11
The Balanced Scorecard
Michael L. Werner
University of Miami
Coral Gables, Florida
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 22
What is Business Success?
Solid financial performance?Solid financial performance?
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 33
Balanced Scorecard
Refocuses Management
Financial perspectiveFinancial perspective
Customer perspectiveCustomer perspective
Internal perspectiveInternal perspective
Learning and Growth perspectiveLearning and Growth perspective
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 44
The Balanced Scorecard
Developed in 1992 by Developed in 1992 by
Robert Kaplan and Robert Kaplan and
David NortonDavid Norton
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 55
Kaplan and Norton’s Premise
“…exclusive reliance on financial “…exclusive reliance on financial
measures in a management system measures in a management system
was causing organizations to do was causing organizations to do
the wrong things.”the wrong things.”
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 66
Popularity
Employed by half of Global 1000Employed by half of Global 1000
(According to Bain & Company)(According to Bain & Company)
“One of the most powerful “One of the most powerful
management ideas ever”management ideas ever”
(Harvard Business Review)(Harvard Business Review)
Most requested and #1 in sales atMost requested and #1 in sales at
Harvard Business PublishingHarvard Business Publishing
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 77
The Balanced Scorecard
Originally developed as a Originally developed as a
measurement toolmeasurement tool
Also helps companies manage and Also helps companies manage and
implement strategyimplement strategy
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 88
The Balanced Scorecard
Based on corporate strategyBased on corporate strategy
A balanced plan for businessA balanced plan for business
More than a financial planMore than a financial plan
(Robert Kaplan and David Norton)(Robert Kaplan and David Norton)
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 99
Basic Business Strategy
FinancialFinancial
We will ensure that we use our resources and people to maintain financial success. We will ensure that we use our resources and people to maintain financial success.
CustomerCustomer
We will meet or exceed our customers’ current and future expectations and We will meet or exceed our customers’ current and future expectations and
requirements with high quality products, reasonable prices and superior with high quality products, reasonable prices and superior service.
InternalInternal
We will provide high quality on-time imaging products and services and provide an We will provide high quality on-time imaging products and services and provide an
efficient and effective means to deliver them in a high quality fashion. efficient and effective means to deliver them in a high quality fashion.
Learning and GrowthLearning and Growth
We will attract and retain high caliber people and promote an environment We will attract and retain high caliber people and promote an environment
that develops their interpersonal, business and technical skills and knowledge. that develops their interpersonal, business and technical skills and knowledge.
We will strive to develop and maintain the best sourcing for our products. We will strive to develop and maintain the best sourcing for our products.
We will strive to be aware and on the cutting edge of imaging and business technology. We will strive to be aware and on the cutting edge of imaging and business technology.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1010
The Trouble with Strategy
It is unlikely that a poor It is unlikely that a poor
strategy is the problemstrategy is the problem
Generally, the problem is Generally, the problem is
implementing strategyimplementing strategy
Even if strategy is Even if strategy is
communicated, employees communicated, employees
may not know what to not know what to do.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1111
How can the
Balanced Scorecard help?
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1212
Four Distinct Perspectives
FinancialFinancial
perspectiveperspective
CustomerCustomer
perspectiveperspective
InternalInternal
perspectiveperspective
Learning andLearning and
growth perspectivegrowth perspective
Strategy
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1313
Translating a Mission into Desired
Outcomes
MissionMission
Core ValuesCore Values
VisionVision
StrategyStrategy
Balanced ScorecardBalanced Scorecard
ObjectivesObjectives
Strategic InitiativesStrategic Initiatives
Strategic OutcomesStrategic Outcomes
Motivated and Prepared Motivated and Prepared
WorkforceWorkforce
Effective Effective
Processes Processes
DelightedDelighted
CustomersCustomers
SatisfiedSatisfied
ShareholdersShareholders
Adapted fromAdapted from
Kaplan, Kaplan,
NortonNorton
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1414
For Each Perspective
Objectives (Goals)Objectives (Goals)
MeasuresMeasures
TargetsTargets
InitiativesInitiatives
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1515
Simple Form and Relationships
Source:Source:
Kaplan, Kaplan,
NortonNorton
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1616
Objectives
Concise statements that articulate Concise statements that articulate
what the organization what the organization
hopes to accomplishhopes to accomplish
Each tied to the company’s Each tied to the company’s
strategystrategy
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1717
Financial Perspective
Overall objective:Overall objective:
To succeed financiallyTo succeed financially
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1818
Customer Perspective
Overall objective:Overall objective:
To achieve our vision of howTo achieve our vision of how
the company shouldthe company should
appear to customersappear to customers
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 1919
Internal Perspective
Overall objective:Overall objective:
To excel at having superior businessTo excel at having superior business
processes to satisfyprocesses to satisfy
shareholders and customersshareholders and customers
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2020
Learning and Growth
Perspective
Overall objective:Overall objective:
To sustain the ability to change and improveTo sustain the ability to change and improve
(Employee capabilities are a key(Employee capabilities are a key
ingredient to this objective.)ingredient to this objective.)
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2121
Measures
Descriptions of how success in Descriptions of how success in
achieving objectives will achieving objectives will
be measuredbe measured
Each tied to the company’s Each tied to the company’s
objectivesobjectives
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2222
Core Financial Measures
ROI/EVAROI/EVA
ProfitabilityProfitability
Revenue growth/mixRevenue growth/mix
Cost reductionCost reduction
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2323
Core Customer Measures
Market shareMarket share
Customer acquisitionCustomer acquisition
Customer retentionCustomer retention
Customer profitabilityCustomer profitability
Customer satisfactionCustomer satisfaction
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2424
Internal Perspective Measures
Process quality measuresProcess quality measures
Time to process an orderTime to process an order
Number of ReturnsNumber of Returns
Defect ratesDefect rates
Yield ratiosYield ratios
Lead-timesLead-times
Waste, scrap, and reworkWaste, scrap, and rework
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2525
Core Learning and
Growth Measures
Employees trained per month Employees trained per month
Employee retentionEmployee retention
Employee productivityEmployee productivity
Development and research measuresDevelopment and research measures
Number of training programsNumber of training programs
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2626
Targets
Level of performance or rate Level of performance or rate
of improvement desired of improvement desired
for each measurefor each measure
Each tied to one of the company’s Each tied to one of the company’s
measuresmeasures
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2727
Initiatives
Short-term programs and actionsShort-term programs and actions
that will help achieve the that will help achieve the
established targetsestablished targets
Each tied to company Each tied to company
objectives and measuresobjectives and measures
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2828
Examples of Initiatives
New maintenance programNew maintenance program
Upgrade selected equipmentUpgrade selected equipment
Establish performance benchmarksEstablish performance benchmarks
New training programNew training program
Establish frequent purchase programEstablish frequent purchase program
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 2929
Next: An example to help
students understand how
the Balanced Scorecard works
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3030
A Balanced Scorecard
Example
Large camera storeLarge camera store
25,000 square feet25,000 square feet
$10+ million in sales$10+ million in sales
Profits unacceptably lowProfits unacceptably low
Industry changing due to technologyIndustry changing due to technology
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3131
Basic Business Strategy
FinancialFinancial
We will ensure that we use our resources and people to maintain financial success. We will ensure that we use our resources and people to maintain financial success.
CustomerCustomer
We will meet or exceed our customers’ current and future expectations and We will meet or exceed our customers’ current and future expectations and
requirements with high quality products, reasonable prices and superior with high quality products, reasonable prices and superior service.
InternalInternal
We will provide high quality on-time imaging products and services and provide an We will provide high quality on-time imaging products and services and provide an
efficient and effective means to deliver them in a high quality fashion. efficient and effective means to deliver them in a high quality fashion.
Learning and GrowthLearning and Growth
We will attract and retain high caliber people and promote an environment We will attract and retain high caliber people and promote an environment
that develops their interpersonal, business and technical skills and knowledge. that develops their interpersonal, business and technical skills and knowledge.
We will strive to develop and maintain the best sourcing for our products. We will strive to develop and maintain the best sourcing for our products.
We will strive to be aware and on the cutting edge of imaging and business technology. We will strive to be aware and on the cutting edge of imaging and business technology.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3232
Achieve the strategy?
How do we get there?
With a mapWith a map
A strategy mapA strategy map
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3333
Strategy Map – Objectives
Financial SuccessFinancial Success
Customers impressed Customers impressed
with quality productswith quality products
and services and services
Leading edge Leading edge
production capabilities production capabilities
Trained Trained
workforceworkforce
Attract new customersAttract new customers
Retain customersRetain customers
On-time products and servicesOn-time products and services
Well functioning Well functioning
facilitiesfacilities
On cutting edge On cutting edge
of technologyof technology
Best product sourcingBest product sourcing
FinancialFinancial
CustomerCustomer
InternalInternal
LearningLearning
and Growthand Growth
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3434
Strategy Map – Measures and Targets
Operating incomeOperating income
Increase gross marginIncrease gross margin
Amount of operating expensesAmount of operating expenses
Number of new customersNumber of new customers
No. of returning new customersNo. of returning new customers
Number of customer complaintsNumber of customer complaints
Number of items per invoiceNumber of items per invoice
Number of rejected printsNumber of rejected prints
Percent of late ordersPercent of late orders
New products and services New products and services
Amount of employee trainingAmount of employee training
Amount of technology trainingAmount of technology training
Sales from new product sourcingSales from new product sourcing
TBDTBD
Increase by 20%Increase by 20%
ZeroZero
Increase by 30% Increase by 30%
1%1%
0%0%
10% Increase10% Increase
1 Session per month1 Session per month
1 Session per month1 Session per month
Increase by 30%Increase by 30%
FinancialFinancial
CustomerCustomer
InternalInternal
LearningLearning
and Growthand Growth
$100,000$100,000
Increase by 5%Increase by 5%
Maintain Maintain
MeasuresMeasures TargetsTargets
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3535
Strategy Map – Initiatives
New Price Comparison ReportNew Price Comparison Report
Monthly sales promotionsMonthly sales promotions
New Frequent Customer Sales ProgramNew Frequent Customer Sales Program
Employee sales and product training programEmployee sales and product training program
Operator and lab training programOperator and lab training program
Daily services backlog reportDaily services backlog report
New products and services program New products and services program
Employee training programEmployee training program
Technology training programTechnology training program
Three purchasing tripsThree purchasing trips
FinancialFinancial
CustomerCustomer
InternalInternal
LearningLearning
and Growthand Growth
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3636
MissionMission
Core ValuesCore Values
VisionVision
StrategyStrategy
Balanced ScorecardBalanced Scorecard
ObjectivesObjectives
Strategic InitiativesStrategic Initiatives
Strategic OutcomesStrategic Outcomes
Motivated and Prepared Motivated and Prepared
WorkforceWorkforce
Effective Effective
Processes Processes
DelightedDelighted
CustomersCustomers
SatisfiedSatisfied
ShareholdersShareholders
Adapted fromAdapted from
Kaplan, Kaplan,
NortonNorton
TargetsTargets
MeasuresMeasures
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3737
Employee Rewards
Operating income Operating income
Returning new customersReturning new customers
Customer complaintsCustomer complaints
Number of items per invoiceNumber of items per invoice
Rejected printsRejected prints
Late ordersLate orders
New products and services New products and services
Employee trainingEmployee training
Technology trainingTechnology training
Sales from new product sourcingSales from new product sourcing
Increase by 20%Increase by 20%
ZeroZero
Increase by 30% Increase by 30%
1%1%
0%0%
10% Increase10% Increase
1 per month1 per month
1 per month1 per month
Increase 30%Increase 30%
FinancialFinancial
CustomerCustomer
InternalInternal
LearningLearning
and Growthand Growth
$100,000$100,000
20% of 20% of
net incomenet income
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3838
Employee Rewards
$25,000 Equally to Five Managers
Sales Price Comparison ReportSales Price Comparison Report
Monthly sales promotionsMonthly sales promotions
Frequent Customer Sales ProgramFrequent Customer Sales Program
Returning new customersReturning new customers
Customer complaintsCustomer complaints
Number of items per invoiceNumber of items per invoice
Rejected printsRejected prints
Late ordersLate orders
New products and services New products and services
Employee trainingEmployee training
Technology trainingTechnology training
Sales new prod. sourcingSales new prod. sourcing
Three purchasing tripsThree purchasing trips
1 per month1 per month
FunctioningFunctioning
Increase by 20%Increase by 20%
ZeroZero
Increase by 30% Increase by 30%
1%1%
0%0%
10% Increase10% Increase
1 per month1 per month
1 per month1 per month
Increase 30%Increase 30%
33
FinancialFinancial
CustomerCustomer
InternalInternal
LearningLearning
and Growthand Growth
MonthlyMonthly
10%10%
10%10%
05%05%
05%05%
10%10%
10% 10%
00%00%
10%10%
05%05%
10%10%
10%10%
05%05%
10%10%
Measure or InitiativeMeasure or Initiative
TargetTarget WeightWeight
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 3939
Employee Rewards
$25,000 Equally to Five Managers
Sales Price Comparison ReportSales Price Comparison Report
Monthly sales promotionsMonthly sales promotions
Frequent customer sales programFrequent customer sales program
Returning new customersReturning new customers
Customer complaintsCustomer complaints
Number of items per invoiceNumber of items per invoice
Rejected printsRejected prints
Late ordersLate orders
New products and services New products and services
Employee trainingEmployee training
Technology trainingTechnology training
Sales new prod. sourcingSales new prod. sourcing
Three purchasing tripsThree purchasing trips
$ 2,500$ 2,500
00
00
2,5002,500
2,5002,500
$ 0$ 0
2,5002,500
00
$ 2,500$ 2,500
2,5002,500
00
2,5002,500
FinancialFinancial
CustomerCustomer
InternalInternal
LearningLearning
and Growthand Growth
$ 0$ 0
NoNo
YesYes
NoNo
NoNo
YesYes
Yes Yes
YesYes
YesYes
NoNo
YesYes
YesYes
NoNo
YesYes
Measure or InitiativeMeasure or Initiative
Bonus AmountBonus AmountGreen?Green?
10%10%
10%10%
05%05%
05%05%
10%10%
10% 10%
00%00%
10%10%
5%5%
10%10%
10%10%
05%05%
10%10%
WeightWeight
TotalTotal
Number of managersNumber of managers
Amount per manager Amount per manager
$17,500$17,500
5 5
$ 3,500$ 3,500
TotalTotal
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4040
Total Balanced Scorecard Employee
Incentives
(Assuming Net Income of $115,000)
Net incomeNet income
Bonus percentageBonus percentage
Total net income bonusTotal net income bonus
Net income bonus per manager Net income bonus per manager
Number of managersNumber of managers
Measures and initiatives bonus Measures and initiatives bonus
Total bonus per manager Total bonus per manager
Number of managersNumber of managers
Total bonuses Total bonuses
$115,000 $115,000
20% 20%
$ 23,000 $ 23,000
5 5
$ 4,600 $ 4,600
$ 3,500 $ 3,500
$ 8,100 $ 8,100
5 5
$40,500 $40,500
4141
Next: Moving Beyond the
Company’s Overall Scorecard
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4242
Departmental and Personal
Scorecards
Each department develops its ownEach department develops its own
scorecard based on thescorecard based on the
company’s overall ’s overall scorecard.
Each employee develops his or herEach employee develops his or her
scorecard based on the company’sscorecard based on the company’s
and department’s department’s scorecard.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4343
Departmental and Personal
Scorecards
Scorecards must be closely aligned withScorecards must be closely aligned with
overall company goals and company goals and objectives.
Each objective must be objective must be aligned.
Each measure must be measure must be aligned.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4444
Each Perspective
Must be Addressed
Set objectives for each objectives for each perspective.
Set basis for measurement for each basis for measurement for each objective.
This allows managers and employees toThis allows managers and employees to
focus on the success of each on the success of each perspective.
It also keeps them from focusing onIt also keeps them from focusing on
one perspective while neglecting perspective while neglecting another.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4545
Implementing the
Balanced Scorecard
The push to implement mustThe push to implement must
come from top from top management.
Managers must buy must buy in.
It takes 15 to 36 monthsIt takes 15 to 36 months
in large large organizations.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4646
Possible Pitfalls of the Balanced
Scorecard
Senior management not committedSenior management not committed
One senior manager tries to build the scorecard aloneOne senior manager tries to build the scorecard alone
Scorecard responsibilities don’t filter downScorecard responsibilities don’t filter down
The solution is overdesigned, The solution is overdesigned,
or scorecard treated as a one-time eventor scorecard treated as a one-time event
The balanced scorecard is treated as a systems projectThe balanced scorecard is treated as a systems project
Anthony Atkinson, Robert Kaplan, S. Mark YongAnthony Atkinson, Robert Kaplan, S. Mark Yong
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4747
Suggested Reading
The Balanced Scorecard, Robert S. KaplanThe Balanced Scorecard, Robert S. Kaplan
and David P. Norton, HBS Pressand David P. Norton, HBS Press
The Strategy-Focused Organization, The Strategy-Focused Organization,
Kaplan and Norton, HBS PressKaplan and Norton, HBS Press
The Balanced Scorecard Step by StepThe Balanced Scorecard Step by Step
Paul R. Niven, John Wiley & SonsPaul R. Niven, John Wiley & Sons
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4848
Suggested Reading
Just out this year: Just out this year:
Strategy Maps: Converting Intangible Strategy Maps: Converting Intangible
Assets into Tangible Outcomes,Assets into Tangible Outcomes,
Robert S. KaplanRobert S. Kaplan
and David P. Norton, HBS Pressand David P. Norton, HBS Press
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 4949
Suggested Internet Surfing
The Balanced Scorecard Collaborative at The Balanced Scorecard Collaborative at
The Balanced Scorecard Institute at The Balanced Scorecard Institute at
Free basic online presentation by Paul Niven Free basic online presentation by Paul Niven
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5050
Suggested Internet Surfing
Free netconferences Free netconferences
are also available atare also available at
The Balanced Scorecard Collaborative The Balanced Scorecard Collaborative
netconferences/netconferences/
Generally on the fourth ThursdayGenerally on the fourth Thursday
of each month at 11:00 . each month at 11:00 . ET.
Next netconference: October 28, 2004Next netconference: October 28, 2004
5151
Questions?
Comments?
5252
Thank You
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5353
Beyond the Scope
The slides that follow provide The slides that follow provide
additional insight into the additional insight into the
balanced scorecard. balanced scorecard.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5454
Handling Initiatives
Inventory current initiativesInventory current initiatives
Map them to BCS ObjectivesMap them to BCS Objectives
Eliminate nonstrategic initiativesEliminate nonstrategic initiatives
Add new initiativesAdd new initiatives
Prioritize remaining initiativesPrioritize remaining initiatives
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5555
Five Principles of Strategy-Focused
Organizations
Principle 1: Translate the strategy to operational termsPrinciple 1: Translate the strategy to operational terms
Principle 2: Align the organization to the strategyPrinciple 2: Align the organization to the strategy
Principle 3: Make strategy everyone’s jobPrinciple 3: Make strategy everyone’s job
Principle 4: Make strategy a continual processPrinciple 4: Make strategy a continual process
Principle 5: Mobilize leadership for changePrinciple 5: Mobilize leadership for change
Anthony Atkinson, Robert Kaplan, S. Mark YongAnthony Atkinson, Robert Kaplan, S. Mark Yong
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5656
Implementing the
Balanced Scorecard
Select an architect and form a an architect and form a taskforce.
Develop business strategiesDevelop business strategies
Determine where businessDetermine where business
units fit into the big fit into the big picture.
Hold meetings, workshops,Hold meetings, workshops,
and synthesis synthesis sessions.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5757
Implementing the
Balanced Scorecard
Select and design and design measures.
Establish targetsEstablish targets
Establish initiativesEstablish initiatives
Build a consensus aroundBuild a consensus around
strategic objectives.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5858
The Balanced Scorecard and a
New Management Processes
New management processesNew management processes
may result from implementingmay result from implementing
the balanced balanced scorecard.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 5959
New Management Processes
1. Translating the vision1. Translating the vision
2. Communicating and linking2. Communicating and linking
3. Business planning3. Business planning
4. Feedback and learning4. Feedback and learning
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6060
1. Translating The Vision
To build a consensus around theTo build a consensus around the
organization’s vision and strategyorganization’s vision and strategy
To express the vision in terms of an integrated To express the vision in terms of an integrated
set of objectives, measures and initiativesset of objectives, measures and initiatives
Must be agreed upon by all senior executivesMust be agreed upon by all senior executives
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6161
2. Communicating and Linking
Communicates the strategy upCommunicates the strategy up
and down in the organizationand down in the organization
Links strategy to departmental objectivesLinks strategy to departmental objectives
Links strategy to individual objectivesLinks strategy to individual objectives
Expands on performance measures thatExpands on performance measures that
focus only on financial performancefocus only on financial performance
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6262
2. Communicating and Linking
A way to ensure that all levelsA way to ensure that all levels
of the organization understandof the organization understand
the strategythe strategy
A way to ensure that departmentA way to ensure that department
and individual objectives areand individual objectives are
aligned with the strategyaligned with the strategy
Links rewards to performance measuresLinks rewards to performance measures
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6363
3. Business Planning
Enables companies to integrateEnables companies to integrate
their business and financial planstheir business and financial plans
Various independent changeVarious independent change
programs difficult to integrateprograms difficult to integrate
However when goals are set and However when goals are set and
coordinated using the balanced scorecardcoordinated using the balanced scorecard
meaningful priorities can be priorities can be set.
Resources allocated accordinglyResources allocated accordingly
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6464
4. Feedback and Learning
Expands on the traditional financial focusExpands on the traditional financial focus
Can monitor results from three more perspectivesCan monitor results from three more perspectives
Can evaluate strategy in light ofCan evaluate strategy in light of
performance in all four areasperformance in all four areas
Modify strategy to reflect real-time learningModify strategy to reflect real-time learning
as opposed to modifying strategy duringas opposed to modifying strategy during
the annual strategic plan meetingthe annual strategic plan meeting
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6565
New Management Processes
Translating theTranslating the
visionvision
CommunicatingCommunicating
and linkingand linking
BusinessBusiness
planningplanning
Feedback andFeedback and
learninglearning
Balanced
scorecard
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6666
The Balanced Scorecard
The balanced scorecard is more thanThe balanced scorecard is more than
a performance measurement performance measurement technique.
Innovative CEOs used the balance scorecardInnovative CEOs used the balance scorecard
not only to clarify and communicate strategy,not only to clarify and communicate strategy,
but also to manage also to manage strategy.
They are using the measurement focusThey are using the measurement focus
of the scorecard to accomplishof the scorecard to accomplish
critical management management processes.
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6767
The Balanced Scorecard
Clarify and translate vision and strategyClarify and translate vision and strategy
Communicate and link strategicCommunicate and link strategic
objectives and measuresobjectives and measures
Plan, set targets, and alignPlan, set targets, and align
strategic initiativesstrategic initiatives
Enhance strategic feedback and learningEnhance strategic feedback and learning
Kaplan/NortonKaplan/Norton
6868
The End
If you have questions or comments If you have questions or comments
regarding this presentation,regarding this presentation,
please feel free to contact Mike Werner atplease feel free to contact Mike Werner at
mwerner@@
or by phone at 305-321-1139 or by phone at 305-321-1139
..
mailto:mwerner@
mailto:mwerner@
USST 2004 USST 2004 ▪▪ Michael L. WernerMichael L. Werner ▪▪ University of Miami University of Miami 6969
谢 谢
六月-
2306:10:4006:100
6:10六月-23六月-
2306:10
06:1006:10:
40六月-23六
月-
2306:10:40
2023/6/4 6:10:40
