Executive Development Programs
Program 8: Developing Balanced Scorecard & Strategy Map
The Balanced Scorecard has been developed by Kaplan and Norton4 as a system of linked measures, targets and initiatives that collectively describe the strategy of an organisation and how that strategy can be achieved. It provides a process to bring about the alignment and commitment to strategy for a management team and people within the organisation as a whole5. It provides a framework for setting a performance measurement framework centred on four ‘perspectives’, Financial, Customer, Internal Business Process and Innovation, Learning and Growth6. (Figure 1)
Figure 1. The Balanced Scorecard (Kaplan and Norton)
A Balanced Measurement System and Strategy Maps Drive Sustainable Strategic and Operational Success
“What gets measured gets done.” It’s a business axiom you’ve heard a thousand times. Unfortunately, the things most companies measure (short-term financial performance and local productivity) don’t determine long-term success in a competitive marketplace.
Linkage is the key to transforming the Balanced Scorecard from a measurement tool to a management tool. Using traditional management techniques, process improvement initiatives can become islands unto themselves: projects that have local impact but do not advance corporate strategy.
The Balanced Scorecard process creates maps that define how strategic objectives interact to deliver desired results. These strategy maps can be expanded to fully define and communicate how strategy should be deployed and implemented in your organisation via strategic process improvement projects. Using Strategy Maps, you will be able to:
- Analyse strategic opportunities
- Build strategy maps to capitalize on these opportunities
- Use your maps and scorecard to manage strategy
The key objectives of the program are:
- Synthesising and integrating strategic direction, accountability, and commitment levels to focus resources and prepare an implementation plan.
- Structures primary elements of performance management systems
- Implementing a balanced scorecard solution for monitoring how effectively strategy is executed in your organisation.
- Providing a comprehensive platform for managing, aligning and monitoring initiatives and projects
- Strategically aligned human resources processes (recruiting, performance appraisal, development/training and succession planning)
- Introduction to the Balanced scorecard (BSC).
- Aligning the action plans on strategy with the balanced scorecards.
- The four perspectives: Financial, customers, processes, learning and growth.
First Perspective of BSC: Financial Performances
- Expectations of the company’s shareholders.
- Financial performance indicators measuring the profitability of the company that even the non-financial people should know. Annual financial indicators.
- Criteria for investment project evaluation. Importance of cash-flow.
Second Perspective of BSC: Customers
- Customer-oriented performances.
- How to keep the loyalty of customers.
- Developing Metrics for Customer Loyalty
- Participants are invited to express their view on the new trends of marketing.
- Major action plans to be undertaken in priority.
Implementation of the Balanced Scorecard Method – The Strategy Map.
- Developing the Strategy Map.
- Cascading the Balanced Scorecard.
- Bridging strategic planning and day-to-day activities. Examples.
In Working Groups of 3 participants works on the implementation of the first perspective (finance) and the second perspective (Customers) of the Balanced Scorecard method.
Third Perspective of BSC: Internal Processes
- Processes Reengineering of Human Resource.
- Using Technology such as Intranet for implementing BPR (Business Process Engineering).
- What it is and what it means. Integrated marketing approach.
- Examples of processes and applications with Intranet.
Fourth Perspective of BSC: Learning and Growth
- Staffing issues and Organisational structure
- Skills requested in the new environment.
- Market driven management. Permanent learning companies.
- Competencies requested for delivering new services in the new environment.
Integrating the BSC and Strategy Map
The final session will focus on integrating the BSC and Strategy Map concepts successfully within the participant’s organisation.
Summary and Personal Development Plan
Action Plan for the Next 90 Day
4Kaplan, Robert S., Norton, David P., The Strategy-Focused Organization. (Harvard Business School Press)
5Kaplan, Robert S., Norton, David P., Having trouble with your strategy? Then map it. (Harvard Business Review, September –October 2000)
6Kaplan, Robert S., Norton, David P., Translating Strategy into Action, The Balanced Scorecard (Harvard Business School Press)