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Balance Score Card Full Color Revisi
Balance Score Card Full Color Revisi
Management
BALANCED
SCORECARD
Balanced Score Card
•
About 35% of Fortune 2000 firms
have adopted a balanced scorecard,
55% of those firms are very satisfied
with it. (R. D. Banker, C. Konstans and S.
Janakiraman; January 2000)
Internal Business
Customer Perspective Perspective
How should we Vision
And At what business
appear to our
customers? Strategy practice must we
excel?
Financial Objectives
Customer Objectives
§
The essence of the BSC is the articulation of
linkages between performance measures and
strategic objectives (Kaplan and Norton 1996).
2
Translating Strategy Into Initiatives
For each perspective:
Strategy
Targets Initiatives
value
q Lagging indicators: Feedback measures
on current performance
•
Should include outcome measures as well as
measures of the drivers of those outcomes
•
Should link all measures with the overall
strategy
IHW 2005 Balanced Scorecard 16
Diagnostic vs Strategic Measures
Diagnostic measures
§ Monitor whether the business remains
“in control”
§ Signal when unusual events occur that
require immediate attention
§ Necessary, but not sufficient, for
achieving long term goals
Strategic measures
§ Articulate a strategy designed for
competitive excellence
§ Evaluate strategies based on new
information about competitors,
customers, markets, technologies &
suppliers
IHW 2005 Balanced Scorecard 17
Financial Perspective
Customizing Measures for the Growth Stage
•
Sales growth rate
•
Sales in new markets
•
Sales to new customers
•
Sales from new products
•
Investment in product development
•
Investment in information technology
•
Investment in employee skills
•
Investment in new distribution channels
Customer Outcomes
Market
Share Customer
Account Profitability
Share
Customer Customer
Acquisition Retention
Customer
Satisfaction
Customer
Satisfaction
Product/Service + +
Value = Image Relationship
Attributes
Efficiency
Effectiveness
Employee Skills
•
Real-time availability
Long Term Information •
Accuracy
Success Systems •
Pervasiveness
•
Satisfaction •
Alignment of incentives with key
•
Retention
Organizational success factors
•
Training
Processes •
Improvement in key customer
•
Capabilities and internal processes
•
Is much more than a collection of indicators
of key success factors.
•
Is a flight simulator, not a dashboard of
instrument dials.
•
Integrates performance measures with a
unique strategy.
•
Incorporates cause-and-effect relationships,
including leads, lags and feedback loops.
Return on
Financial
Capital Employed
Internal Process
Process Quality Process Cycle Time
Customer:
1. Price relative to competitors’ price +7% 7.79% 11.29%
2. Customer satisfaction rating 80% 88.44% 10.55%
3. Sales per square foot of retail space $30,000 $33,090 10.30%
4. Number of credit card customers per store 8,000 8,911 11.39%
Internal Process:
1. Brand recognition rating 80% 87.60% 9.50%
2. Number of stock-outs < 3 times 2.66 11.33%
3. “Mystery Shopper” audit rating 85% 93.47% 9.96%
4. Time to process customer returns < 4 min. 3.54 11.50%
Broaden
Revenue Mix
Customer
Increase Customer Satisfaction Perspective
With Our Products
Instill a Learning
Selling Culture Perspective