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1、Master Sun Consulting,Balanced Scorecard-Tool for Value CreationBusiness Audit:Agenda for Scorecard Led Transformation Strategy Maps to Individual ScorecardCaselet Service Industry:ICICI BankCaselet Manufacturing:Texmaco JakartaCaselet Marketing&Sales:Tata Steel Wire Division,Why Need a Balanced Sco
2、recard?,The Source of Value Has Shifted From Tangible to Intangible Assets,Intangible Assets,Tangible Assets,38%,62%,85%,38%,15%,62%,1982,19921,20002,percentage of market value related to,1.Brookings Institute2.Baruch Lev analysis of S&P500 companies,Value Creation:Intangible Assets,Intangible Asset
3、s Do Not Have A Direct Impact on Financial Results They Have Second-or Third-Order ImpactsConventional approach to managing financial&operational indicators insufficient Balanced Approach to Strategy Implementation should includes focus on customer/stakeholder&learning,growth&innovation Understandin
4、g&managing/leveraging inter-relationships between the above areas necessary for value creation,Service Quality,Customer Confidence,Revenue,Customer Retention,Training,InformationTechnology,Balanced Scorecard as a Tool for Business Excellence,Malcolm Baldrige,Balanced Scorecard,Leadership,Learning&Gr
5、owth Perspective,Human Resource Capital,Business Results,Process Management,Strategic Planning,Strategy Map,Learning&Growth Perspective,Internal Process Perspective,Customer Focus,Customer Perspective,Targets,Financial Perspective,Balanced Scorecard,Balanced Scorecards key theme is not about Measure
6、ment as the term would outwardly convey Its about Value creation-Execution of Strategy,Balanced Scorecard:Synonym for Managing Performance,Introduced in 1992,by Robert Kaplan and David Norton,the Balanced Scorecard is the most commonly used framework for ensuring that companies execute their strateg
7、iesToday,about 70%of the Fortune 1,000 companies utilize the Balanced Scorecard to help manage performance.,Balanced Scorecard Links Vision&Strategy to Personal Objectives,VISIONWhat we want to be,STRATEGYOur game plan,PERSONAL OBJECTIVESWhat I need to do,Master Sun Consulting,Balanced Scorecard-Too
8、l for Value CreationBusiness Audit:Agenda for Scorecard Led Transformation Strategy Maps to Individual ScorecardCaselet Service Industry:ICICI BankCaselet Manufacturing:Texmaco JakartaCaselet Marketing&Sales:Tata Steel Wire Division,Strategy Implementation Process,Sustained Strategy,Strategic Direct
9、ion,Strategic Guidelines,Strategy,Stage,Output,Institutionalization of the process,Identification&definition of areas of improvement,Development of solution and testing,Implementation of solution across all units,Activity,Business Audit Areas,Business Health Check Depending on the critical needs of
10、a business,at a point of time,the Business Health Check will focus on some or all of the following areasBusiness Performance AnalysisStrategy Planning AnalysisOrganization Culture AnalysisProcess&Systems AnalysisOperations AnalysisMarketing AnalysisSales&Distribution AnalysisCustomer satisfaction an
11、alysisAudit sets an agenda for transformation&also outlines the strategic thrusts for scorecard implementation,Master Sun Consulting,Balanced Scorecard-Tool for Value CreationBusiness Audit:Agenda for Scorecard Led Transformation Strategy Maps to Individual ScorecardCaselet Service Industry:ICICI Ba
12、nkCaselet Manufacturing:Texmaco JakartaCaselet Marketing&Sales:Tata Steel Wire Division,Scorecard Design&Rollout,BALANCED,SCORECARD,S T R A T E G Y,Mobilize change through executive leadership,Change people,make strategy everyones everyday job,Align the organization to create synergies,Translate the
13、 strategy to operational terms,Integrate improvement programmes with scorecard,Scorecard Design&Rollout,BALANCED,SCORECARD,S T R A T E G Y,Translate the strategy to operational terms,Brand/product development,sales,service,operations,logistics.Activities needed to create the required customer value
14、propositionand differentiation and the desired financial outcomes,Organization infrastructure,skills,capabilities,knowledge of employees,working climate.The ability to execute internal business processes in newdifferentiated ways,Who are the target customers that will generate the revenue growth?Wha
15、t are the objectives and how do we measure success with them?,What are the financial objectives for growth and productivity?What are the major sources of growth?,Translate:Strategy into 4 Components,Patent Score for Process ImprovementsSWIFT Training to Branches,Terminator Workshops,Performance with
16、in TATsQualityProductivity%Complaints to TransactionsBranch Contacts with Customers,Delivery Success Rate%,Research,Education&Teaching,Translate:Terminator Zero Unhappiness,Internal Processes,Mission,To ensure that the all causes of Unhappiness for Customer are Terminated in order for the bank to vi
17、e for Service Leadership,Customer ComplaintsCustomer Feedback ScoresRepeat ContactsRequest Closure beyond 24 Hours,Customer,Cost of Complaints%of Business through Cross SellingAverage Revenue Per Customer,Financial,Leading,Definition,Lagging,Input,Output,Outcome,Objective/Quantitative,Example,Interm
18、ediate outcomes that predicts or drive bottom-line performance results,Measure Type,Bottom-line performance results resulting from actions taken,Amount of Investments,assets,equipment,labor hours,or budget dollars used,Units of a product or service rendered-a measure of yield,Resulting effect(benefi
19、t)of the use or application of an output,Empirical indicators of performance,Subjective/Qualitative,Perceptions and evaluations of major customers and stakeholders,Employee turnover rate,Employee satisfaction rating,Number of Value Meal orders fulfilled,Customer satisfaction rating,Wait time,Custome
20、r complaints received as a%of total customers served,Number of cashiers,Translate:Types of Measurements,Scorecard Design&Rollout,BALANCED,SCORECARD,S T R A T E G Y,Align the organization to create synergies,Align:Use Strategy Map to Build Cause&Effect Relationships,Improve ROCE,Revenue Growth Strate
21、gy,Productivity Strategy,Build the Franchise,Increase Customer Value,Improve Cost Structure,Improve Asset Utilization,A Motivated and Prepared Workforce,New Revenue Sources,Customer Profitability,Cost per Unit,Asset Utilization,Price,Financial Perspective,Customer Perspective,Internal Perspective,Le
22、arning&Growth Perspective,Product/Service Attributes,Strategic Competencies,Strategic Technologies,Climate for Action,“Build the Franchise”,“Increase Customer Value”,“Achieve Operational Excellence”,(Innovation Processes),(Customer Management Processes),(Operations&Logistics Processes),Customer Valu
23、e Proposition,Quality,Operational Excellence,Product Leadership,Customer Satisfaction,Customer Acquisition,Customer Retention,Time,Function,Service,Relations,Brand,Relationship,Image,Market Share,Review,Review,Review,Review,Review,Review,Review,Review,Review,Align:Flow of the Scorecard AlongThe Orga
24、nization,Production Shift Scorecard,Packing Shift Scorecard,Production Daily Scorecard,Maintenance Daily Scorecard,Department Weekly Scorecard,Packing Daily Scorecard,PC/QC Daily Scorecard,Maintenance Weekly Scorecard,PC/QC Weekly Scorecard,Plant Head:Weekly Value Loss Scorecard&Analysis,Manpower In
25、dex(SMI),Non Energy Cash Costs(NECC),Maintenance Index(MI),Man HoursUnit of Hardware,Unit of Hardware is a constraint,Man Hours is not a constraint,Man Hour Categories,Standard Hours,Turnaround Hours(Outside of current scope),Other Hours(Outside of Maintenance Engineering Services),Contractor Hours,
26、Shell Hours,Skills constraint,Risk constraint,Profit constraint,Equipment constraint,Shell hours constraint,Response Time=Sigma Job Time Raised Job Time Closed No.of Jobs,Availability=(Total m/c hrs)-(m/c downtime hrs)x 100(Total m/c hrs),Reliability(MTBF)=(Total m/c hrs)-(m/c downtime hrs)No.of Bre
27、akdowns,Maintainability(MTTR)=(m/c downtime hrs)No.of Breakdowns,PM Index=No.of m/c for which PM is carried out No.of m/c due for PM,Crew Utilization=Total earned hrs x 100 Actual available hrs,MMTR=Mean Time To Repair,MTBF=Mean Time Between Failures VersusMTBM=Mean Time Between Maintenance?,Backlog
28、 Hours=Sigma Job in queue x standard time,Cost=Actual Job Cost+Lost Opportunity,Routine Index(MI),Turnaround Index(MI),Maintenance Capex,Maintenance Costs,Inspection Costs,Routine Costs,Plant transformations,Extraordinary Costs,Operating Costs,Contractor Costs,Turnaround Cost(Outside of current scop
29、e),Equipment Constraint Hours,Risk Constraint Hours,Skills Constraint Hours,Profit Constraint Hours,Non Constraint Hours,RCA Design%,RCA Installation/Repair%,RCA Utilization%,RCA Preventative%,RCA Planned%,Maintenance Schedule Adherence,Planning Accuracy=Actual Hours/Estimated Hours,Align:KPI Roll D
30、own Oil Refinery,Align:Lowest Organism in the Food Chain,Mobil Truck DriversTruck drivers were initially skeptical about how they could affect any of the corporate strategic themes.They knew that their job was to deliver to customers By driving safely and avoiding accidents truck drivers could impro
31、ve performance on all internal measures that were identified lower costs,reliable,on time,environmentally friendlyICICI-Fire in the BranchEvery single mistake by a branch added up to a lot of failures countrywideSingle complaint in a branch will bring the branch to a standstillWould track to one act
32、ivity not being done by a single personRefer to Drawer syndrome,Align:Balanced Scorecard with Organizational Design,Job based on the Scorecard Matrices rather than on position descriptions,reporting relationships,and title transformations?To what extent does your organization encourage individuals,r
33、egardless of job description,to search for innovation&growth?Brief on how your job impacts the KPIs of other department?Extent you feel you receive a sufficient amount of feedback from internal and external sources to help you improve what you do?Extent balanced scorecard tied to the transformation
34、initiative?Extent performance appraisal system integrated with balanced scorecard KPIs?Extent does your current compensation/promotion system support/promote balanced scorecard KPIs?Extent do you understand what you must do to satisfy the customers needs?,Align:Mission Zero Unhappiness,Scorecard Des
35、ign&Rollout,BALANCED,SCORECARD,S T R A T E G Y,Change people,make strategy everyones everyday job,Conscious,Unconscious,Incompetent,Competent,Direct,Delegate,Support,Coach,The Four States of Mind!,Minds Path Matrix,No shortcuts possible.,Change:Minds Path Matrix,Change:Minds Path Matrix,Compliance,C
36、ulture,Understanding,Usage,People understand that they are“being told”to do something new.God knows why because they dont see the use of it!This is normally viewed as extra non-value added responsibility.If you stop checking,they will stop trying.,People start realising why the data recorded in the
37、system might be of use to them and the business in the future.Process transformation begin to inspire confidence There is some light at the end of the tunnel.You still need to keep them on close track however.,Recording this new or extra data and working in a new way has now become a fact of life.Pr
38、ocess compliance is highThey now start using(read:analyzing)the scorecards.Meetings are held to review the data.The wheel starts turning!,Change:Minds Path Matrix,Compliance,Culture,Understanding,Usage,People understand that they are“being told”to do something new.God knows why because they dont see
39、 the use of it!This is normally viewed as extra non-value added responsibility.If you stop checking,they will stop trying.,People start realising why the data recorded in the system might be of use to them and the business in the future.Process transformation begin to inspire confidence There is som
40、e light at the end of the tunnel.You still need to keep them on close track however.,Recording this new or extra data and working in a new way has now become a fact of life.Process compliance is highThey now start using(read:analyzing)the scorecards.Meetings are held to review the data.The wheel sta
41、rts turning!,People dont think about the new system&processes anymore.It is THEIR system now.They fully optimize the usage of data gathered at all levels.They use the Scorecards to drive improvements in business performance.They improve details of the systems as per the requirements.,Success,Hope,Pr
42、oblemDefinition,Solution Development,Solution Implementation,Culture Change,Pain,The Minds Path To Success,Change Management,Change:Keep Scorecards Focused,At least one objective/measure per perspective No more than 15 measuresPersonal scorecard must support supervisors scorecard Every supervisor mu
43、st have an objective and measure for coaching and employee development Scorecard must include an objective and measure that supports another part of the business,Key Issue:RTO returns would sit at the branches,waiting for customer to collect them Solution:Outbound Calling Every deliverable cleared r
44、esulted in a happy customer,lesser rework&cost savingsAverage Contact Ratio:65%,Data:Nov04-Jun 05,Change:RCA Deliverables Not Received,Change Management:Link to Incentives,ICICIZero Unhappiness BranchesVNCIncremental Performance over Base Performance is rewardedSales Reps often make incentive over a
45、nd above salaryPerformance observed over a quarterly period to avoid monthly manipulations,Change:Assessment Management System,“If you cant measure it,you cant manage it.”,The secret to successful change management is to be able to assess and measure your progress through the minds path Change Manag
46、ement Assessment System The four mindsets must be measured by Auditing.Auditing is a quantitative measure of a qualitative,Audit questionnaires are developed to assess the mindset levels using a structured approach:Closed ended questions for compliance.Open ended questions for understanding.Demonstr
47、ative questions for usage.,The audit questionnaire answers get converted into a scoring scheme0 for wrong or not done.1 for partially right or partly done.3 for correct or demonstrated.The percentages of each system performance category are plotted The target is 100%.,Change:Assessment Management Sy
48、stem(CAMS),Installation Status,0%,10%,20%,30%,40%,50%,60%,70%,80%,90%,100%,-5,-4,-3,-2,-1,0,Current,Period,Achievement,Installed,Partially Installed,Not Installed,Installation Status,Change:Assessment Management System(CAMS),Ask the Head,Bulletin Boards,Newsletters,Classes,Training Workshops,Company
49、 Intranet,Change:Training&Communication,Change:Training in Problem Solving Decision Making,Objective:The Program intends to provide an insight to the participants into the techniques for confronting the issues and arrive at alternatives toresolve them effectively using various tools and techniques.T
50、he program isstructured to provide an exposure to the systematic approach to logicaldecision making for attaining most optimal use of resources and enhanceeffectiveness.Proposed Program Contents:Problem SolvingA conscious,systematic approach for analyzing situations and articulatingproblems,underlyi
