Professional Documents
Culture Documents
PLANS FAIL?
Vision Barrier
People Barrier
Resource Barrier
Management Barrier
BALANCED SCORE
CARD
WHAT IS THE BALANCED
SCORECARD?
Productivity
Competitive position
Employee development
Employee relations
Technological leadership
Public responsibility
FACTORS FUELLING THE NEED FOR
PERFORMANCE MEASUREMENT
1) the series of corporate accounting scandals,
2) a longstanding reliance on financial measures of
performance as the one true way to gauge success,
3) the inability of many organizations to successfully
execute their strategies.
What to Measure?
Measure outcomes not activity
Begin with efficiency measures
Develop metrics geared towards your
organization’s goals and strategies
Establish metrics to monitor key HR practices
proven to grow human capital
Use metrics that will encourage change and
help us make better decisions about human
capital
WHY EXECUTING
STRATEGY...
Is the greatest challenge for organizations
Vision
- only 5% of workforce gets it
People
– 25% of managers have incentives linked to strategy
Management
– 85% of executive teams spend less than 1 hour/mo
discussing strategy
Resource
– 60% of organizations don’t link budgets to strategy
LAG INDICATORS- feedback measures on
current performance
LEAD INDICATORS- drivers of long term
value
CAUSE AND EFFECT RELATIONSHIPS
Lag Indicators Lead Indicators
Return on Investment
Learning Internal C ustom er Financial
•Return on Investment
Revenue Growth
•Revenue growth
Customer Retention Customer Satisfaction
Share of Wallet • Customer
Survey Satisfaction Survey
•Customer Retention
Customer Complaints
• Customer Complaints and
and Returns
Returns
On-time Delivery Cycle Time
Yield, Variability
•On-time delivery •Cycle Time
•Yield, Variability
Employee Satisfaction Employee Teams
Employee Skills Employee Training
•Employee Satisfaction •Employee Teams
•Employee Skills •Employee Training
BALANCED PERFORMANCE
MEASUREMENT
1) How should strategy be implemented in our firm?- how
the firm generates value.
Example activities
Executive Workshop #1 Workshop # 2 Workshop # 3
interviews
Build and
Increase Maintain Become
Staff Strong Preferred
Competence Customer Supplier
Maximize
Relationships in Market Y
Value
Creation
Drive For
Innovation
Achieve
Gain Business Increase
Consumer
Environment Cost
Brand
Intelligence Efficiency
Preference
Build Strong
Brand
Build and
Increase Staff maintain strong
competence customer
relationship
Gain business
Env intelligence
Gain business
Drive for innovation Achieve consumer Maximize value
environment intelligence
brand preference creation
Return on
Financial Investment
On-time Delivery