1、The Balanced Scorecard,Michael L. Werner University of Miami Coral Gables, Florida,中国培训师大联盟 www.china-,What is Business Success?,Solid financial performance?,Balanced Scorecard Refocuses Management,Financial perspective,Customer perspective,Internal perspective,Learning and Growth perspective,The Ba
2、lanced Scorecard,Developed in 1992 by Robert Kaplan and David Norton,Kaplan and Nortons Premise,“exclusive reliance on financial measures in a management system was causing organizations to do the wrong things.”,Popularity,Employed by half of Global 1000 (According to Bain & Company),“One of the mos
3、t powerful management ideas ever” (Harvard Business Review),Most requested and #1 in sales at Harvard Business Publishing,The Balanced Scorecard,Originally developed as a measurement tool,Also helps companies manage and implement strategy,The Balanced Scorecard,Based on corporate strategy,A balanced
4、 plan for business,More than a financial plan,(Robert Kaplan and David Norton),Basic Business Strategy,Financial We will ensure that we use our resources and people to maintain financial success.,Customer We will meet or exceed our customers current and future expectations and requirements with high
5、 quality products, reasonable prices and superior service.,Internal We will provide high quality on-time imaging products and services and provide an efficient and effective means to deliver them in a high quality fashion.,Learning and Growth We will attract and retain high caliber people and promot
6、e an environment that develops their interpersonal, business and technical skills and knowledge. We will strive to develop and maintain the best sourcing for our products. We will strive to be aware and on the cutting edge of imaging and business technology.,The Trouble with Strategy,It is unlikely
7、that a poor strategy is the problem,Generally, the problem is implementing strategy,Even if strategy is communicated, employees may not know what to do.,How can the Balanced Scorecard help?,Four Distinct Perspectives,Financial perspective,Customer perspective,Internal perspective,Learning and growth
8、 perspective,Strategy,Translating a Mission into Desired Outcomes,Mission,Core Values,Vision,Strategy,Balanced Scorecard,Objectives,Strategic Initiatives,Strategic Outcomes,Motivated and Prepared Workforce,Effective Processes,Delighted Customers,Satisfied Shareholders,Adapted from Kaplan, Norton,For
9、 Each Perspective,Objectives (Goals),Measures,Targets,Initiatives,Simple Form and Relationships,Source: Kaplan, Norton,Objectives,Concise statements that articulate what the organization hopes to accomplish,Each tied to the companys strategy,Financial Perspective,Overall objective: To succeed financ
10、ially,Customer Perspective,Overall objective: To achieve our vision of how the company should appear to customers,Internal Perspective,Overall objective: To excel at having superior business processes to satisfy shareholders and customers,Learning and Growth Perspective,Overall objective: To sustain
11、 the ability to change and improve (Employee capabilities are a key ingredient to this objective.),Measures,Descriptions of how success in achieving objectives will be measured,Each tied to the companys objectives,Core Financial Measures,ROI/EVA,Profitability,Revenue growth/mix,Cost reduction,Core C
12、ustomer Measures,Market share,Customer acquisition,Customer retention,Customer profitability,Customer satisfaction,Internal Perspective Measures,Process quality measures Time to process an order Number of Returns Defect rates Yield ratios Lead-times Waste, scrap, and rework,Core Learning and Growth
13、Measures,Employees trained per month,Employee retention,Employee productivity,Development and research measures,Number of training programs,Targets,Level of performance or rate of improvement desired for each measure,Each tied to one of the companys measures,Initiatives,Short-term programs and actio
14、nsthat will help achieve the established targets,Each tied to company objectives and measures,Examples of Initiatives,New maintenance program,Upgrade selected equipment,Establish performance benchmarks,New training program,Establish frequent purchase program,Next: An example to help students underst
15、and how the Balanced Scorecard works,A Balanced Scorecard Example,Large camera store,25,000 square feet,$10+ million in sales,Profits unacceptably low,Industry changing due to technology,Basic Business Strategy,Financial We will ensure that we use our resources and people to maintain financial succe
16、ss.,Customer We will meet or exceed our customers current and future expectations and requirements with high quality products, reasonable prices and superior service.,Internal We will provide high quality on-time imaging products and services and provide an efficient and effective means to deliver t
17、hem in a high quality fashion.,Learning and Growth We will attract and retain high caliber people and promote an environment that develops their interpersonal, business and technical skills and knowledge. We will strive to develop and maintain the best sourcing for our products. We will strive to be
18、 aware and on the cutting edge of imaging and business technology.,Achieve the strategy? How do we get there?,With a map,A strategy map,Strategy Map Objectives,Financial Success,Customers impressed with quality productsand services,Leading edge production capabilities,Trained workforce,Attract new c
19、ustomers Retain customers On-time products and services,Well functioning facilities,On cutting edge of technology,Best product sourcing,Financial,Customer,Internal,Learning and Growth,Strategy Map Measures and Targets,Operating income Increase gross margin Amount of operating expenses,Number of new
20、customers No. of returning new customers Number of customer complaints Number of items per invoice,Number of rejected prints Percent of late orders New products and services,Amount of employee training Amount of technology training Sales from new product sourcing,TBD Increase by 20% Zero Increase by
21、 30%,1% 0% 10% Increase,1 Session per month 1 Session per month Increase by 30%,Financial,Customer,Internal,Learning and Growth,$100,000 Increase by 5% Maintain,Measures,Targets,Strategy Map Initiatives,New Price Comparison Report,Monthly sales promotions New Frequent Customer Sales Program Employee
22、 sales and product training program,Operator and lab training program Daily services backlog report New products and services program,Employee training program Technology training program Three purchasing trips,Financial,Customer,Internal,Learning and Growth,Mission,Core Values,Vision,Strategy,Balan
23、ced Scorecard,Objectives,Strategic Initiatives,Strategic Outcomes,Motivated and Prepared Workforce,Effective Processes,Delighted Customers,Satisfied Shareholders,Adapted from Kaplan, Norton,Targets,Measures,Employee Rewards,Operating income,Returning new customers Customer complaints Number of items
24、 per invoice,Rejected prints Late orders New products and services,Employee training Technology training Sales from new product sourcing,Increase by 20% Zero Increase by 30%,1% 0% 10% Increase,1 per month 1 per month Increase 30%,Financial,Customer,Internal,Learning and Growth,$100,000,20% of net in
25、come,Employee Rewards $25,000 Equally to Five Managers,Sales Price Comparison Report,Monthly sales promotions Frequent Customer Sales Program Returning new customers Customer complaints Number of items per invoice,Rejected prints Late orders New products and services,Employee training Technology tra
26、ining Sales new prod. sourcing Three purchasing trips,1 per month Functioning Increase by 20% Zero Increase by 30%,1% 0% 10% Increase,1 per month 1 per month Increase 30% 3,Financial,Customer,Internal,Learning and Growth,Monthly,10%,10% 05% 05% 10%10%,00% 10% 05%,10% 10% 05% 10%,Measure or Initiativ
27、e,Target,Weight,Employee Rewards $25,000 Equally to Five Managers,Sales Price Comparison Report,Monthly sales promotions Frequent customer sales program Returning new customers Customer complaints Number of items per invoice,Rejected prints Late orders New products and services,Employee training Tec
28、hnology training Sales new prod. sourcing Three purchasing trips,$ 2,500 0 0 2,500 2,500,$ 0 2,500 0,$ 2,500 2,500 0 2,500,Financial,Customer,Internal,Learning and Growth,$ 0,No,Yes No No YesYes,Yes Yes No,Yes Yes No Yes,Measure or Initiative,Bonus Amount,Green?,10%,10% 05% 05% 10%10%,00% 10% 5%,10%
29、 10% 05% 10%,Weight,Total Number of managers Amount per manager,$17,5005 $ 3,500,Total,Total Balanced Scorecard Employee Incentives (Assuming Net Income of $115,000),Net income Bonus percentage Total net income bonus Net income bonus per manager Number of managers Measures and initiatives bonus Tota
30、l bonus per manager Number of managers Total bonuses,$115,000 20% $ 23,000 5 $ 4,600 $ 3,500 $ 8,100 5 $40,500,Next: Moving Beyond the Companys Overall Scorecard,Departmental and Personal Scorecards,Each department develops its own scorecard based on the companys overall scorecard.,Each employee dev
31、elops his or her scorecard based on the companys and departments scorecard.,Departmental and Personal Scorecards,Scorecards must be closely aligned with overall company goals and objectives.,Each objective must be aligned.,Each measure must be aligned.,Each Perspective Must be Addressed,Set objectiv
32、es for each perspective.,Set basis for measurement for each objective.,This allows managers and employees to focus on the success of each perspective.,It also keeps them from focusing on one perspective while neglecting another.,Implementing the Balanced Scorecard,The push to implement must come fro
33、m top management.,Managers must buy in.,It takes 15 to 36 months in large organizations.,Possible Pitfalls of the Balanced Scorecard,Senior management not committed,One senior manager tries to build the scorecard alone,Scorecard responsibilities dont filter down,The solution is overdesigned, or scor
34、ecard treated as a one-time event,The balanced scorecard is treated as a systems project,Anthony Atkinson, Robert Kaplan, S. Mark Yong,Suggested Reading,The Balanced Scorecard, Robert S. Kaplan and David P. Norton, HBS Press,The Strategy-Focused Organization, Kaplan and Norton, HBS Press,The Balance
35、d Scorecard Step by Step Paul R. Niven, John Wiley & Sons,Suggested Reading,Just out this year: Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Robert S. Kaplan and David P. Norton, HBS Press,Suggested Internet Surfing,The Balanced Scorecard Collaborative at ,The Balanced Scoreca
36、rd Institute at www.balancedscorecard.org,Free basic online presentation by Paul Niven seminar.aspx?LibraryID=6199,Suggested Internet Surfing,Free netconferences are also available at The Balanced Scorecard Collaborative netconferences/Generally on the fourth Thursday of each month at 11:00 A.M. E
37、T. Next netconference: October 28, 2004,Questions? Comments?,Thank You,Beyond the Scope,The slides that follow provide additional insight into the balanced scorecard.,Handling Initiatives,Inventory current initiatives,Map them to BCS Objectives,Eliminate nonstrategic initiatives,Add new initiatives,
38、Prioritize remaining initiatives,Five Principles of Strategy-Focused Organizations,Principle 1: Translate the strategy to operational terms,Principle 2: Align the organization to the strategy,Principle 3: Make strategy everyones job,Principle 4: Make strategy a continual process,Principle 5: Mobiliz
39、e leadership for change,Anthony Atkinson, Robert Kaplan, S. Mark Yong,Implementing the Balanced Scorecard,Select an architect and form a taskforce.,Develop business strategies,Determine where business units fit into the big picture.,Hold meetings, workshops, and synthesis sessions.,Implementing the
40、Balanced Scorecard,Select and design measures.,Establish targets,Establish initiatives,Build a consensus around strategic objectives.,The Balanced Scorecard and a New Management Processes,New management processes may result from implementing the balanced scorecard.,New Management Processes,1. Transl
41、ating the vision,2. Communicating and linking,3. Business planning,4. Feedback and learning,1. Translating The Vision,To build a consensus around the organizations vision and strategy,To express the vision in terms of an integrated set of objectives, measures and initiatives,Must be agreed upon by a
42、ll senior executives,2. Communicating and Linking,Communicates the strategy up and down in the organization,Links strategy to departmental objectives,Links strategy to individual objectives,Expands on performance measures that focus only on financial performance,2. Communicating and Linking,A way to
43、 ensure that all levels of the organization understand the strategy,A way to ensure that department and individual objectives are aligned with the strategy,Links rewards to performance measures,3. Business Planning,Enables companies to integrate their business and financial plans,Various independent
44、 change programs difficult to integrate,However when goals are set and coordinated using the balanced scorecard meaningful priorities can be set.,Resources allocated accordingly,4. Feedback and Learning,Expands on the traditional financial focus,Can monitor results from three more perspectives,Can e
45、valuate strategy in light of performance in all four areas,Modify strategy to reflect real-time learning as opposed to modifying strategy during the annual strategic plan meeting,New Management Processes,The Balanced Scorecard,The balanced scorecard is more than a performance measurement technique.,
46、Innovative CEOs used the balance scorecard not only to clarify and communicate strategy, but also to manage strategy.,They are using the measurement focus of the scorecard to accomplish critical management processes.,The Balanced Scorecard,Clarify and translate vision and strategy,Communicate and li
47、nk strategic objectives and measures,Plan, set targets, and align strategic initiatives,Enhance strategic feedback and learning,Kaplan/Norton,The End,If you have questions or comments regarding this presentation, please feel free to contact Mike Werner at mwernermiami.edu or by phone at 305-321-1139 .,
