Implementing, evaluating and

controlling strategy

Balanced Scorecard
• Kaplan, R. S., & Norton, D. P. (1996). Using the
balanced scorecard as a strategic
management system, HBR
Balanced scorecard (BSC)

?
 Peter Drucker:
“If you can't measure it, you can't manage it.”
“You can't improve what you don't measure.”
“Most companies’ operational and management
control systems are built around financial
measures and targets, which bear little relation
to the company’s progress in achieving long-
term strategic objectives. Thus the emphasis
most companies place on short-term financial
measures leaves a gap between the
development of a strategy and its
implementation.”
The importance of
measuring/operationalizing for
strategy
• Ex:
• Mission statement:
• “To use high-quality employees to provide
services that surpass customers’ needs.”
• What does this mean in practice???
Ex:
Metro Bank /Merger
- New organization’s overall strategy: “to provide superior
service to targeted customers.”
- five basic market segments among existing and potential
customers, each with different needs.
But:
While formulating the measures for the customer-perspective
portion of their balanced scorecard, however, it became
apparent that although the 25 senior executives agreed on the
words of the strategy, each one had a different definition of
superior service and a different image of the targeted
customers.
 BSC
Purpose: to offer managers a broad perspective of the
business and help them to identify critical areas in order
to communicate and implement the organizational
strategy

To counter the traditional focus on short-term objectives

of the financial perspective, it includes categories of non-
financial measures:
customer satisfaction,
Internal business processes,
Learning and organizational growth.
• Strategy operationalization and control
instrument
– aims to integrate objectives with implementation
controls/
– links objectives to implementation actions
A balanced scorecard is a strategic management
performance tool that helps companies identify
and improve their internal operations to help
their external outcomes. It measures past
performance data and provides organizations
with feedback on how to make better decisions
in the future.
Four perspectives
Financial: Measures how well the organization is
meeting shareholder demands
Customers: Measures how well the organization is
meeting customer requirements
Internal processes: measures the contribution of
business processes to achieving financial and
customer satisfaction objectives
Learning and growth/organisational capacity:
Measures the contribution of improvements
introduced in processes and systems to the
creation of value as well as the learning and
specialization of employees over time
The BSC aims to translate the organization's
mission and strategy into a set of measures and
performance indicators related to the different
perspectives

BSC intends to be a guide to translate the

strategy into operational terms
The balanced scorecard relies on four processes
to bind short-term activities to long term
objectives:
1. Translating the vision.
2. Communicating and linking.
3. Business planning.
4. Feedback and learning.
• 1. Translating the vision.

What metrics should be used to operationalize

visions
• 2. Communicating and linking.
When a scorecard is disseminated up and down the
organizational chart, strategy becomes a tool available to
everyone. As the high-level scorecard cascades down to
individual business units, overarching strategic objectives
and measures are translated into objectives and
measures appropriate to each particular group. Tying
these targets to individual performance and
compensation systems yields “personal scorecards.” Thus,
individual employees understand how their own
productivity supports the overall strategy.
• 3. Business planning.
Most companies have separate procedures (and
sometimes units) for strategic planning and budgeting (…)
The discipline of creating a balanced scorecard forces
companies to integrate the two functions, thereby
ensuring that financial budgets do indeed support
strategic goals. After agreeing on performance measures
for the four scorecard perspectives, companies identify
the most influential “drivers” of the desired outcomes
and then set milestones for gauging the progress they
make with these drivers.
• 4. Feedback and learning.
By supplying a mechanism for strategic feedback
and review, the balanced scorecard helps an
organization foster a kind of learning often
missing in companies: the ability to reflect on
inferences and adjust theories about cause-and-
effect relationships.
 Implementing BSC
1. Determine perspectives of the strategic map
and respective objectives
2. Identify the indicators/KPIs for each objective
3. determine goals/targets
4. Identify initiatives/actions
• Resources

• https://balancedscorecard.org/bsc-basics-
overview/
• https://www.intrafocus.com/balanced-
scorecard/
A strategy map
Source: Exhibit 1, R. Lawson, W. Stratton and T. Hatch (2005), ‘Achieving strategy with Scorecarding’, Journal of Corporate Accounting and Finance, March–April, 62–8: p. 64
 1 - Determine perspectives of the strategic map and
respective objectives

A strategy map
Source: Exhibit 1, R. Lawson, W. Stratton and T. Hatch (2005), ‘Achieving strategy with Scorecarding’, Journal of Corporate Accounting and Finance, March–April, 62–8: p. 64
 Implementing the BSC (2)
1. Identify the indicators/KPIs for each objective
2. determine goals/targets
3. Identify initiatives/actions
 BSC allows to:
• Focus the organization's activity on the pursuit of
strategic goals
• Improve communication between members of the
organization as there is a better understanding of what is
going on in the organization as well as a shared
understanding of the interests of the organization as a
whole
• Define objectives for the organization and its processes
• Obtain feedback regarding the effectiveness of the
defined strategy
• (New year’s) activity
• Personal balanced scorecard
• https://www.forbes.com/sites/christinawallac
e/2016/12/24/the-personal-balanced-
scorecard/?sh=420a87bb5a65
 Category Strategic Priorities Targets

Pay off student loans

Be out of debt
No consumer debt
Retirement (401k + Roth IRA) at 1x salary by age xx
Plan for the future
Financial xx% downpayment for house by EOY20XX
Maintain credit score of xxx
Be responsible
Savings = x months of living expenses
Be generous Donate xx% to charity
Blood pressure between xx/xx and xxx/xx
Resting heart rate between xx and xx
Total cholesterol below xxx
Be healthy Total cholesterol / HDL below x.x
Hemoglobin a1c between xx and xx
Weight between xxx and xxx
Health
Body fat between xx% and xx%
Get annual physical, blood panel, & appropriate tests
Stay healthy
Dentist cleaning every 6 months
Run xxx miles this year
Be active!
Complete 1 5k, 1 10k, 2 half marathons, 1 full marathon
Don't be stupid No new significant injuries (requiring surgery or stitches)
 Category Strategic Priorities Targets

A couple of (confidential) goals for my role here

Job A couple of (confidential) goals for my role here
A couple of (confidential) goals for my role here
Incorporate as LLC, open bank account, register trademarks
Podcast Build audience to xx downloads per episode and xx twitter followers
Establish cadence for weekly episodes to streamline work
Professional
Publish at least one piece of longform creative non-fiction
Writing Make personal creative projects a priority
Publish x freelance pieces per month
Give TEDx talk
Public Speaking Book x paid talks this year
Write 1 new keynote talk and test it out
A couple of (confidential) goals for family
Family A couple of (confidential) goals for family
A couple of (confidential) goals for family
A couple of (confidential) goals for friends
Friends A couple of (confidential) goals for friends
A couple of (confidential) goals for friends
Take one vacation not attached to a speaking gig or work trip
Personal Travel Optimize speaking gigs and work trips to include personal time
Reconnect with at least one friend on each trip (haven't spoken > yr)
Read at least xx books per month, incl fiction, poetry, non-business
Personal
Ace grad school computer science classes
Development
Take writing workshop
Continue singing with Ensemble Companio
Music Practice cello xx times per week
Learn entire Hamiton soundtrack by heart. Rap as well as a nerd can