Jitender Singh Rahvat N 25 Mangesh Gedam N32
Jitin Maurya N 26 Manoj Kumar Sabat N34
Kapil Kapoor N 26
9 September 2009 301- Business Policy & Strategic Management 1
• Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example
9 September 2009 301- Business Policy & Strategic Management 2
• Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example
9 September 2009 301- Business Policy & Strategic Management 3
The balanced scorecard is a new management concept
which helps managers at all levels monitor results in their
key areas .
Introduced by Robert Kaplan and David Norton
"The Balanced Scorecard - Measures that Drive Performance" in the
Harvard Business Review in 1992
"The Balanced Scorecard: Translating Strategy into Action", published
in 1996
The balanced scorecard approach provides a clear
prescription as to what companies should measure in order
to 'balance' the financial perspective.
9 September 2009 301- Business Policy & Strategic Management 4
The Balanced Scorecard is a management tool that provides
stakeholders with a comprehensive measure of how the
organization is progressing towards the achievement of its
strategic goals
The Balanced Scorecard:
Balances financial and non-financial measures
Balances short and long-term measures
Balances performance drivers (leading indicators) with outcome
measures (lagging indicators)
Should contain just enough data to give a complete picture of
organizational performance… and no more!
Leads to strategic focus and organizational alignment.
9 September 2009 301- Business Policy & Strategic Management 5
Traditionally organizations have always been measured by
their financial metrics only
But Organizations cannot directly influence financial outcomes, as
these are "lag" measures
Financial metrics (Net Profit, RoCE, PE, Financial Ratio’s etc.) are only
part of the total picture and are lagging indicators
The use of financial measures alone to inform the strategic
control of the firm is unwise.
9 September 2009 301- Business Policy & Strategic Management 6
By focusing not only on financial outcomes but also on the
operational, marketing and developmental inputs to these,
the Balanced Scorecard helps provide a more comprehensive
view of a business, which in turn helps organizations act in
their best long-term interests for e.g.
To achieve strategic objectives.
To provide quality with fewer resources.
To eliminate non-value added efforts.
To align customer priorities and expectations with the customer.
To track progress.
To evaluate process changes.
To continually improve.
To increase accountability
9 September 2009 301- Business Policy & Strategic Management 7
• Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example
9 September 2009 301- Business Policy & Strategic Management 8
Adapted from The Balanced Scorecard by Kaplan & Norton
9 September 2009 301- Business Policy & Strategic Management 9
Present in traditional scorecards of a company as well
Aims to satisfy the companies constituents, what financial
and regulatory objectives must the company accomplish?
Possible Performance Measures
Cost / Unit
Unfunded Requirements or Projects
Cost of Service
Budget Projections and Targets
9 September 2009 301- Business Policy & Strategic Management 10
To achieve the companies vision, what customer needs must
the company serve?
Possible Performance Measures
Customer Satisfaction (Average)
Satisfaction Gap Analysis (Satisfaction vs. Level of Importance)
Satisfaction Distribution (% of each area scored)
9 September 2009 301- Business Policy & Strategic Management 11
To satisfy the companies customers, in which business
processes must the company excel?
Possible Performance Measures
Cycle Time
Completion Rate
Workload and Employee Utilization
Transactions per employee
Errors or Rework
9 September 2009 301- Business Policy & Strategic Management 12
To achieve the companies goals and accomplish core
activities, how must the employees learn, communicate and
work together?
Possible Performance Measures
Employee Satisfaction
Retention and Turnover
Training Hours and Resources
Technology Investment
9 September 2009 301- Business Policy & Strategic Management 13
• Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example
9 September 2009 301- Business Policy & Strategic Management 14
Environmental Scan
Strengths V/s Weaknesses
Opportunities Threats
Values
Mission &
Vision
Strategic Issues
Strategic Priorities
Objectives, Initiatives, and Evaluation
9 September 2009 301- Business Policy & Strategic Management 15
I. Translate the strategy to operational terms.
II. Align the organization to the strategy.
III. Make strategy everyone’s job.
IV. Make strategy a continual process.
V. Mobilize change through executive leadership
9 September 2009 301- Business Policy & Strategic Management 16
9 September 2009 301- Business Policy & Strategic Management 17
The Balanced Scorecard Provides a Framework to
Translate the Vision and Strategy Into Operational
Terms
The Balanced Scorecard is used to Clarify Strategy
and Translate it into Focused, Actionable Objectives
The Balanced Scorecard is used to implement the
strategy
9 September 2009 301- Business Policy & Strategic Management 18
• Balanced Scorecard Introduction
• What
• Why (Lagging Indicators & Leading Indicators)
• Balanced Scorecard Elements
• 4 Perspectives
• Balanced Scorecard and Business Strategy
• Balance Scorecard Example
9 September 2009 301- Business Policy & Strategic Management 19
THANK YOU
9 September 2009 301- Business Policy & Strategic Management 20
