BeyondReproach

Profit Margin

Balanced Scorecard

Measurement Target

Understand thestrategy and whatneeds to be done

Enhance externalrelationships

Value of the IndividualIntegrity BeyondReproach Human Capital

Acquire new relationshipsGrow/broaden existingrelationships

Maximize quality ofbusiness processes

Organizational

Readiness

Excellent ServiceExceptional CustomerValue

Manage Customer

Relationships MarketsManage Operations

Our vision is to be the leading integrator of communications equipment and services for voice solutions and data networking

Excellent ServiceExceptional CustomerValue BrandRelationship

$xxxMRevenue Attainment


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Human Resources Mission Statement:

The Human Resources Team will lead by example working to build a culture of high-energy,

committed professionals who understand that continuous improvement and customer service

are primary value competencies integrated into every position while developing SPS as a

recognized employer of choice.

Learning & Growth Sustaining Our Ability to Change & Grow

Platinum Certification Recertify as Platinum B. Francis

Technical Expertise Information is Available

Certify Technical

Knowledge Increase Certifications

Employer of Choice Tools to do the job Make application to EOC Submit 2 applicationsB. Francis N/A

Live the SPS Values

Great People

Value of the Individual

Integrity Beyond

Reproach Human Capital

Organizational

Readiness

Understand the

strategy and what

needs to be done

Coordinate BP Certification

Process

Platinum Certification Achieved Lead: BF

Target: 9/1/03

Develop matrix; assign

responsibilities; conduct

regular checkpoints

Objective Result/Deliverable Target & Lead Initiative


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Sample HR Measures

Lagging Measures

Impact ofPriorDecisions

Budget varianceEmployee relationship results

Executive coaching

Employee productivity

Cost per hire by job class

People expense/Revenues

Leading Measures

Guide FutureOutcomes

Employee strategic focusExecutive retention

Retraining/re-skilling

Internal promotion rate

Exit Rate of C Players

Employee relationship factor


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So Why Consider the BSC?

As an HR Professional --

Strategic Thinker

Business Leader

As an organization --

Welcomes change vital culture today

Achieves strategic objectives


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Keys to Success

Educate your Executive and Teams

Devise the right metrics

Follow through to completion

Start smal l! Report immediately

Dont over measure


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Getting Started Customize Your BSC

1. Describe the strategy burningplatform?

Strategy Map2. Measure the strategy

Develop the measures; critical data points

3. Manage the strategy Gather detailed information about the

measure and initiative


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The Successful Scorecard

Is a dynamic process

continues to set higher targets and achieves them

Define jobs strategically from the perspective of where it fits in with the

strategic business goals

Supports joint decision

making about what you do/dont do based on

strategic goals


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What we did in NJ

The Balanced Scorecard Clarified

What we wanted to accomplish

What we are notgoing to do

Volunteer roles

Resources needed

Outcomes expected


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Chapter/State Council Scorecard

Serve the Professional STP

Provide comprehensive information and tools

Help HR professionals develop their knowledge, skills and careers

Build HR communities to exchange ideas, develop professional relationships, and increase

HR knowledge

Advance the Profession ATP

Set the agenda for the HR profession

Ensure HR is recognized for its contribution to business success

Enhance the capability and credibility of the HR profession

Building communities for the exchange of leading-edge business ideas and

The development of professional relationships

Source: SHRM


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Serve the Professional (STP) Is:

Seminars such as Fundamentals of HR, most

white papers, most articles in HRMagazine,

majority of activities and sessions held atAnnual Conference & Exposition and most

other SHRM conferences, certification, most

surveys and most of what the Information

Center responds to currently

Source: SHRM


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Serve the Professional (STP) Is Not

Messages about the value and

contributions of HR to a general businessaudience, articles/activities/information

geared toward the strategic leader

Source: SHRM


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Advance the Profession (ATP) Is:

Helping HR professionals understand their leadershipcapabilities and potential contributions to their organizations,provide them the tools to enable them to fully engage in thebusiness process, and help them advance in their careers.Advance the Profession is also about helping the businesscommunity (and the public broadly) understand thecontributions HR can make to organizational success.

ATP is designed to elevate HR professionals to be or becomebusiness leaders who significantly contribute to organizationalsuccess and are perceived by their non-HR colleagues

especially those in the C-Suiteas such.

Source: SHRM


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Advance the Professional (ATP) Is Not:

Intended to teach HR professionals

about HR fundamentals. It is not to

help or educate HR professionals abouthow to effectively handle day-to-day HR

responsibilities or compliance issues.

Source: SHRM


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Garden State Council

Mission Statement

The Garden State Council serves the professional (STP) and advances the humanresource profession (ATP) in New Jersey by:

Being a chapter resource(Customer - chapters)

Promoting HR Excellence and Standards

(Customer HR Professionals;business community)

Creating opportunity for HR professionals to learn and succeed(Customer HR community current and potential members)

Providing training and development opportunities for chapterand council volunteer leaders(Customer volunteers)

Advocating the value of SHRM membership(Customer chapters, allmembers, potential, business community, volunteers)

Demonstrating the highest ethical professional standards ofoperations(Customer all)


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The GSC Strategy Map

CustomerTo achieve our

vision, how

should we appear

to our customers

Internal

Process

To satisfy our

customers, which

operational

processes must

we excel?

Learning &

Growth

How will we

sustain our abilityto change and

improve?

Financial

To financially

sustain our

Mission, on what

must we focus?

Perspective Strategy

Chapters Members

current/potentialVolunteers

Business

Community

Resource

ToChapters

Resource

ToProfessionals

Resource

ToBusiness

Community

Technology Alignment Recognition Knowledge

Budgeting

Sound

Fiscal

management

Long-Term

Investment

Strategy


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Scorecard Exercise


Strategies High Level Goals A TP or STP

Objectives Measures of action plans Write 1 objective


failure

Identify a measure; is it a

leading or lagging measure?


measure

Set a target

Initiatives Actions taken to achieve

target

May or may not be required

Perspective: Financial / Customer / Internal Process / Learning&GrowthCirc le one


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Scorecard Exercise


Strategies High Level Goals

Objectives Measures of action plans


failure


measure

Initiatives Actions taken to achieve

target

Perspective: Financial / Customer / Internal Process / Learning&Growth


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Resources

The Balanced Scorecard, Kaplan & Norton

Balanced Scorecard Collaborative, Lincoln, MA, www.bscol.com

The Strategy-Focused Organization, Kaplan & Norton

www.BetterManagement.com

The HR Scorecard, Becker, Huselid, Ulrich Measure Like You Mean It, Michael Hammer

The Balanced Scorecard Step By Step: Maximizing Performanceand Maintaining Results, Paul R. Niven

The Human Resources Scorecard, Measuring the Return on

Investment, Jack J. Phillips, Ron D. Stone, Patricia Pulliam Phillips Company Case Studies

Networking


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10/4/03 NYS Leadership Conference 33

Questions?

Bette Francis, SPHR

Strategic Products & Services

973-656-4607

[email protected]

Documents

Balance Scorecard - An Effective Tool