1、 Managing Performance With The Balanced Scorecard Discussion Paper,11 April 2002,Contents,Background and IntroductionThe Balanced Scorecard ConceptBenefits of the Balanced ScorecardProposed Approach to Balanced Scorecard Design & ImplementationIndicative Project TimingOur Credentials,Appendix,Busine
2、ss Objectives,The Executive General Manager Of Has Commissioned The Construction Of A Blueprint To Transform ,Adapt to market conditions faster Recognise new connected business environment Segment capabilities true flexibility and two-way scalability Utilise technology to optimally fit and lead the
3、business Reduce fixed cost base,Why Performance Management?,The Blueprint will maximise the potential value of the new Team and provide a framework for infrastructure that supports our Business Objectives, understands that a critical factor to a successful transformation will be the development of a
4、 rigorous performance management system,The Blueprint for Transformation will identify opportunities to address the following needs:,A consistent approach to performance management is critical to the success of the Blueprint for transformation,A Balanced Scorecard approach to performance management
5、will ensure:,Performance measures can be used to drive behavioural change throughout the organisation Will link performance throughout the business and directly align to corporate strategy Achieving commonality of performance measures across the organisation will help to meet the needs outlined in t
6、he Blueprint Will ensure that initiatives are identified and properly tracked,Today, There Are A Number Of Different Methods In Which Performance Is Measured Across ,Group Executive,Manager & Senior Manager,Appointed,Officer,BU1,BU2,BU3,BU4,Executive,General / Chief Manager,General Managers Performa
7、nce System: Value Management Performance Measures: Shareholder; Customer; Employee; Community,Project Management Group Performance System: Performance, Planning Best Practice,Total Headcount 9999,999 HC,999 HC,999 HC*,999 HC,99,999,9,9,99,999,9,999,999,999,999,99,9,9,9,Specialist,99,99,99,99,999,Oth
8、er,9,9,9,9,Performance System: Performance, Planning & Review Performance Measures: Vary according to role,Operations Performance System: Performance Pays Performance Measures: Shareholder; Customer; Employee; Community,Current performance measurements systems are ad hoc and inconsistent,Performance
9、 Measures are not closely aligned to the organisational strategy,Client Specific data removed,The Current Suite Of Performance Measurement Systems Within Make It Difficult To Manage The Business,Performance Measurement is not aligned to organisational strategyLack of key performance indicators and f
10、ew customer focused measures within business processesThere is a mismatch between people and process measurementThe measurement and management of performance is not consistent throughout the organisationPerformance measurement systems dont allow for effective communication across the organisation,A
11、consolidation of existing performance measurement systems through the implementation of an organisation wide performance management system is essential,Uncertainty as to whether we are measuring the right thingsNo balanced approach to performance measurement. What customers value is not defined with
12、in measurement systemsUncertainty as to whether we are measuring the right thingsInconsistent approach to performance measurement. Difficult to get consolidated view of performance. Difficult to communicate performance.Without effective communication may be a lack of unified vision and buy-in to per
13、formance targets* To be validated early on in this project,Possible Effect*,Problem,A Scorecard Is Required To Provide With A Measurement System To Track The Reorientation Of The Business,Performance Measures that are linked to Executive strategy Transparent and consistent performance objectives A s
14、et of measures that can be clearly communicated to all employees of the business A set of measures that will provide complete understanding of what each employee does and how it drives business performance A measurement system that can be extended to all areas of the business A performance system th
15、at can drive the behavioural change required to achieve a customer driven strategy,The reorientation focuses on delivery of value to customers and alignment of resources to execute customer driven strategy. The successful implementation of the blueprint will require a balanced scorecard which provid
16、es:,Contents,Background and IntroductionThe Balanced Scorecard ConceptBenefits of the Balanced ScorecardProposed Approach to Balanced Scorecard Design & ImplementationIndicative Project TimingOur Credentials,Appendix,Feedback system used to test the hypotheses on which strategy is based Strategy dev
17、elopment is a continuous process,Stretch targets are agreed Investments are determined by the strategy Annual budgets are linked to long-range plans,Goal alignment exists from top to bottom Open communication of strategy is basis for employee empowerment,Clarifying and Translating the Vision and Str
18、ategy,Strategic Feedback and Learning,Planning and Target Setting,Communication and Linking,Balanced Scorecard,A Balanced Scoreboard Creates A Strategic Framework For Action,The strategy is the reference point for the entire management process The shared vision is the foundation for strategic learni
19、ng,A Balanced Scorecard Is Not Just A Set Of Measures, Rather A Performance Management System That Drives Value,Illustrative,The Balanced Scorecard creates value by providing a consistent, disciplined approach to link strategy to day-to-day operations,The Balanced Scorecard has four perspectives,The
20、 Balanced Scorecard links Business Objectives and Strategy to Initiatives,Partial Revenue Strategy,Shareholder EVA Revenue mix Revenue growth,Customer Customer satisfied survey Customer retention Depth of relation,Internal Share of segment Product development cycle Revenue from new products Hours wi
21、th customers Cross-sell ration,Learning Employee satisfaction Revenue per employee Strategic info availability Strategic job coverage Personal goals alignment,Increase Customer Confidence in Our Financial Advice,Broaden Revenue Mix,Improve Economic Returns,Understand Customer Segments,Cross-Sell the
22、 Product Line,Develop the Offering,Achieve Employee Satisfaction,Improve Customer Information,Broaden Skills (Financial Planner),Align Reward System,EVA is based on concepts from Stern Stewart,Measures Need To Be Interlinked By Cause And Effect Relationships That Ultimately Drive To Financial Indica
23、tors,A correctly balanced scorecard will link performance through the business to directly align to corporate strategy,The Case For Financial Measures Has Long Been Taken For Granted Whereas Non-Financial Measures Are Often Overlooked,1. Strategy Execution 2. Management Credibility 3. Quality of Str
24、ategy 4. Innovativeness 5. Ability to Attract Talented People 6. Market Share 7. Management Experience 8. Quality of Executive Compensation 9. Quality of Major Processes 10. Research Leadership,40% of portfolio decisions are attributable to non-financial measures The more non-financial information a
25、nalysts use, the more accurate their forecasts Non-financial information is widely utilised as a leading indicator for future financial performance,Source: Cap Gemini Ernst & Young Study, The Measures That Matter.,Understanding & managing non-financial information is a key component of any strategy
26、for long term value creation,In a recent study, Cap Gemini Ernst & Young asked U.S. investors which non-financial measures they value most?, Executive,General / Chief Managers,Operations Senior Managers,Strategic Objectives,Business Objectives,Functional Objectives,Measures,Measures,Measures,Targets
27、,Targets,Targets,Major Initiatives,Initiatives,Activities,Drill Down / Cascading,Performance Measurement Roadmap,Level D, E etc. (Total Headcout 6036)1,To Ensure Alignment, A Top-Level Scorecard Needs To Be Cascaded Down And Across The Business And Its Operations,1. Note: 1) Headcount sourced from P
28、 P&P 3) Ops HC does not include WIB NZ 4) Includes IT Specialists,Contents,Background and IntroductionThe Balanced Scorecard ConceptBenefits of the Balanced ScorecardProposed Approach to Balanced Scorecard Design & ImplementationIndicative Project TimingOur Credentials,Appendix,A Balanced Scorecard
29、Drives Organisational Value.,Benefits,Feature,.And Provides Different Types Of Value,FOR ALMOST EVERYBODY,IN MANY CASES,FOR SOME,Rigorous Measurement System: “Interprets our strategy into a set of measures to track performance.” Aligned Management: “Aligning executives behind decisions needed to hit
30、 goals.” “We had ideas in a shoe box; BSC organized them in a nice structured closet.” Communicated to Organization: “Communicated our strategy better than anything else I have seen.”,Focused on Key Areas: “Consensus to organize behind the key initiatives that drive value.” “Can take business out of
31、 a reactionary mode into a proactive mode.” Clarified Linkages: “Highlights cause-and-effect relationships between objectives; highlights linkages across organizations.” “Highlighted that no function can operate individually.”,Helped Refine Strategy: “Linkage map sessions helped us refine one person
32、s ideas on vision into a common strategy for the business.” “Made us re-think our supply chain strategy from state-of-the-art to customer-friendly.” “Comparing functional strategies with inside/outside aspirations helped refine our strategy; tracking market data will drive better strategy formulatio
33、n.” “Becoming the framework to discuss strategy; replacing Long Range Plan.”,Types of Value,Contents,Background and IntroductionThe Balanced Scorecard ConceptBenefits of the Balanced ScorecardProposed Approach to Balanced Scorecard Design & ImplementationIndicative Project TimingOur Credentials,Appe
34、ndix,To ensure strategy alignment, the Balanced Scorecard is cascaded down the business over 3 years,Design,Implement,Design,Implement,Design,Implement,Sep 02,Sep 03,Sep 04,Group Executive,Manager & Senior Manager*,Appointed,Officer,General / Chief Manager,Specialist,Other,All Staff,123*,456,78+,Lev
35、el,Our Proposed Approach for Year 1 Can Be Split Into Three Distinct Phases: Design, Implementation And Refinement,Scorecard Design Phase (6-8 Weeks),Scorecard Implementation Phase (10-12 Weeks),Transition Stream,Scorecard Refinement Phase (Ongoing),1 Sept,Communications plan Change Agent Network Tr
36、aining,Project Management Stream,Budget & Resource Mgt & Reporting Schedule Mgt Resource Mgt,Management Stream,Improvement / Review / Refinement Day-to-day management of BSC Training Post 1 Sept,Go Live,Major Workshop,A number of smaller workshops and focus interviews will be used throughout this ap
37、proach in conjunction with major workshops* Accelerators Such as ASE and ADC may be utilised where appropriate,Provide with a set of key value drivers for investments/activities and a basis for determining what should be tracked/measured to effectively gauge business performance and contribution to
38、enterprise value Identify those measures that best relate to key value drivers, reflect business objectives, and support business strategy Assess the gap between current measures and desirable measures Determine what is required, in terms of data and reporting processes, to support value scorecardVa
39、lue-driver maps outlining cause and effect relationships and view of how they cascade through and its key businesses Template for Scorecard and high-level scorecards for key entities Map of integration points for performance reporting High-level implementation plan,Objectives:,Deliverables:,Each Pha
40、se Will Deliver Specific Deliverables,Scorecard Design Phase,Scorecard Implementation Phase,6 8 Weeks,8 - 10 weeks,Phases:,Timings:,Communicate Balanced Scorecard to the rest of the organisation. Cascade Executive / GM Scorecard and Develop functional balanced scorecards Development and Implement pr
41、ocesses for ongoing management of Balanced Scorecard system Integrate balanced scorecard with technology enablers to automate processes Integrate the Balanced Scorecard into the business planning process Integrate Initiative management into the Balanced Scorecard process,Cascaded Functional Scorecar
42、ds Communications Plan Integration plan for automation with existing technology enablers Procedures manual for managing the Balanced Scorecard (Reporting, Review cycles),The end game for s performance management solution enables a high performance culture,Group performance measures aligned to strate
43、gy Standard approach to performance management Consolidated dashboard view of group performance Efficient, accessible, transparent view,Executive performance measures aligned to strategy Equitable performance based rewards,Facilitates behavioural change Encourages and rewards high performers Provide
44、s focus for initiatives to drive value,A range of competencies are required to deliver the Balanced Scorecard,Note: Subject to detailed scoping; not all competencies will require full time roles for the full duration,Contents,Background and IntroductionThe Balanced Scorecard ConceptBenefits of the B
45、alanced ScorecardProposed Approach to Balanced Scorecard Design & ImplementationIndicative Project TimingOur Credentials,Appendix,We believe that we will complete the engagement in an 18 week timeframe*,*Assuming all required internal documentation (incl. entity strategies and current management rep
46、orts and performance metrics) is readily available, plus key internal interviews and any working sessions can be arranged promptly,* Please note: This proposed approach does not presently include:Quantitative evaluation of value driversStrategy evaluation or developmentProcess redesignSystem changes
47、/tracking devices/business intelligence analyticsImplementation. Scorecards will be designed for key reporting entities, not individuals or sub entities,High Level Indicative Plan,Weeks,1,2,3,4,5,6,7,8,Project Kickoff,Phase 1: Scorecard Design,0,9,10,Phase 2: Scorecard Implementation,12,13,14,15,16,
48、17,18,11,Contents,Background and IntroductionThe Balanced Scorecard ConceptBenefits of the Balanced ScorecardProposed Approach to Balanced Scorecard Design & ImplementationIndicative Project TimingOur Credentials,Appendix,Select Australian Credentials,Select International Credentials, Banking Corpor
49、ation Assisted in the development of a balanced scorecard for its Institutional and International Business Group Facilitated series of workshops to educate employees and derive scorecard informationAxa Australia Development of Finance Function balanced scorecardBHP Developed balanced scorecards with
50、in its business units Aligned scorecard with corporate shared services programmeSimplot Created and cascaded multiple balanced scorecards for corporate and business unitsSouthcorp Created and cascaded multiple balanced scorecards for corporate and business unitsTelstra Aligned scorecard with corporate EVA programme, including cascading of higher level value drivers into scorecard objectives and measures,
