WORKSHOP ON:

CASCADING BALANCED SCORCARD

DEVELOPING DEPARTMENTAL STRATEGY MAP

JAKARTA, 13-14 MARCH 2015

 WORKSHOP OUTCOME
Pada akhir workshop ini, peserta akan mendapatkan
kemampuan untuk:
• Mehamai konsep balanced Scorecard
• Memahami peta strategi level perusahaan yang terdiri dari sasaran-sasaran
strategis yang terukur dalam bentuk KPI.
• Melakukan cascading menurunkan peta startegi perusahaan menjadi peta
strategi departemen.
• Memahami konsep Critical Success Factors dan inisiatif strategis di level
departemen.
• Memahami tahapan pengembangan dan implementasi BSC di perusahaan

2
 Workshop Outlines
BALANCED SCORECARD IMPLEMENTATION

DAY ONE

• Registration & Introduction (08.30-09.00)

• Challenge of Managing Business & Organization (09.00-10.00)
• Performance Management (10.30-12.00)
 Strategy execution model
 Performance measurement model
 
• Developing Strategy Map (13.00-14.30)
 4 Perspectives (Lead & Lag indicator)
 Strategic objective
 
• How to Set Strategic Measurement (15.00-16.30)
 Key Performance Indicators & Target

3
 Workshop Outlines
CONTROLLING BUSINESS & COMPANY

DAY TWO

• Day One Review (08.30-09.00)

• Hybrid Cascading Process (09.00-12.00)
 Top-down approach
 Bottom-up approach

• Strategic Initiative & Activity Plan Development (13.00-14.30)

 Critical Success Factors
 Strategic Initiatives
 Activity Plan
 
• Dashboard Management & Strategy Execution Cycle (15.00-16.00)
 Overview of Transformer
 Management Review

• Closing (16.30)
1. Challenge of Managing Business & Organization
Peter Senge
Sustainable high performance of a company takes three imperative
processes

People Process
(Empowering and Modeling)

EXECUTION
Perspiration : 99 %
Strategy Process
(Pathfinding)
Inspiration : 1 %

Operation Process (Synchronizing)

Source : “ Execution. The Discipline of Getting Things Done ” , Larry Bossidy & Ram Charan, 2002

7
 ROLE PLAY
8
 Relationship of Vision, Strategy, Action Plan & Budget

Vision A desired future outcome of an organization

Leadership
Strategy General guideline of how to achieve vision

Balanced Scorecard

Action Plan Specific Steps to implement strategy

Management

Budget Financial resources needed to implement strategy

Adapted from: Leading Change, John P. Kotter

9
 VISI, MISI, VALUES

VISI : Defining “the destination” of your Organization

Keadaan organisasi yang diharapkan terwujud di masa
depan

MISI : Defining “WHO” your organization is & “WHAT”

you do
Alasan keberadaan suatu organisasi

“Sekumpulan aktivitas yang dipilih oleh suatu

STRATEGI : perusahaan dalam rangka menghasilkan nilai-
nilai pelanggan yang spesifik serta berbeda atau
lebih baik dibandingkan dengan pesaing.”
10
VISI, MISI, STRATEGY

ATT Group Vision

To be an icon in logistics industry

ATT Group Mission

1. To provide the world class integrated logistic services in the most effective ways to
satisfy our customers
2. To create added value to our customers, shareholders, employee and partners by
continuously improving productivity
3. To contribute to our nation in developing the most efficient national logistic
operation in the country

11
VISI, MISI, STRATEGY

Strategies
1. Improve competitive edge through achieving world class core competency
2. Promote a flexible and global oriented corporate cultures that encourages
innovation and continuous learning
3. Provide the best value for customers

12
WHAT IS STRATEGY

STRATEGY : It is a deliberate process of choosing a set of

activities differently from competitors, in order to deliver a
unique mix of value

Strategi
“Sekumpulan aktivitas yang dipilih oleh suatu perusahaan dalam
rangka menghasilkan nilai-nilai pelanggan yang spesifik serta
berbeda atau lebih baik dibandingkan dengan pesaing.”

Manajemen Strategis
“Seluruh keputusan yang diambil dalam memilih strategi DAN
mengimplementasikannya”

13
By Michael Porter
DEFINITIONS: STRATEGY &
COMPETITIVENESS
Create

Superior
Value
Added
Sustain Capture

Strategy: A course of action for creating,

capturing and sustaining superior value
14
By Robert Davis
 STRATEGY FORMULATION & STRATEGY EXECUTION
15
… Those who implement strategy are often different from those who formulated it.
Care must be taken to communicate the strategy and the reasoning behind it.
Mission Environment Otherwise, lack of understanding may lead to flawed execution…
Objective Scan

Strategy Execution

Strategy Formulation Strategy Implementation Control and Evaluation

Strategy
Strategy Strategy
Strategic Planning Formulation
Description Reporting
& Modelling

Operational Initiative Initiative

Planning Rationalization Management
Strategy
Reporting
Financial
Financial Planning Planning &
Reporting

Talent
Incentive Planning Management
 BARRIERS IN IMPLEMENTING STRATEGY
16
Vision Barrier

STRATEGY FOCUSED ORGANIZATION

Only 5% of the workforce
understand the strategy
Barriers to Strategy Execution
People Barrier
Only 25% of managers have Successful
Only 10% of
incentives linked to strategy
organization Collaborative
execute their In Strategy
strategy Management Barrier Implementation
85% of executive teams spend
less than one hour per month
discussing strategy

Resource Barrier
60% of organization don’t link
budgets to strategy

Chart adapted and modified from material developed by Robert S. Kaplan and David P. Norton
 Managing Strategy & Operation

Managing strategy Success of managing strategy =

did not work (theoritical)

Sustainable high performance company takes

successful managing strategy & managing
operation

Managing operation Success of managing operation

= a matter of luck
Source : “ The Execution. Premium” , Robert Kaplan & David Norton, 2008

17
 Characteristic of Strategy & Operation

Long Routin
Term

Holistic Sectoral

Priorities
Detail

Strategic Operational 18
ORGANIZATIONAL CHANGE
Vision Strategy Incentives Resources Action Plan Change

Strategy Incentives Resources Action Plan Confusion

Vision Incentives Resources Action Plan Anxiety

Gradual
Vision Strategy Resources Action Plan Change

Frustration
Vision Strategy Incentives Action Plan

Not
Vision Strategy Incentives Resources Implemented
 ROLE OF THE BALANCED SCORECARD
20
Mission Mission
Why we exist Why we exist
Values Values
What’s important for us What’s important for us
Vision Vision
What we want to be What we want to be
Strategy Strategy
Our game plan Our game plan
The Balanced Scorecard Is A Bridge To Close That Gap

The Balanced Scorecard

Organizations Often Have A Gap Implementation and Focus
Between Strategy & Action Strategic Initiatives
What we need to do
Personal Objectives
What I need to do
STRATEGIC OUTCOMES STRATEGIC OUTCOMES
Efficient & Efficient &
Satisfied Satisfied
Effective Effective
COMMUNITY COMMUNITY
PROCESSES PROCESSES
Motivated & Motivated &
Delighted Delighted
Prepared Prepared
CUSTOMER CUSTOMER
WORKFORCE WORKFORCE
 Individual, team, and divisional scorecards link to the
corporate scorecard providing a strategic line of sight
System Thinking of Strategy

i g ht
of S
Objectives Metrics Targets

Financial

Line Customer

ic
a teg Internal

Str
Processes

es
Objectives Metrics Targets
Level of Strategy

d
Financial

i
Learning

rov
and
Knowledge

P
Customer

rd Corporate
re ca Internal
Processes

c o Balanced
dS
Support Group Scorecard Team A Scorecard

Scorecard
e
Strategic Objective Measure Control Store Costs Team Measures Learning

c
• Reduce Paint Cost  Current wall covering and

n
replaced with textured paint
Knowledge
F2 Control Store  Cost psf by
• Design Easy Assembly Fixtures

a
alternative
• Reduce Energy Consumption  Cost of fixtures

Bal
 Utility cost
Cost division
Customer
Partnerships Team Measures

Division
• Develop Joint Lighting Program
C4 Customer  # of • Communicate better with RMs &


Light cost
Customer feedback
DMs on construction issues
Partnership cooperative / • Increase travel with operating
divisions to recently opened
 Number of trips with the
Division
productive stores  All members work in

Balanced
• Have all members work in store store
effort

Construction

Scorecard
Team Measures
Corporate Measures Scorecard Business Unit Measures Individual Goals Excellence
I4 Construction  Time / quality • Write contracts 2 weeks prior
to scheduled construction start
 Contract schedule vs.
plan
1993 1994 1995 1996 1997 1993 1994 1995 1996 1997 And Near Term Action Steps
Targets Financial Targets 1 Excellence and cost • Identify cost savings
 Documented cost
savings
100 120 160 180 250 • Earnings
.
standards met
• Net Cash Flow
100 450 200 210 225 • Overhead & Operating Expense L4 Optimize Optimize People
 % of people Team
100 85 80 75 70
People Resources Measur
Targets Operating Targets 2
. Resources qualified for • Promote cross-training  Number of cross-training
es
assignments
100 75 73 70 64 • Overhead & Operating Costs  Assignment in different
100 97 93 90 82
•
•
Finding & Development Costs key positions • Work in different stores
stores
Total Annual Production
100 105 108 109 110 (Indexed: 1993=100)

3
Corporate Objectives Individual Measures .

• Double our value in 10 years. 1.

• Increase our earnings by an 2.
average of 20% a year 3.

Team Scorecard
• Achieve an internal rate of 4. 4
return 2% above the cost of 5. .
capital.
• Reduce our overhead &
operating costs by a further
30% by 1997.
• Reduce our 5-year average Name:
finding & development costs If we can achieve all these business 5
by 20%. objectives, we will be a top quartile Location: .
competitor
• Reach the top quartile of
industry profitability by 1997.
• Increase production by 10%
by 1997.

Individual
Scorecard

Number of People
21
 BALANCED SCORECARD:
DEFINITION
Balanced Scorecard is a strategic performance management system that
enables Organization to translate its vision, mission and strategy into a set of
measurable actions.

Utilizing a “dashboard” that visualizes financial and non-financial measures,

the management uses the Balanced Scorecard to monitor organizational
performance and to manage strategy implementation.

Balanced Scorecard is also used to communicate the strategy implementation

to the stakeholders, that are the management, employee, government and
society.

22
 BALANCED SCORECARD

Fungsi Balanced Scorecard:

1. Menterjemahkan strategi menjadi tindakan operasional yang

terukur (strategy management)

2. Menilai kinerja operasional dan kinerja individual apakah

sudah sesuai dengan strategi yang ditetapkan (performance
management)

3. Mengkomunikasikan dan menyelarakan kegiatan taktis unit-

unit kerja dalam organisasi (alignment management)
BALANCED SCORECARD BUKAN ALAT UNTUK MERUMUSKAN STRATEGY
23
 Balanced Scorecard Perspectives
The Balanced Scorecard Model* provides a holistic approach to performance measurement by supplementing
the traditional financial measures with three additional perspectives: customer, internal business process, &
innovation and learning:
Look back

Financial
“To succeed financially, how should we
appear to our shareholders?”

Look inside out Look outside in

Customer
“To achieve our vision, how Vision Internal Business Process
should we appear to our “To satisfy our shareholders &
& customers, what business processes
customers?”
Strategy must we excel at?”

Look ahead
Innovation & Learning
“To achieve our vision, how will we
sustain our ability to change &
improve?”
* Source: Robert S. Kaplan and David P. Norton, “Using the Balanced
Scorecard as a Strategic Management System,” Harvard Business

24
Review (January-February 1996)*
THE BALANCED SCORECARD IS A FRAMEWORK

Shareholder/Stakeholder Perspective

"To succeed financially, how should we appear

to our to our stakeholders?”

Customer/Client Perspective
Outcomes "To achieve our vision, how should we serve
our customers?”

Internal Perspective

Drivers "To satisfy customers and stakeholders, which

capabilities and processes are critical?”

Employee Perspective

"To achieve our vision, how will we sustain our

ability to learn, change, and improve?”

25
 Crowd $$$$
Numbers

Sponsor
Win Rate Interest
1 in 4 over 16 yrs

Attack Defence

Fitness Sliding Tackle

Disciplined
& Talented
Players Right Modern
Coaches Facilities
Results
Financial & Customer Crowd $$$$
Numbers

Sponsor
Win Rate Interest
1 in 4 over 16 yrs

Processes Attack Defence

Fitness Sliding Tackle

Infrastructure
People Disciplined
& Talented
Players Right Modern
Coaches Facilities
 Vision .............................................................................

Strategies

Strategy Map Measurement Action Plan

Objectives Measure Target Initiatives Budget

Financial
Perspective

Customer
Perspective

Internal
Perspective

Learning &
Growth
Perspective

28
STRATEGY MAP, KPI AND INITIATIVE

29
Source: Strategy Maps, by Robert S. Kaplan & David Norton
2. Strategy Maps
 WHAT A STRATEGY MAP IS
31
• Foundation of the balanced scorecard

• Visual map showing key linkages

• Typically a flowchart
• Or mindmap

• Helps outlines overall strategy

• Try to divide into Perspectives

• Customer
• Business Processes
• Learning & Growth
• Financial
 KEY BENEFITS OF STRATEGY MAPS
32
• Articulates how the organization creates value for its constituents and
legitimizing authority
• Displays key priorities and relationships between outcomes (the
"what") and performance enablers or drivers (the "how")
• Provides a clear view of "how I fit in" for sub-organizations, teams,
and individuals
• "Cascading the scorecard throughout the organization, and clearly
mapping the various units and functions back to the organization or
agency-wide map is critical to leveraging and ensuring alignment"
 KERANGKA KERJA
PENENTUAN OBYEKTIF PELANGGAN

Pangsa Pasar
GROWTH HARVEST

Akuisisi Profitabilitas Retensi

Pelanggan Pelanggan Pelanggan

Kepuasaan
Pelanggan

Product Leadership VALUE

PROPOSITION
Operational Excellence

Customer Intimacy
STRATEGIC THEME

Customer Value
Proposition

Product Leadership Operational Excellence Customer Intimacy

• Excellent Product • Low Costs, High-Quality • Customization
• Speed to Market • Excellent Service • Deep, Long-Term Relationship

• Unilever • Wings • Levi-Strauss

• Microsoft • Carrefour • DHL
• Intel • Dell • Xerox/Astra
• Sony • Toyota Graphia
• Nike • Postal Office

34
 F1. INCREASED
PROFIT F1.1 % Operating Profit
Financial F1.2 % Net Profit
F2. OPTIMIZED F4. Optimized
TOTAL ASSETS Cost
F3. INCREASED F4.1 % Genex realization
F2.1 % asset growth SALES F3.1 # Sales F4.2 % Direct operating Cost
F2.2 total asset F3.2 % Sales growth realization
C1.1 % repeat order ocean, domestic, PLI freight biz
C1. Achieved Customer C1.2 % repeat order air freight biz
Customer Loyalty C1.3 % repeat order customs broker
C1.4 % repeat order project biz
C2. Increased market
share C3. Achieved
C2.1 # industry Customer
C2.2 % market share air freight biz Satisfaction
C3.1 Customer satisfaction index
C2.3 % market share logistic biz

Internal Business IB6. Ensure

IB1. Build
Process quality of serviceIB6.1 # customer lost
Strategic alliances
IB1.1 # office joint operation and Networking IB5. Maximize IB6 2 # customer claim
IB1.2 # MoU with partner Asset Utilization
IB5.1 % of idle asset
IB10.1 % of sales call & capacity IB9.1 % tract & trace report ontime
visit IB9.2 # IT webbased application
IB2. Balancing
IB 10.2 % customerIB10.
active IB9. Improving
Business Portfolio
Improving proactive alert to
IB2.1 Ratio Exp vs Imp customer customers
IB2.2 Ratio air : ocean : logistic relationship
IB2.3 # MNC Customers IB3. Develop IB7. Improving
IB2.4 # projects biz prudent financial service level of
management and total logistic IB11.
IB8. Improving control Implement Risk
solution
vendor IB3.1 # bad debt IB7.1 # product availability Management
IB4. Implement
relationship IB3.2 % cash flow IB 7.2 % business outsources IB11.1 % risk
IB3.3 % on time financial report effective
IB 7.3 # IT based services mitigation
IB8.1 # qualified vendor marketing IB11.2 % audit on time
IB4.1 % mkt program executed

LG1. People LG2. Management LG3. Enliven

Development Information Corp Culture,
System Values & Ethics
LG1.1 % training execution based on plan LG3.1 % employee turn over
Learning & Growth LG2.1 % system dev ready based on plan
LG1.2 % employee with high performance LG3.2 # fraud
LG2.2 # process IT based automation
LG1.3 % Career path fulfill ontime LG3.3 Employee Satiscation index
3. Developing Key Performance Indicators
37
 What is KPIs

Key Performance Indicators, help an organization define

and measure progress toward organizational goals.

Once an organization has analyzed its mission,

identified all its stakeholders, and defined its goals, it
needs a way to measure progress toward those goals.

Key Performance Indicators are those measurements.

38
 GUIDELINES IN SELECTING A KPI
39
• KPI must be well-defined and doesn’t lead to ambiguity or multi interpretations.

• KPI must be as SMART as possible: Specific, Measurable, Agreeable, Realistic,

and Timebound.
• KPI must have data that can be acquired on regular basis.
• KPI must measure areas that are within our influence (in some cases, when level of
influence is very low yet attention is needed, the indicator is called: monitoring
KPIs which would have 0% weighting).
• Limit the total number of KPIs at a reasonable level. Typically, at Company Level,
we need around 15 to 25 KPIs.
• The cost to identify or to monitor a KPI should not exceed the value gained from
the measurement of the KPI.
 40 Three Types of KPI:

1. Direct KPI:
• This KPI is a ideal measurement;
• Ideally/ exactly reflects the goals that should be achieved by SO.
• Example:
employee satisfaction rating is a ideal measurement to measure level of
employee satisfaction in an organization.
 41 Three Types of KPI:

2. Indirect KPI:
• This KPI is next close to Direct.
• Though Indirect KPI doesn’t ideally reflect achievement of an SO, but it supports
an SOs achievement.
• Indirect is used when it is difficult or not cost effective in gathering data of Direct
KPI.
• Also, It is essential when measurement process of Direct KPI is done only on
annual basis; in this case usage of more regular (quarterly, monthly)
• Indirect KPIs may be needed as early warning indicators.
• Example:
employee satisfaction rating is measured once per year; thus we may need Indirect
KPI in identifying number of employee complaint on monthly basis.
 Three Types of KPI:
42

3. Initiatives KPI:
• It measures the necessary process in achieving an objective;
• but doesn’t measure the actual achievement of the objective.
• Example:
number of training is an initiatives KPI which measures a process in
improving employee competency.
Number of training is an ‘early warning indicator’ for employee
competency improvement.
43
• INDIRECT KPIS MEASURE LIMITED ASPECTS OF THE STRATEGIC OBJECTIVE;
• INITIATIVES KPIS MEASURE EFFORT

Strategic Objective:
Improved Customer Satisfaction

1. Direct KPI:
Customer Satisfaction
Index from a Survey

2. Indirect KPI:
Customer Complaints

3. Initiatives KPI:
Number of Customer gatherings
 KPI Selection

Strategic
Objective

Ideal Indicators
KPIs
(All Aspects
Achieving (Direct)
Measure Covered)
Results

KPIs Next Best Indicators

(Indirect) (Limited Aspects)

Working Hard
Measure KPIs Measures of Outputs,
Activity (Initiatives) Activities & Inputs

44
45 KPI DICTIONARY
4. Target Setting
GUIDELINES FOR TARGET SETTING

1. Target should be CLEAR = explaning WHAT

→ S pecific
→ M easurable
→ T ime-bound

2. Target should be ACCURATE = explaning WHY

→ A greeable (between you and superior/team)

→ R ealistic (achievable, yet challenging)
→ C ontinuously improve

47
SIGNS OF KPI GAMING

ONLY “EASY” MEASURES ARE BEING

REPORTED – Mainly activity measures
TARGETS ARE ARTIFICALLY SET LOW –
Making them easy to achieve and show Green
Traffic Lights

48
5. Cascasding
THE BALANCED SCORECARD HELPS ORGANIZATIONS
50
TO MANAGE STRATEGY IMPLEMENTATION AT MULTIPLE LEVELS
 THE PROCESS OF “CASCADING” CREATES SYNERGY.
IT MUST BE BASED ON A CLEAR UNDERSTANDING OF THE
51 CORPORATE ROLE.
Scorecard Cascade

The Balanced Scorecard aligns priorities throughout the enterprise.

 LANGKAH MEMBANGUN STRATEGY MAP (PETA STRATEGI)
PADA LEVEL DEPARTEMEN

TOP DOWN APPROACH BOTTOM UP APPROACH

1 Pahami dengan baik Peta Strategi
Corporate berikut dengan KPI
untuk masing-masing Sasaran
3 4
Strategis Pahami dengan baik
Pahami dengan baik Misi hasil langkah ke-3
Departemen dan buatlah sasaran
2 Identifikasi pihak-pihak yang strategis & KPI yang
berkepentingan (Stakeholders) dapat menjawab
Identifikasi setiap Sasaran Strategis baik internal maupun eksternal output yang
terhadap keberadaan diharapkan oleh
& KPI pada Peta Strategi Corporate Stakeholders
Departemen beserta harapannya
yang menjadi tanggung jawab terhadap Departemen Departemen
Departemen dalam mendukung Identifikasi Output Departemen
tercapainya setiap Sasaran Strategis
Corporate (Beri Tanda Bintang untuk
setiap Sasaran Strategis yang dipilih)

5
Kombinasikan Langkah ke-2 dan Ke-
4 sehingga menjadi PETA STRATEGI
Departemen

52
 ELEMEN-ELEMEN DARI
SUATU PERNYATAAN MISI YANG EFEKTIF

An IT Unit’s Mission:
To provide world-class technology services
to the end-users in order to support the delivery
of quality information and to enhance the Elemen-elemen Misi yang Efektif
effectiveness of the decision-making process.
• Menguraikan fungsi utama organisasi

A Learning Centre’s Mission: • Mengidentifikasi “customer” utama

To catalyst transformation • Menjelaskan outcome yang diharapkan oleh

for world-class Securindo by implementing “customer”
best-practice development and performance
management practices that creates a strategy
and performance focused culture.

53
 MISSION STATEMENT

• Bagian Keuangan terdiri dari 4 (Empat) Seksi :

SI
1. Seksi Treasury

R A
T
2. Seksi Utang Piutang
3. Seksi Kas

U S
IL
4. Seksi Pajak

MISI BAGIAN KEUANGAN :

Memaksimalkan kepentingan stakeholders yang meliputi :
1. Mengelola dana dari sumber-sumber intern dan extern
2. Mengelola anggaran2 oleh operasional Kantor Pusat beserta Cabang2
3. Mengelola surplus dana yang tersedia untuk ditempatkan dalam investasi
4. Mengelola dan membayar tagihan ke supplier
6. Melakukan rekonsilliasi piutang dengan pihak terkait
7. Melakukan perencanaan perpajakan
8. Melaksanakan setiap kebijakan perpajakan yang ditetapkan pihak regulator.

54
 Stakeholder Identification

Internal Stakeholders: External Stakeholders:

• Komisaris • Pemegang Saham
• Direksi • Ditjen Pajak
• Komite Audit • Bank
• Dept Operasional • Consultant
• Dept Marketing • Lawyer
• Dept Umum • Supplier
SI
• Dept IT • Pelanggan
R A
• Dept SDM
ST
• Cabang
U
IL
55
 Matriks Output dan Ekspektasi Stakeholder Unit HR
No. Stakeholder Ekspektasi Output

1 - Unit-unit lain Terpenuhinya kebutuhan karyawan Karyawan baru

baru secara tepat, baik dari segi
kuantitas, kualitas maupun lead-time
rekrutmen
2 • Seluruh • Penilaian kinerja dan perencanaan • Pedoman penilaian kinerja

i
karyawan karir yang fair and accountable dan perencanaan karir

s
• Dewan • Terlaksananya sistem yang mampu • Karyawan secara berkala

a
Direksi mendorong pengembangan menjalani penilaian kinerja

tr
kapasitas individual dan sekaligus

s
sinergis dengan peningkatan kinerja

lu
organisasi

3 • Seluruh
karyawan
• Dewan
I
Tersedianya informasi HR yang
terpadu, user friendly dan membantu
proses pengambilan keputusan
Informasi mengenai aspek HR
di perusahaan

Direksi strategis HR serta berperan dalam

meningkatkan efisiensi dalam
pengelolaan data administrasi SDM.

4 • Seluruh Terlaksananya sistem reward yang • Pedoman pemberian reward

karyawan kompetitif, fair, dan selaras dengan • Merit-based reward
• Dewan hasil kinerja individual dan organisasi
Direksi
6. Identifiying CSF and Strategic Initiatives
STRATEGY MAP, KPI AND INITIATIVE

58
Source: Strategy Maps, by Robert S. Kaplan & David Norton
59THE PURPOSE OF OBJECTIVES,
MEASURES,
TARGETS AND INITIATIVES
 CSF EXAMPLE
60
 STRATEGIC INITIATIVES
61
• New STRATEGIC PROJECTS identified during the scorecard
development process
• Prioritized and ranked by: potential alleviation of organization pain, cost
and time to implement, benefits and time to realize the benefits
• Initiatives should be mapped back to one or more strategic objectives to
ensure strategic relevance
• Accountability at the Leadership Team Level
• Clearly Defined A Budget, Start and Stop Dates, Committed Resource
Allocation, and Progress Milestones
• Dependencies and sequencing considered
 Indikator dan Inisiatif Strategis Unit HR

Kembangkan
ketrampilan Mengimplementasikan Mengembangkan kompetensi
Integrated HRIS karyawan internal Unit HR
strategis

Indikator Kinerja Utama: Indikator Kinerja Utama: Indikator Kinerja Utama:

• % karyawan yang tercakup • % kemajuan implementasi • % pangkat yang diisi sesuai
dalam training HRIS dengan kompetensinya
• % jumlah staff yang datanya
sudah terotomasi

Inisiatif Strategis:
• Implementasi program training
Inisiatif Strategis:
• Implementsi web-based HR
Inisiatif Strategis:

as i
• Competency Mapping and

r
untuk ketrampilan strategis Information System Assessment

u st
Il
62
 DIFFERENTIATING INITIATIVES FROM ROUTINE
• Initiatives are specific project with specified starting and ending
time in order to standardize or improve your performance

ROUTINES SMART INITIATIVES

Sales: Continuously maintain Sales: Develop a list of strategic
contacts with decision makers in Accounts’ “Decision Makers”, and run
strategic accounts golf tournament once per year (Start
in Semester 2, 2007)

Accounting: Call over-due customers Accounting: Develop bad-debt

regularly definitions, and Outsource bad-debt
collection to third party (Starting Feb
2007)

63
 Strategy Initiative & Action Plan
Strategic Objective Strategic Measure Control &
Strategic Initiative Activity Deadline
KPI Target Check Point
Meningkatkan % pegawai 80% Mengembangkan 1 Membuat rencana & approval Approved 31-Jan
Pengembangan Karir dipromosikan Assessment Center development
Pegawai sesuai plan
rencana 2 Menentukan konsep % ketersediaan 15-Mar
assessment & prosedur prosedur
pelaksanaan
2 Menetapkan tools % ketersediaan 30-Apr
prosedur

3 Membuat rencana Ketersediaan 15-Mei

pelaksanaan Assesment rencana
pelaksanaan
assessment
4 Melaksanakan Assesment % pelaksanaan 30-Sep

5 Evaluasi Hasil assesment Laporan hasil 30-Nop

evaluasi

64
ACTION PLAN
ACTION PLAN
ACTION PLAN
ACTION PLAN
ACTION PLAN
7. Vertical & Horizontal Alignment
VERTICAL ALIGNMENT

71
HORIZONTAL ALIGNMENT

72
Individual Scorecard .8
 CASCADE THE CORPORATION SCORECARD TO BUSINESS UNITS
& INDIVIDUALS
74
 ULTIMATELY, TEAM AND INDIVIDUAL GOALS
AND OBJECTIVES ARE ALIGNED TO THE
STRATEGY
A performance model provides the A personal scorecard focuses individuals on the
framework for cascading and aligning part of the performance model they can impact
personal goals

Customer Example Financial Example

Corporate Measures Balanced Scorecard Business Unit Measures Individual Goals

Corporate
Parent • Operating Margin 1993 1994 1995 1996 1997 1993 1994 1995 1996 1997 And Near Term Action Steps
Targets Financial Targets 1.
100 120 160 180 250 • Earnings
• Customer Division • Operating Margin 100 450 200 210 225 • Net Cash Flow
• Overhead & Operating Expense
Satisfaction 100 85 80 75 70
Targets Operating Targets 2.

• Variable Costs 100 75 73 70 64 • Overhead & Operating Costs

• Customer VP of Opns • Period Expenses

100 97 93 90 82 • Finding & Development Costs
• Total Annual Production
100 105 108 109 110

retention (Indexed: 1993=100)

3.
Plant Manager • Variable Costs •
Corporate Objectives
Double our value in 10 years.
Individual Measures
1.

• On time • Mfg Overhead •

•
Increase our earnings by an average of 20% a year
Achieve an internal rate of return 2% above the cost 2.
of capital. 3.

delivery
• Reduce our overhead & operating costs by a further
30% by 1997. 4. 4.
5.
Shift Supervisor
• Reduce our 5-year average finding & development

• Scrap
costs by 20%.
• Reach the top quartile of industry profitability by
1997.

• First Pass Yield rate

• Increase production by 10% by 1997.
Name:
If we can achieve all these 5.
• Schedule • Labor/ business objectives, we will be Location:
Adherence Unit a top quartile competitor

• Line
Availability
• Schedule
adherence

75
 INDIVIDUAL GROUP ORGANIZATIONAL
EFFECTIVENESS EFFECTIVENESS EFFECTIVENESS

CAUSES: CAUSES: CAUSES:

• Ability • Cohesiveness • Environment
• Skill • Leadership • Technology
• Knowledge • Group Structure • Strategic Choice
• Attitude • Status • Org. Structure
• Motivation • Role • Processes
• Stress • Norms • Culture

From: Gibson, J.L., Ivancevich, J.M., Donnelly Jr, J.H., & Konopaske, R. Organizations: Behavior, Structure & Processes. New York: McGraw-Hill, 2006.
 MANAGING PERFORMANCE
77
External
Environment

Leadership

Mission and Strategy Organization Culture

Management
Feedback Practice Feedback
Structure Systems
(policies and procedures)

Work Unit Climate

Motivation
Task Requirements and Individual Needs and
Individual Skills Values

Individual and
Organizational
Performance
Model developed by Burke and Litwin
 Managing The Performance
H

The STAR
(Objective, Quantitative)

Tyrant
Makes the Numbers

(Rewarded, Promoted)

The LOSER 2nd Chance

L
L Share the Values H
(Subjective, Qualitattive)

78
Dashboard Management .9
80
THE BALANCED SCORECARD IS FORWARD LOOKING

Vision & values

Values, Purpose Legal. Health & safety.
Values, Purpose Legal. Health & safety.
Codes of conduct.
Mission, Credo.
Mission, Credo. Boundary system Codes of conduct.
Compliance?
Reason for being.
Reason for being. Belief system Compliance?
Control system Acceptable behaviour.
Acceptable behaviour.
What?
Why? Core Risks Staking out

Tangible visions of
Commitment to Core Risks
Grand purpose The territory & rules
values
values Controls
Controls
Multiple
Safeguarding assets

Strategy
Strategy
the future
How?
Positioning for
tomorrow
Strategic
Strategic
uncertainties
Critical
Critical
performance
Getting the
job done
scenarios &
uncertainties performance

Interactive Diagnostic
futures?
2025
Changing performance. Organisational health.
Changing performance. Organisational health.
Achieving change. Vital, but not strategic.
Achieving change. control system control system Vital, but not strategic.

n
Challenge norms. How much/many/etc?
Challenge norms. How much/many/etc?
What if & why? Learning. Exception reports.
What if & why? Learning. Exception reports.

sio
Future Now/past?
Change Steady state

is
M Financial Perspective
Vision
Vision

“If we succeed, how

Strategy:
• Profitability
will we look to our • Growth
shareholders?”
• Shareholder Value

Choice about position 2020 Customer Perspective

“To achieve our
vision, how must we
look to our
• Price
• Service
• Quality
customers?”

Choice to do, and not do Internal Perspective

“To satisfy our
customers, what • Cycle Time
management processes • Productivity

How to proceed
must we excel at?” • Cost

Objectives Learning & Growth

“To achieve our

Which levers to pull

vision, how must •• Market Innovation
Continuous Learning
our organisation

along the way

learn and • Intellectual Assets
improve?”

Values
“To achieve our • Search for
vision, what values knowledge
must we hold true • Client respect
• Innovation

2015

81
82
TO SUCCEED, THE EXECUTIVE LEADER MUST BE
ENGAGED IN THE STRATEGIC CHANGE PROCESS…

Breakthrough
Unfreeze Change
and Sustain

Achieve commitment Align and focus the Institutionalize

and momentum at the organization on capabilities and culture
top change required for
breakthrough results

“The Case for Change” “Early Wins” “Irreversible Momentum”

“A successful Balanced Scorecard program is a transformation

process not a “metrics” project.”
 83BUILDING YOUR STRATEGY-FOCUSED ORGANIZATION STARTS
WITH A PROJECT; IT EVOLVES INTO A CONTINUAL PROCESS.

Unfreeze Change Sustain

Mobilization Alignment Sustainment

Phase Phase Phase

3 - 6 month period 6 month period in which 12 - 24 month period where

devoted to executive level new strategy is rolled out strategy is integrated into
momentum building to top levels of the the day-to-day work and
organization culture of the organization

“The Case for Change” “Irreversible Momentum”

“Early Wins”
IMPLEMENTATION PROCESS

S Process Process Owner Facilitator

T
C R
O A Define company vision & mission P
R T L
P. E A Board Of Director
G Translate into Corporate N
Y Strategic Map

Cascade into Dept & Branches SMO

BU/FU Director, GM,
Strategic Map Senior Mgr
D
B O
S Cascade into Dept . KPI BU/FU Director, GM,
C Senior Mgr, Mgr

Cascade into Kesepakatan Karya

(Individual Scorecards)

P All employees
E M Translate into Personal Performance A
C C
R A Objective H T
F A (Individual Scorecards, competency, E & I HR
O G
E & integrity) C O
R K N
M M
A E
N N Reward Scheme
C T • Salary adjustment
E • Incentive system
• Promotion
84
 PROJECT TEAM
85
Project Champion – Roles:
• Providing leadership during the project
• Communication to BOD
• Monitor results and expedite progress
• Support changes
• Remove barriers
Project • Ensure project integrity
Champion
Project Manager – Roles:
• Ensuring the project runs as per schedule
• Coordination and communication with members of the
team
• Regularly reporting the project progress to the BOD and
Project Manager members of the team
• Coordination with consultants and giving necessary
feedback.

Project Team – Roles:

• Providing support in project implementation
• Liaise with consultants for information and data
• Support implementation of change
BSC Core Project Team • Reorganize and redeploy resources when necessary
(Next will be SMO) • BSC Core Project Team will be the main partner for
Consultants
• BSC Functional Representative will be “functional
representative” in presenting functional views and act as
functional change agents

Strategic Planning Team
• Monitor the external dynamics
and study their impacts on
company strategy.
• Together with the BOD and other
stakeholders, review, develop
and propose company vision,
mission and strategy.
• Facilitate units, divisions and
departments in developing their
strategy, budget, Key
Performance Indicators, targets
setting and initiatives.
• Facilitate the alignment of
corporate, companies, divisions,
and departmental strategy.
DEVELOPMEN
T
BSC IMPLEMENTATION TEAM
Managing Director
Head of SMT
Performance Management Team
• Prepare periodical (monthly,
quarterly, semester, yearly)
management reports.
• Conduct Index Competition
among units (internal & external
benchmarking).
• Facilitate the management review
of company and unit
performance.
• Monitor the progress of strategic
initiatives of the company and
report the achievement in relation
to the agreed target to BOD
regularly.
MONITORIN
G
BU Director
BU SMO
Business Process
Improvement Team
• Act as internal consultant for
BOD and other work units in
performance improvements
(cost reduction, productivity
improvement, cycle time
reduction, etc).
• Communicate company strategy
to all elements within the
organization.
• Coordinate all improvement
projects within organization.
• Monitor the progress of all
improvement projects.
IMPROVEMEN
T
 CLOSED LOOP MANAGEMENT
87 SYSTEM
88