Professional Documents
Culture Documents
BALANCED
SCORECARD
Robert S. Kaplan
Harvard Business School
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
A Measurement
System?
A Management
System?
A Management
Philosophy?
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
Objectives
Measures
Targets
Initiatives
CUSTOMER
To achieve our Objectives
vision, how
should we
appear to our
customers?
Targets
Initiatives
To satisfy our
shareholders
and customers,
what business
processes must
we excel at?
Vision and
Strategy
Objectives
Measures
Targets
Initiatives
Measures
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
Targets
Initiatives
Processes
People
.
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
Mission
Mission Driven
Driven
Financial Perspective
Customer Perspective
Internal Perspective
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
To
To satisfy
satisfy our
our customers,
customers,
financial
financial donors
donors and
and mission,
mission,
what
what business
business processes
processes
must
must we
we excel
excel at?"
at?"
To
To achieve
achieve our
our vision,
vision, how
how
must
must our
our people
people learn,
learn,
communicate,
communicate, and
and work
work
together?
together?
The Mission, rather than the financial / shareholder objectives,
drives the organizations strategy
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
Increase
Increase
Perception
Perception
of
of Safety
Safety
Improve
Improve
Service
Service
Quality
Quality
Strengthen
Strengthen
Neighborhoods
Neighborhoods
Availability
Availability of
of
Safe,
Safe,
Convenient
Convenient
Transportation
Transportation
Maintain
Maintain
Competitive
Competitive
Tax
Tax Rates
Rates
Grow
Grow Tax
Tax
Base
Base
Maintain
Maintain
AAA
AAA Rating
Rating
Promote
Promote
Economic
Economic
Opportunity
Opportunity
Maximize
Maximize
Benefit/Cost
Benefit/Cost
Promote
Promote
Community
Community
Based
Based
Problem
Problem
Solving
Solving
Secure
Secure
Funding/
Funding/
Service
Service
Partners
Partners
Enhance
Enhance
Knowledge
Knowledge
Management
Management
Capabilities
Capabilities
Improve
Improve
Productivity
Productivity
Close
Close
Skills
Skills Gap
Gap
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
Streamline
Streamline
Customer
Customer
Interactions
Interactions
Increase
Increase
Infrastructure
Infrastructure
Capacity
Capacity
Promote
Promote
Business
Business
Mix
Mix
Achieve
Achieve
Positive
Positive
Employee
Employee
Climate
Climate
7
Improve
Returns
Financial
Perspective
Improve
Operating
Efficiency
Broaden
Revenue Mix
Increase
Customer
Confidence in Our
Financial Advice
Increase
Customer
Satisfaction
Through Superior
Execution
Customer
Perspective
Internal
Perspective
Understand
Customer
Segments
Develop New
Products
Cross-Sell the
Product Line
Shift
to
Appropriate
Channel
Increase
Employee
Productivity
Develop
Strategic
Skills
Access
to
Strategic
Information
Minimize
Problems
Provide
Rapid
Response
Learning
Perspective
Align
Personal
Goals
Growth
Increase revenues, not just cut costs and
enhance productivity
Implement
From the 10 to the 10,000. Every employee
implements the new growth strategy in their
day-to-day operations
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
9 of 10 companies
fail to execute
strategy
10
Mobil
1993
#6 in
profitability
(USM&R)
1993
Retail Bank
$275M loss
1995
1996
1997
1994
1995
1996
1997
#1 in profitability
#1 in profitability
#1 in profitability
Profit
Stock
$15M
$60M
$80M
$98M
$74
$114
$146
$205
1993
Losing
money
1996
#1 in growth
and
profitability
1993
Profits = $x
1994
1995
1996
Profits = $8x
Profits = $13x
Profits = $19x
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
11
Fast
9 of 10 companies
fail to execute their
strategies
2 to 3 years to achieve
breakthrough results
12
Question:
Question:
Answer:
Answer:
How
Howcan
cancomplex
complex
organizations
organizationsachieve
achieve
results
like
this
results like thisin
insuch
such
short
periods
of
time?
short periods of time?
Alignment!
Alignment!
BUSINESS UNITS
STRATEGY
EXECUTIVE TEAM
INFORMATION
TECHNOLOGY
HUMAN RESOURCES
13
2.
3.
4.
5.
6.
7.
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
14
Formulate
ad
tin
er
sh
n
Co
ip
fr o
A
y:
t eg
ra
St
To
p
P
us
Le
uo
Executive
c
ro
es
s
STRATEGY
Communicate
Navigate
n
ryo
ve
sE
Comprehensive Communication to
Create Awareness
Align Goals and Incentives
Integrate Budgeting with Strategic
Planning
Align Resources and Initiatives
en
dd
oc
k
Hi
b
Jo
Un
l
e's
As
s
yI
et
s
teg
ra
St
Leadership
Execute
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
15
Every
Every measure
measure is
is part
part of
of aa chain
chain of
of cause
cause and
and effect
effect linkages
linkages
A
A balance
balance exists
exists between
between outcome
outcome measures
measures and
and the
the
performance
performance drivers
drivers or
or desired
desired outcomes
outcomes
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
16
Correction
Applied
Management
Feedback &
Control Loop
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
17
L&G
corrections
INTERNAL
CUST
FINANCIAL
Financially Strong
Delight the Consumer
Win-Win Relationship
Safe & Reliable
Competitive Supplier
Good Neighbor
Quality
Motivated & Prepared
Strategic Measures
Return on Capital Employed
Mystery Shopper Rating
Dealer / Pioneer Gross Profit Split
Manufacturing Reliability Index
Days Away from Work Rate
Laid Down Cost vs. Best
Competitive Ratable Supply
Environmental Index
Quality Index
Strategic Competency Availability
result
Performance
Performance
input
output
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
18
Financial
Perspective
Improve
Operating
Efficiency
Broaden
Revenue Mix
Increase Customer
Confidence in Our
Financial Advice
Increase
Customer Satisfaction
Through Superior
Execution
Customer
Perspective
FOLLOW-UP
ACTION
Closing the loop
Internal
Perspective
Understand
Customer
Segments
Develop New
Products
update
the
strategy
Cross-Sell the
Product Line
Shift to
Appropriate
Channel
Minimize
Problems
Provide
Rapid
Response
Increase
Employee
Productivity
Learning
Perspective
Develop
Strategic
Skills
Access to
Strategic
Information
Align
Personal
Goals
strategic learning
loop
L&G
INTERNAL
CUST
FINANCIAL
reallocate
priorities
Strategic Objectives
Financially Strong
Delight the Consumer
Win-Win Relationship
Safe & Reliable
Competitive Supplier
Good Neighbor
Quality
Motivated & Prepared
THE
MANAGEMENT
MEETING
Team Problem
Solving
Strategic Measures
Return on Capital Employed
Mystery Shopper Rating
Dealer / Pioneer Gross Profit Split
Manufacturing Reliability Index
Days Away from Work Rate
Laid Down Cost vs. Best
Competitive Ratable Supply
Environmental Index
Quality Index
Strategic Competency Availability
results
Testing hypotheses
and capturing
learning
INSIGHT
HARVESTING
dialog
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
19
Case Study:
Telecomm
CEO
Strategic
New
Business &
Growth
Themes
Business
Process
Council
Professional
Development
Roundtable
Strategic
Management
System
Commercial
Services
Retail
Services
COO
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
CFO
Strategic
Planning
Human
Resources
20
Formulate
ad
tin
er
sh
n
Co
ip
fr o
A
y:
t eg
ra
St
To
p
P
us
Le
uo
Executive
c
ro
es
s
STRATEGY
Communicate
Navigate
n
ryo
ve
sE
Comprehensive Communication to
Create Awareness
Align Goals and Incentives
Integrate Budgeting with Strategic
Planning
Align Resources and Initiatives
en
dd
oc
k
Hi
b
Jo
Un
l
e's
As
s
yI
et
s
teg
ra
St
Leadership
Execute
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
21
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
22
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
Philosophy
23
STRATEGY
ALIGNMENT
KNOWLEDGE BASE
INSIGHTS
PERFORMANCE
PERFORMANCE
L &G
IN T E R N AL
CU S FTIN A NC IA L
LEVERAGE
The Strategy
Teams
Balanced Scorecard
Outcomes
Strategic Objectives
Strategic Measures
Financially Strong
Delight the Consumer
Win-Win Relationship
Safe & Reliable
Competitive Supplier
Good Neighbor
Quality
Motivated & Prepared
Processes
Insights
LEARNING
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
24
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
25
www.bscol.com
Tel: (USA) 781.259.3737
Publications
Conferences
Research
Networking
1999 The Balanced Scorecard Collaborative and Robert S. Kaplan. All rights reserved.
Training
Implementation
26