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Organizational Alignment using Strategy Maps and Balanced Scorecard
- 1. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 1
Organizational Alignment Using
Strategy Maps & Balanced Scorecard
Presented by Rajesh Naik
- 2. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 2
Do these sound familiar?
• The organization says it will do business only
with Fortune 500 companies
– But keeps signing small projects from small
customers
• Cost reduction is a focus
– But you are asked to travel by train, spend billable
time and stay in hotels (costlier than airfare!)
• New skills are a must for promotion and growth
– But the best people are busy (fire fighting) with
existing projects and the mediocre folks get trained on
new technologies
- 3. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 3
Do these sound familiar?
• CEO says low cycle-time, low-cost and
feature-richness are critical to their
success
– But the project and process goals are
schedule variance, effort variance and defect
density – do these match with the critical
success factors?
• CEO says we MUST grow in new products
– But the sales targets (for salespersons) are
based on total order value – there are no
product line specific targets
- 4. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 4
Initiatives – What Direction?
Organization
- 5. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 5
How Do They All Tie Together?
• Employees
– Do not know why they are doing something
– Do not understand how various initiatives
are interlinked
• Management
– Often starts new initiatives without fitting
into a bigger picture
– Does not explain relationship between
initiatives and overall objectives
- 6. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 6
We Need to Execute Strategy
(not just formulate it…)
Of the strategies effectively
formulated, less than 10% are
effectively executed”
Fortune
“It better to effectively
implement a mediocre
strategy, than to ineffectively
implement a great strategy”
- 7. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 7
But what is strategy?
The art or skill of careful
planning towards an
advantage or a desired end
‘Oxford English Dictionary’
- 8. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 8
Key Elements of Effective Strategy Implementation
• Clarify strategies
• Understand and explain inter-linkages
• Resolve conflicts of alignment
• Communicate to employees
• Relate internal process goals to organizational
strategic goals
• Align investments in people, technology and
organizational capital for greatest impact on
strategic objectives
• Prioritize initiatives based on potential impact
- 9. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 9
How do we get Breakthrough Results?
World Class Strategy Implementation =
Describe the
Strategy
Measure the
Strategy
Manage the
Strategy+ +
Strategy
Maps
Balanced
Scorecard
- 10. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 10
A Software Products/ Services Org
Revenue Profits EPS
Financial (Shareholder/ Owner) Perspective
- 11. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 11
…
A Software Products/ Services Org
Revenue Profits EPS ……
High Speed
Implementation
Cost-Effective
Services
High Quality
Solutions
Fortune
500 Customers
Single Point
for Insurance
Industry
Customer Perspective
- 12. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 12
Large Scale
Implementations
A Software Products/ Services Org
Revenue Profits EPS ……
Program
Management
Hi Fidelity
Processes
Software
Products
High Speed
Implementation
Cost-Effective
Prod/ Svcs
High Quality
Solutions
Fo
500 C
Single Point
for Insurance
Industry
Brand Building in
Insurance Industry
Reuse
Large Acco
Managem
Cross Selling
Internal Perspective
Cost Effective
Infrastructure
Cost Effectiv
Financing
Regulatory
Complianc
- 13. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 13
A Software Products/ Services Org
Large Scale
Implementations
Revenue Profits EPS ……
Program
Management
Hi Fidelity
Processes
Software
Products
High Speed
Implementation
Cost-Effective
Prod/ Svcs
High Quality
Solutions
Fortune
500 Customers
Single Point
for Insurance
Industry
Brand Building in
Insurance Industry
Reuse
Large Account
Management
Cross Selling
Insurance
COE
Knowledge
Management
IP Creation
Automation
Of Processes
Employee
Engagement
Innovation
Tech/ Domain
Competency
Development
Cost Effective
Infrastructure
Cost Effective
Financing
Regulatory
Compliance
Continuous
Improvement
People, knowledge, systems, innovation and improvement perspective
- 14. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 14
Vision & Strategy
Financial/ Owners/ Shareholders
Customers
Business Processes
Learning & Growth
People, Systems & Technology
The Concept
- 15. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 15
FINANCIAL PERSPECTIVE
How should we appear to our
Owners/ shareholders?”
LEARNING PERSPECTIVE
What do we need to
change, learn, innovate
and improve?
What business processes must
we excel in?
INTERNAL PERSPECTIVE
How should we appear to our
customers?
• What products/ services?
• What markets?
CUSTOMER PERSPECTIVE
The Four Perspectives
- 16. © Rajesh Naik, 2009
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Learning & Growth
Business Processes
Customer
Financial
Cause & Effect Relationship
ROCE
Customer Loyalty
On Time Delivery
Process Quality Process Cycle Time
Employee Skills
- 17. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 17
Successful Balanced Scorecards start with a strategy map
Example Mobil (US Marketing & Refining)
Growth Theme
Improve quality of revenue by understanding customer
needs and differentiating ourselves accordingly.
Productivity Theme
Maximize utilization of existing assets and integrate
the business to reduce total delivered cost.
Financial
Perspective
Return on Capital
Increased from 6% to 16%
Competitive Position
(profitability)
From last (1993)
to first (95, 96, 97, 98)
Volume Growth
Exceeds industry by 2-2.5% annually
Reduce Cash Expenses
Down by 20%
Improve Cash Flow
From -$500 M/Yr to +$700 M/Yr
Customer
Perspective
Internal
Perspective
Customer Satisfaction
Continuous improvement for 3
consecutive years
Speedpass Active
Increasing at rate of
1M per year
Dealer Quality Perfect Orders
Continuous
improvement for 4
consecutive years
Learning &
Growth
Perspective
Quality Capacity Utilization Safety
Lost work incidents
down from 150 to 30
per year
Environmental
Number of incidents
reduced by 63%
Continuous
improvement for 4
consecutive years
Annual value of lost
yield reduced from
$175m to $50m
Product Innovation Customer Management
Operational Excellence Good Neighbor
Motivated & Prepared Workforce
Continuous
improvement for 4
consecutive years
Strategic Awareness
Annual employee survey shows awareness of
strategy increased from 20% to 80%
Source:
The Balanced Scorecard
D. Norton & R. Kaplan
- 18. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 18
Cascading and Layering of Goals
Delivery Group
HR Group
Organization
- 19. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 19
Purpose of Strategic Measures
–Convert a strategic objective
(stated in English) into a
measurable target (stated in
numbers)
- 20. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 20
Objectives
• Fast ground
turnaround
Statement of
the strategy
Target
• 30 Minutes
• 90%
Performance
Needed
• Cycle time
optimization
Key action
programs
InitiativeMeasurement
• On Ground Time
• On-Time
Departure
How success
will be
measured
Strategic Theme:
Operating Efficiency
Profitability
Financial
Learning
More
customers
Ground crew
alignment
Lowest
prices
Fewer planes
Customer
Internal
Fast ground
turnaround
Strategy Map: Cause-and-effect
between strategic objectives
Flight
Is on time
Balanced Scorecard: Airline example
- 21. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 21
Objectives
• Fast ground
turnaround
Statement of
the strategy
Target
• 30 Minutes
• 90%
Performance
Needed
• Cycle time
optimization
Key action
programs
InitiativeMeasurement
• On Ground Time
• On-Time
Departure
How success
will be
measured
Strategic Theme:
Operating Efficiency
Profitability
Financial
Learning
More
customers
Ground crew
alignment
Lowest
prices
Fewer planes
Customer
Internal
Fast ground
turnaround
Strategy Map: Cause-and-effect
between strategic objectives
Flight
Is on time
Balanced Scorecard: Airline example
INITIATIVE
LEAD MEASURE
LAG MEASURE
- 22. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease Cost
• FAA On Time Arrival
Rating
• Customer Ranking (Market
Survey)
• On Ground Time
• On-Time Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew training
• Quality management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Customer
Internal
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
Balanced Scorecard: Airline Example
- 23. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 23
The Balanced Scorecard Measures
Lag Measures
Eg : Year-end-sales,
Market Share
Strategic Objective
Outcome Measures
At the end of a
time period
Lead Measures
Eg : Hours spent,
Product Mix
Performance Drivers
Intermediate
Processes
Hours Studied for
Entrance Exam
Marks/ Rank in
Entrance Exam
College
Admitted to
Efforts in
College
Marks/ Rank in College
Category
Of
Hiring
Company
Preparation
For Job Interview
- 24. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 24
Selecting BSC Measures
•Caution
•Do not select what can be
measured: select what
“should” be measured
•Ensure balance between
lead and lag measures
•Have a practical number of
measures
- 25. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 25
Attributes of Measures in BSC
• Identify measure(s) for each goal
• Each measure will have the following elements
– The corresponding goal/ objective in the strategy
– The measure
– The operational definition of the measure
– Type (Lead or Lag)
– Past values for measure (for defined time period)
– Target (values and time periods they correspond to)
• For different periods (1 year, 2 year, 5 year)
– Reporting Vehicle and Frequency
– Person responsible for measuring and reporting
– Person responsible for meeting target
- 26. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 26
A completed Balanced Scorecard example
Obj
No.
Objective Measure Type Unit Frq.
Obj.
Resp.
Data
Resp.
Actual Target Initiatives
PBT Lag RsCr m TS
RevenueMarketShare Lag % q TS
Revenue Lag RsCr m TS P1
MonthlyChurn Lag nos m MK
Subscriberbase Lag nos m OM
F3 Manageriskeffectively Averagecollections/billcycleafter25days Lag % m TA AR P5
Averagecollections/billcycleafter60days Lag % m SNK
BadDebt Lag % 1/2y CP
Acquisitioncostpersubscriber Lag Rs 1/2y KS P4
Costtoservepersubscriber Lag Rs 1/2y KS
Costoffunds Lag % q KS
C1 OfferVFM&rewardloyalty Averagecustomerlifetime Lag Months q MI DS P2
Callsper1500subscribers Lead nos m GA
Complaintsper1500subscribers Lead nos m GA
Customersurveyindex Lag Index q GA
Averageacquisitions/dealer Lead nos m GA P11
Averageactivations&recharges/distributor Lead nos m GA
C4 Receivesuperior trainingfor team DealerSatisfactionIndex Lag Index q AA CR P10,P6
C5 GetHRsupportforidentification&recruitmentofsalesexecutives DealerSatisfactionIndex Lag Index q CS BB P9,P11
C6 ReceiveadequateROIopportunity AverageROIfordealers Lag % q RN KSK P22
I1 Significantlyreduce churn MonthlyChurn YK P14,15
#salesexecutivesperdealer Lag % q VS
#outletsperdistributor Lag % q VS
%penetrationofnewproducts,services Lag % q DS
Averagechannelcost/acquisition Lag Rs q KSK
Advtg&promocostas%ofsalesrevenue Lead % q KSK
I4 Targetproducttoappropriatesegments Penetrationintargetedsegment Lag % q TK RD
Customerservicedeliveryindex Lead Index q ON
Networkservicedeliveryindex Lead Index q MK
I6 Improvecollection
processes
Averagecollectionperiod IM
Subscribers/employee Lag nos q RCX
Revenue/employee Lag Rs. q RC
EmployeeSatisfactionSurveyRating Lead Index 1/2y RC
L2 Closeskillgapsbyregulartraining Skillgapsclosed Lead % q OR RC
L3 Rationalize organizationalstructure KMSachieved Lead % q MK RF
L4 Buildstrongsystemssupport&knowledge-base ITDeliveryIndex Lag Index 1/2y SR PP
L5 Improvecoordinationbetweenalldepartments # forummeetingsheld Lead nos q OJ KK
AR
RJ
GS
KD
PL
C3 Receivesustaineddemand
Ensuresuperiorservicedeliverylevelsatcontactpoints
MRD
AS
UP
LK
F1
I3 Createandexecuteacoordinatedsales&marketingplanbykeysegments
F4
Achievesustainedprofitability(PBT) fromMarch2000
Improveoperatingefficiency
C2 Getreliable&consistent service
Meetvolume&revenuetargetsbysignificantlyincreasing subscriberbaseF2
L1 Improveemployeemotivation&productivity
I2 Growdealersalesforcetoincreasecustomerreach;andincreasewidthinretail
I5
Illustrative
- 27. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 27
Initiatives and the Strategy
• We need initiatives to
achieve the objectives
• Initiatives may impact
different objectives in
different ways
– Strongly or weakly
– Directly or indirectly
– Positive or negatively
– In the short-term and the long-
term
• We must evaluate each
proposed initiative, and
prioritize and select
Lean
Lean
- 28. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 28
Where do Strategy Maps and BSC fit in the overall scheme
of things?
Individual Performance Goals
(What I need to do)
Values
(What is important to us)
Vision
(What we want to be)
Strategy
(Our Game Plan)
Strategy Maps
(How the strategy translates)
Balanced Scorecard
(Measure and Focus)
Initiatives
(What we need to do and change)
Mission
(Why we exist)
Adapted from Strategy Maps by Kaplan and Norton
- 29. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 29
BSC and Individual Performance Goals
Individual Performance Goals
For Shredni Vashtaar
BNS LOB Goals
1. Revenue
2. Profits
3. New Orders
4. Repeat Orders
5. Order of New Services
6. Compliance to Statutory ..
7. Productivity
8. Cycle Time
9. Customer Satisfaction
10. Attrition
11. Employee Engagement
12. Competency Growth
13. Ready Successors
14. Patents Registered
Shared Goals
1. Company Revenue
2. Company Profits
3. Success of eMAGE project
4. Making Shegdeng facility operational
Additional Goals
1. Learning and Developing …
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
LOB BSC
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
Org BSC
eMAGE Scorecard
Shengdeng Scorecard
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
• % Ground crew
trained
• % Ground crew
stockholders
Objectives Measurement
• Market Value
• Seat Revenue
• Plane Lease
Cost
• FAA On Time Arrival
Rating
• Customer Ranking
(Market Survey)
• On Ground Time
• On-Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
• Cycle time
optimization
program
• ESOP
• Ground crew
training
• Quality
management
• Customer loyalty
program
Target
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• 30 Minutes
• 90%
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Custome
r
Interna
l
Fast Ground
Turnaround
Flight
Is on Time
• Profitability
• More
Customers
• Fewer planes
• Flight is on -time
• Lowest prices
• Fast ground
turnaround
• Ground crew
alignment
Personal development
Other Scorecards
An individual’s performance targets should be derived from all relevant scorecards.
Depends on
•roles and responsibilities,
•initiatives involved in
- 30. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 30
Elements to Balance and Align
• Align objectives across multiple
perspectives (financial, customer,…)
• Align measures to the objectives
• Ensure balance between lead and lag
measures
• Align initiatives to the objectives
• Maintain alignment while cascading
– Org division/ dept projects individuals
- 31. © Rajesh Naik, 2009
Released under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License license 31
Success Factors for Strategy Implementation
• Roll–out needs to be driven as a “Project”
• Initial co-ordination
• Integration amongst the individual objectives,
measures & initiatives
• Senior level Strategy Implementation Project
Leader
• A Strategy Implementation Core Team
- 32. © Rajesh Naik, 2009
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Common Pitfalls
• Middle Management Team: Lack of Senior
Management Commitment
• Done by One or Two Individuals
• Held at the Top: For Senior Management
Only
• Too Long a Development Process: “Best
Becomes the Enemy of the Good”
• Done Only for Compensation
• Ignoring the aspect of Change Management
• Lack of communication & awareness
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Communication and Awareness
• Every employee should be able to related his/
her goal to a higher level goal
• Every action by the management is a
communication – many actions need explicit
communication to provide a perspective
– Why did we take up the retail supply chain
management project when we said we are
specializing in the insurance domain?
– Why are we hiring so many senior level managers
when we said that we will promote internal talent?
– Why have we signed up many projects with small
customers when we said we will focus on Fortune 500
companies?
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The Journey - How Balanced Scorecard has evolved
Measurem
ent
System
Strategy
Implementat
ion
Total Strategy
Management
Articles in Harvard Business
Review:
“The Balanced Scorecard —
Measures that Drive
Performance” January -
February 1992
“Putting the Balanced
Scorecard to Work”
September - October 1993
“Using the Balanced
Scorecard as
Strategic Management
System” January - February
1996
1996 2000 2004
1992 1996 2000 2004
Managing
Alignment
2006
2006
Note: Concepts in this presentation have been sourced from these books
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About this Presentation
More resources on the subject are available from the creator of this presentation at:
http://www.rajeshnaik.com
© Rajesh Naik, 2009
This work is released under a Creative Commons Attribution-
NonCommercial-ShareAlike 3.0 Unported License license. This means you
can use it for non-commercial purposes so long as you include the copyright
line “© Rajesh Naik, 2009". If you create derivative works using this work,
they should also be made available under a similar license. For further
information go to http://creativecommons.org/licenses/by-nc-sa/3.0/ For
uses outside the scope of the license, contact Rajesh Naik at
naik.rajeshnaik@gmail.com
Author: Rajesh Naik
Consulting Partner
QAI India Limited
rajesh.naik@qaiglobal.com
naik.rajeshnaik@gmail.com
+91 9845488767
- 36. © Rajesh Naik, 2009
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Thank You
Rajesh Naik
Founding Partner
QAI India Limited
Email
naik.rajeshnaik@gmail.com
Mobile
+91 9845488767
Website
www.rajeshnaik.com
Also, have a look at the latest “business novel”:
Aligning Ferret: How an Organization Meets
Extraordinary Challenges
By Swapna Kishore & Rajesh Naik
Available at Amazon:
http://www.amazon.com/dp/B00CZA94XC