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Implementation of Balanced Scorecard

The document outlines the process and timeline for implementing a balanced scorecard (BSC) framework in an organization over a period of around 26 months. It involves several key steps: 1) Clarifying the vision and translating it into strategy over 3 months with cross-functional teams. 2) Communicating the new strategy to middle managers over 4-5 months and developing business unit scorecards over 6-9 months. 3) Eliminating non-strategic investments and launching an organizational change program in the 6th month. 4) Reviewing and refining business unit scorecards, strategy, and vision over months 9-12. 5) Communicating the BSC to the entire organization

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Paramjit Sharma
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© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
1K views

Implementation of Balanced Scorecard

The document outlines the process and timeline for implementing a balanced scorecard (BSC) framework in an organization over a period of around 26 months. It involves several key steps: 1) Clarifying the vision and translating it into strategy over 3 months with cross-functional teams. 2) Communicating the new strategy to middle managers over 4-5 months and developing business unit scorecards over 6-9 months. 3) Eliminating non-strategic investments and launching an organizational change program in the 6th month. 4) Reviewing and refining business unit scorecards, strategy, and vision over months 9-12. 5) Communicating the BSC to the entire organization

Uploaded by

Paramjit Sharma
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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implementing - bsc

Paramjitsharma
Clarifying and Using BSC as
Strategic Framework
Translating the For Action
Vision and
Strategy

Communicating Balance Strategic


And Scorecard Feedback and
Linking Learning

Planning and
Target Setting

Paramjitsharma
Launching The Balance Scorecard Programme

Obtain Clarity and Consensus about Strategy

Achieve Focus

Leadership Development

Strategic Intervention
Build a Build a new
Balanced Management
Scorecard Educate the Organisation System

Set Strategic Targets

Align Programmes and Investments

Build a feed back system

Paramjitsharma
The Dynamics: Mobilizing the Organisation

1 Clarify the Vision

Team formed
At least 3 months
Developing BSC
Translate vision to strategy
Clarity and Understanding
Building Consensus
Commitment to strategy

Paramjitsharma
The Dynamics: Mobilizing the Organisation

2 Communicate to Middle Managers

Top 3 layers brought together


Learning and discussing
New Strategy
BSC as communication vehicle
4-5 months taken

Paramjitsharma
The Dynamics: Mobilizing the Organisation

2B Develop Business unit Scorecards

6-9months (three months)


Each SBU Having strategy
Translating strategy into scorecard

Paramjitsharma
The Dynamics: Mobilizing the Organisation

3A Eliminate Nonstrategic Investments

Corporate Scorecard
Clarifying Strategic Priorities
Identify non contributing factors
Eliminate them
6th month(1 month)

Paramjitsharma
The Dynamics: Mobilizing the Organisation

3B Launch Corporate Change Program

Need for change programme


Launched
When SBU ‘s prepare scorecards
6th Month (1 month)

Paramjitsharma
The Dynamics: Mobilizing the Organisation

4 Review Business Unit Scorecard

Review by Executive team


Shaping Strategy if needed
9-11 months
3 months

Paramjitsharma
The Dynamics: Mobilizing the Organisation

5 Refine the Vision

Review brings out cross


business issues
Not initially included in corporate strategy
Corporate scorecard is updated
12 month
1 month

Paramjitsharma
The Dynamics: Mobilizing the Organisation

6A communicate the Balance Scorecard

Let the Entire Organisation be communicated


When Management team is comfortable
Disseminated to entire Organisation
12th month
1 month

Paramjitsharma
The Dynamics: Mobilizing the Organisation

6B Establish Individual Performance Objectives

Top 3 layers of Management link individual


Objectives and performance incentives
Compensation to their scorecards

Months 13-14

2 months

Paramjitsharma
The Dynamics: Mobilizing the Organisation

7 Update Long Range Plan and Budget

5 years goals are established for each measure


 investments required are funded
1st year requirement becomes annual budget
15-17 months
3 months

Paramjitsharma
The Dynamics: Mobilizing the Organisation

8 Conduct Monthly and Quarterly Review

Monthly review process


Supplementary quarterly review
On strategic issues
18th month on going

Paramjitsharma
The Dynamics: Mobilizing the Organisation

9 Conduct Annual Strategy Review

Beginning of 3rd year


Strategy may require review
Executive lists new(10) strategic issues
Each SBU is asked to develop strategy
On each issues
25-26 Months
2 Months

Paramjitsharma
The Dynamics: Mobilizing the Organisation

10 Link Every one’s performance to balance


scorecard

Paramjitsharma
Building An Integrated Management System

1 Strategy formulation & Strategic issue update

2 Link to personal Objectives and Rewards

3 Link to planning, Resource allocation &


Annual Budgets

4 Feedback and Strategic Learning

Paramjitsharma
Building An Integrated Management System

1 Strategy formulation & Strategic issue update

Outlining Strategic Issues


Implementation in each SBU’s
Linking Corporate/SBU strategies to Functional Strategies

Paramjitsharma
Building An Integrated Management System

2 Link to personal Objectives and Rewards

Linking strategies to personal obj & Rewards

Paramjitsharma
Building An Integrated Management System

3 Link to planning, Resource allocation &


Annual Budgets

Paramjitsharma
Building An Integrated Management System

4 Feedback and Strategic Learning

Periodic Strategic Review

Paramjitsharma
Some Cautions

Structural Defects
Organizational Defects

Duplication of efforts Defective process of implementation


Defects in non financial measures Breakdown in performance
Reporting Problems More about Measure
Imitation of good organizations
Communication Problems Lack of information
Unsound Basis for Resource Delay in implementation of BSC
Allocation….

Paramjitsharma
Managing Ongoing Strategic Management System

Clarifying and Director Of Strategic Planning


Translating the
Vision and
Strategy

Communicating Balance Strategic


And Scorecard Feedback and
Linking Learning

Director of
Human Resources Chief
Information
Planning and Officer
Target Setting

Chief Financial Officer

Paramjitsharma
Barriers to effective Implementation of BSC

Vision & Strategies not actionable

Strategies not linked to departmental and


Individual Goals

Strategies not linked to Long term/short term


Resource Allocation

Feedback that is tactical not strategic

Paramjitsharma
Barriers to effective Implementation of BSC

1 Vision & Strategy not Actionable

Strategy &
2 Strategy not Vision
Linked to Dept Team
& Individual Goals

Personal MBO & Monthly


Budget
Incentives Review

4 feedback that is tactically


Financial Plan not strategic

& Capital
Allocation

3 Strategy not Linked to Resource Allocation

Paramjitsharma
Barrier No 1: Vision and strategy not Actionable

Cant be translated into action


Cant be acted Upon
Cant be understood
Fragmentation & Sub optimization
of efforts
Lacking consensus & Clarity
Different Agendas
No integration
Not linked coherently to overall strategy

Paramjitsharma
Barrier No 2: Strategy not Linked to Goals

Not translated into Department/


individual Goals
Different Priorities
Failure of Human Resource Management
Disalignment in Goals

Paramjitsharma
Barrier No 3: Strategy not Linked to Resource Allocation

Separate Processes for Long term &


Short term Strategic planning
Funding to unrelated priorities
Poor Monthly Reviews
Unfocused New Mgt Techniques
Poor Integration

Paramjitsharma
Different Management System for Strategic Implementation

•The strategy is the reference point for the entire management process
•The shared vision is the foundation for strategic planning

Clarifying & Translating


•Goal alignments from The Strategy & Vision
top to bottom •Feedback system used to test
•Education and open The hypothesis on which strategy
communication about strategy Is based

Strategic Feedback
Communicating Balance &
And Linking Scorecard Learning

•Compensation is linked •Team problem solving


To Strategy •Strategy development is a
Planning &
Continuous Process
Target Setting

•Stretch targets are established and accepted


•Strategic initiatives are clearly identified
•Investments are determined by strategy
•Annual Budgets are linked to long term planning

Paramjitsharma
thanks

Paramjitsharma

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