Running head: BUSINESS MANAGEMENT 1

Business Management

Student Name

Institution

Date
BUSINESS MANAGEMENT 2

Introduction

Wells Fargo, the industry leader in electronic banking, implemented a Balanced

Scorecard in its online financial services group (OFS) that enabled them to strategically

prioritize an array of new initiatives. The Balance scorecard was the perfect way to

objectively measure OFS’s performance and communicate the information both within, and

outside of the department. (Harvard Business School, Kaplan). Wells Fargo was able to

identify three strategic platforms for OFS’s:

 Attract and retain high value and high potential customers

 Increase revenue per customer

 Reduce cost per customer.

In order to achieve these goals, the team developed a comprehensive set of specific

objectives and quantifiable measures that supported these platforms. The team clearly had a

need to focus on more than just financial measures. The balance scorecard was the perfect

way to integrate a set of multidimensional measures to assess their progress towards their

goals. Throughout this paper, we will discuss how the team was able to successfully

implement the balance scorecard in their online financial services to reach their goals, and

how they were able to simplify their strategies by utilizing a visual map that delivered

positive financial and customer outcome. After reading this paper, we should have a clear

understanding on how these outcomes translate the organization’s strategy into actionable

objectives and measure how well the strategic plan is being executed.

Accounting Summary

Prior to implementing the Balanced Scorecard, OFS believed that the company

performance could only be measured on financial position. This perspective was quickly

changed with the introduction of a balanced scorecard as it allowed them to develop a

number of strategic measures that were in line with their goals. According to Bernard Marr, it

is extremely important to map out your strategic objectives into a visual map which should

contain key strategic objectives that everyone in the company can understand the business’s

key goals and priorities at a glance, and see how each objective supports the others. This is

exactly what Wells Fargo did; they created a strategy map which helps them to identify the

gaps and the missing key factors. For example, let’s refer to the chart below where we can

see a clear map of Wells Fargo strategic objectives. A map can be as simple as a chart

showing financial, customer, and business objectives, initiatives and measurements.

Discussion

In this case, the balance scorecard helps translate strategy into concrete actions and

track the implementation as well. In addition, it helps build a logical structure that allows the

managers to know what should be measured and what belongs & does not belong to the

scorecard. It is critical to identify the right metrics upfront because without a well thought out

performance model, the anticipated performance or actions cannot be attained. For example,

one of the first dimensions in the balanced scorecard is the financial perspective; for Wells

Fargo is to reduce cost per customer, in order to achieve this, they most evaluate other factors

as well such as reducing cost per service call, call length, number of service calls, etc. So, the

bank focuses on monitoring the transaction time as well as the percentage of transactions,
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services performed online among all transactions and services. This is all part on how they

are able to measure their objectives and a good point to determine whether or not they are on

track with their objectives.

The second dimension is customer perspective. Wells Fargo Bank believes that

making traditional sales more convenient is also one of the ways to effectively reduce cost

per customer. So, the bank focuses on the transaction time as well as the percentage of

transactions and services performed online among all transactions and services. For example,

providing online statements for customers to speed up servicing time, the customers can

access their statements anytime they want without having to wait every month for their

statement to be delivered through mail. Lastly, it is the Business Process Perspective. In order

to effectively measure the operating cost of serving customers, Wells Fargo Bank decides to

automate the call center, and the bank works by measuring percentage of sales that are

automated among all services. Furthermore, the bank keeps monitoring the number of

customer representatives available from time to time to make sure that their customers are

well approached and taken care of in the whole selling process.

Clearly, Wells Fargo balanced scorecard helped them to track financial and none-

financial performance. By implementing the balanced scorecard, they were able to measure

some of the changes they wanted to implement within the organization. As Kaplan

mentioned, “The primary goal of the balanced scorecard is to sustain long-run financial

performance. Non financial measures simply serve as leading indicators for the hard to

measure long run financial performance. “This was clearly Wells Fargo case, the use of the

balanced scorecard was a great tool to understand other non financial factors, improvement in

non financial measures ultimately lead to strong financial results.

Implementation of the Balanced Scorecard at Wells Fargo

Through years of experience, companies have realized that no single measure can

assess both their financial and operational performance. Companies either focus too much on

the financial aspect and lose sight of the operational aspect or vice versa. Due to this

imbalance, the balanced scorecard was developed. Wells Fargo is one of the companies that

used the balanced scorecard (BSC) in their newly established Online Financial Service

division (OFS), they were the first major bank to provide full service online banking. By

using BSC, Wells Fargo was able to formulate the most suitable measure for their company.

The Online Financial Service Division Applying the Balanced Scorecard

Wells Fargo was already known in the banking industry during the time they started

to offer online banking service, their work culture embraces financial measures however they

cannot overlook their operational measures because this would lead to poor management and

poor decisions. When they established their OFS, they implemented BSC to ensure that the

service that they were providing will prove to be a success and achieve positive results. The

challenge that they will now face is to develop the right objectives and measures to support

their newly established online financial services. The Balanced Scorecard focuses on four

parts: customer perspective, internal perspective, innovation, and learning perspective, and

financial perspective. The problem with developing a balanced scorecard is how to minimize

the measures into one strategic objective since there are many factors to consider. Wells

Fargo focused on these four parts in the following ways;

First, the customer perspective. The BSC demands that the company’s mission

towards its customers should be put into account when creating a specific measure. Wells

Fargo created a matrix wherein they can see what services were highly valued by their online

banking customers and compared them with what competitors have to offer. Based on their

findings, they focused on the following strategic objectives: internetbased banking, customer
BUSINESS MANAGEMENT 6

service, and convenience, adding and retaining high-value and high potential value

customers, increasing revenue per customer, and reducing cost per customer. They then

defined measures for each strategic objective, created a submeasure for each measure, and

each measure created targets. Through this, they were able to create needed actions to achieve

what their target is.

Second, the internal perspective. Internal measures for the balanced scorecard should

be inclined with customer-based measures. Wells Fargo developed and implemented cost-

effective marketing programs based on measures they created from the customer’s

perspective. Before the BSC, Wells Fargo’s planning and budgeting were cost-focused and

this proved to be straining not only to the company but also to the employees. After the BSC,

they prioritized allocating the resources more strategically and not just focus on the cost.

Third, innovation and learning perspective. Companies should continually improve

what they have to offer or create new products and services to keep up with what their

customer needs and wants. If companies stick to what they currently have to offer, they will

fail to capture new markets and keep up with the trends. Before the BSC, Wells Fargo’s

business performance was strictly focused on financial measures. After implementing BSC,

change in management focus and interaction occurred, and they were able to revise their

strategic assumptions and objectives.

Fourth, financial perspective. A company’s financial performance measure indicates

whether the company’s strategy, implementation, and execution are effective. Most

companies focus too much on how they can grow revenue and forget the factors that affect

their revenue growth. Wells Fargo, just like any other company, focuses their financial

perspective on revenue growth. But before they focused on how to gain revenue, they focused

mainly on what their customers want. They created their BSC by focusing on their online
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banking customers, they studied what they need and what they are looking for, and through

that, they were able to come up with the BSC that was most suited for their company, and in

turn, resulted to financial growth.

By implementing BSC, Wells Fargo was able to garner more online customers since

the service they were providing through the help of BSC proved to be outstanding. They even

received an award for “Best Online Bank”. And as an internal result, they were able to reduce

their downtime on their website and customer service. They also learned what areas they

were lacking in and excelling at by conducting an employee survey. Through BSC, Wells

Fargo was able to maintain its reputation in the banking industry and proved that it can cope

up with technological changes when it comes to providing services to its beloved customers.

Through the help of a balanced scorecard, companies can see their company from

different perspectives. The balanced scorecard breeds a system that is inclined to what your

company needs and what it has to offer. By knowing how you can properly manage different

aspects of your company, you will be able to come up with strategies that are best suited to

your company’s goals and objectives. Through implementing proper strategies, you will gain

a competitive advantage and as a result increase company growth.

Part 3

To: All Operating Managers and Employees

From: Senior Project Manager

Date: May 17, 2021

Re: Project Management: The Managerial Process

Subject: Resource Over-Allocation in Conveyor Belt Project

The purpose of this memorandum is to create awareness and possible solutions to

resource overallocation which may be encountered by all operating managers and employees

as they undertake the Conveyor Belt project. The outlined are examples of the probable

solutions:

1. Which, if any, of the resource(s) provided for the Conveyor Belt Project is over

allocated?

 Project Documentation

 Project Development

 Project Design

2. Assuming the Conveyor Belt Project is time constrained and try to resolve any over

allocation problems by leveling within slack. What happens?

In instances when conveyor belt project is subjected to time constrain, put

more efforts in resolving any present problem of over allocation through leveling

within slack approach and the expected results may be in form of documentation and

design resources. However, there is probability that resource development may still be

observed as being over allocated.

3. What is the impact of leveling within the slack on the sensitivity of the network?

The outcome may cause an escalation in sensitivity networks.

4. Assume the Conveyor Belt Project is resource constrained and determine any over

allocation complications through leveling outside the slack. What transpires?

What are the managerial suggestions? If you level outside the slack, there are

probabilities that you will eradicate any resource over-allocation present nonetheless

the conveyor belt project time schedule would be extended without doubts.

5. What options are available at this point in time?

 The conveyor belt project supervisor may allocate additional assets to ensure

the completion of the project is within the desired planned time constrain.

 Acceptance of any extra costs.

If any of the outlined issues requires project management, the appropriate procedure

to address them should be followed to ensure the Conveyor Belt project is successful.

Conclusion

To conclude, Wells Fargo is one of those organizations in the banking sector that has

embraced the use of balanced scorecard. Having enough resources but not implementing the

proper strategies will lead to poor management and poor performance. By having a guideline

just like the Balanced Scorecard, companies gain more advantage and knowledge about their

target market, their competitors, and the industry in which they operate in. Companies can

strategize without wasting resources and achieve greater results, not only financially but also

internally. With the BSC, not only are the customers satisfied, but as well as the company and

its employees. The BSC is hard to grasps at first since there are many factors to consider, it is

not something that you can operate easily. A BSC is only perfected through trial and error,

but once you achieve the suitable BSC for your company, success will follow.

The second dimension is customer perspective. Wells Fargo Bank believes that

making traditional sales more convenient is also one of the ways to effectively reduce cost

per customer. So, the bank focuses on the transaction time as well as the percentage of
BUSINESS MANAGEMENT 11

transactions and services performed online among all transactions and services. For example,

providing online statements for customers to speed up servicing time, the customers can

access their statements anytime they want without having to wait every month for their

statement to be delivered through mail. Lastly, it is the Business Process Perspective. In order

to effectively measure the operating cost of serving customers, Wells Fargo Bank decides to

automate the call center, and the bank works by measuring percentage of sales that are

automated among all services. Furthermore, the bank keeps monitoring the number of

customer representatives available from time to time to make sure that their customers are

well approached and taken care of in the whole selling process.

Clearly, Wells Fargo balanced scorecard helped them to track financial and none-

financial performance. By implementing the balanced scorecard, they were able to measure

some of the changes they wanted to implement within the organization. As Kaplan

mentioned, “The primary goal of the balanced scorecard is to sustain long-run financial

performance. Non financial measures simply serve as leading indicators for the hard to

measure long run financial performance. “This was clearly Wells Fargo case, the use of the

balanced scorecard was a great tool to understand other non financial factors, improvement in

non financial measures ultimately lead to strong financial results

With having a BSC that is already established, it will be much easier to adjust

strategic objectives in case of unforeseen circumstances such as market fluctuations,

economic downturns, and a pandemic. If an unforeseen event occurs, just like the COVID-19,

companies should change their strategy since there are many factors that will affect their

business. Customer interaction will drop and as a result, sales will also drop. Companies must

now focus on how they can provide services or products during a pandemic. The first step

would be, is to change their strategic objectives, they should focus on how what medium or

channel they should use to engage with their clients. Knowing what medium to use, delivery
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of product or service should be next. Companies should know how to take advantage of a

situation and learn to adjust in new environments. With the help of BSC, they can re-establish

their current BSC into a more suitable BSC given the current situation.
BUSINESS MANAGEMENT 13

Reference

(2021). Retrieved 21 April 2021, from https://nzbef.org.nz/wpcontent/uploads/2019/05/Case-

Study-Wells-Fargo-OnlineFinancial-Services.pdf

Bernard Marr-The Four Perspectives in a Balanced Scorecard-(March, 2019) Retrieved on

July 25, 2019 From https://www.bernardmarr.com/default.asp? contentID=968

Kaplan, R., & Norton, D. (2021). The Balanced Scorecard—Measures that Drive

Performance. Retrieved 21 April 2021, from

https://hbr.org/1992/01/thebalancedscorecard-measures-that-drive-performance-2

Kaplan, Robert S., and Nicole Tempest. "Wells Fargo Online Financial Services (A)."

Harvard Business School Case 198-146, June 1998. (Revised August 2001.)

Meredith, J. R., & Mantel Jr, S. J. (2011). Project management: a managerial approach. John

Wiley & Sons.

R.S Kaplan & D.P. Norton-The Balanced Scorecard. Boston: Harvard Business School-Press

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