The Balanced Scorecard

Module One
Benefits of Strategic
Management and Planning
The Strategy Focused Organization (SFO).

Why
h Implement
l the
h Balanced
l d Scorecard.
S d
Strategic Planning Needs and Benefits.
A Strategic Planning Model.
Meirc Training & Consulting BSC - Mod 01 - 1
The Strategy-Focused Organization (SFO)
¾ Principles of a Strategy-Focused
Organization
9 Translate the Strategy to Operational
Terms
9 Align the Organization to the Strategy
9 Make Strategy Everyone’s
Everyone s Everyday Job
9 Make Strategy a Continual Process
9 Mobilize Change Through Executive
Leadership
Hence: The Balanced Scorecard
Why Implement the BSC?
To achieve strategic objectives.
To provide quality service with fewer
resources.
To eliminate non-value added efforts.
To improve customer service
service.
To track progress.
T continually
To ti ll improve.
i
To increase accountability.

The Existing Nature of Strategy
Strategy is everywhere – sports teams
have strategies
strategies, as do political parties
parties,
and, more personally, people have
strategies.
organizations have strategies – or they
are supposed to.
to
In management theory, the focus on
strategy reflects significant changes in
the corporate environment that have
occurred in recent decades
decades.
Historical Origins of Strategy
Does Strategy have a long history? Or is it a
recent phenomenon? ……………………………
Can strategy be traced back to ancient times?

………………………………………….................
Or is it a post World War 2 invention? …………

Historical Origins of Strategy

Strategy: Ancient Greek style
Strategy dates from 508-7 bc in
Ancient Athens
Athens.
Ten Strategoi
g made up the
Athenian War Council.
Origins of Strategy:
Strategos (the general) derives
from stratos (the army) and agein
(to lead)
Strategy: Some Famous Quotes
“Without a strategy the organization is like a
ship
hi without
ith t a rudder,
dd going i around d iin
circles.” Joel Ross and Michael Kami
"The
The future doesn't
doesn t just happen -- itit'ss shaped
by decisions." Paul Tagliabue
"In
In the long run
run, we shape our lives
lives, and we
shape ourselves... the choices we make are
ultimatelyy our own responsibility."
p y Eleanor Roosevelt
“Management’s job is not to see the company

as it is….but as it can become.”
Sharon Oster, Business Strategist

Classical Definitions
Strategia (Latin): A maneuver

designed to surprise and deceive
the enemy.y
Strategy (Sun Tzu): “To subdue

the enemy without fighting
fighting…”

Strategic Planning: Few Definitions
Strategic planning is the process of
determining a company's long-term goals
and then identifying
f the best approach for
f
achieving those goals.
Strategic
g p planningg is a tool for organizing
g g the
present on the basis of the projections of the
desired future. That is,, a strategic
g p plan is a
road map to lead an organization from
where it is now to where it would like to be
in five or ten years.
Individual Exercise
What are in your opinion the main barriers that
stop organizations from achieving their optimum
productivity
d ti it llevels?
l ?
¾ .
¾ .
¾ .
¾ .
¾ .
¾ .
¾ .
¾ .

Individual Exercise
¾ .
¾ .
¾ .
¾ .
¾ .
¾ .
¾ .
Source: Gulf News, Sep 22, 2007

The Six Barriers to Optimum
Productivity
Based on the findings from 1668
detailed studies undertaken at 100
companies
i iin nine
i countries
ti
(Australia, France, Germany, South
Africa, Spain, UK, USA, Hungary &
Austria), the main six barriers to
optimum productivity, include the
g
following:
Source:http://www.proudfootconsulting.com/documents/11112-UKMM0904%20English.pdf

The Six Barriers to Optimum Productivity
Barrier Types 2001 2002 2003 2004
¾Insufficient
management 43% 43% 41% 40%
planning & control
¾Inadequate supervision 22% 23% 26% 32%
¾Ineffective communication 7% 7% 6% 8%
¾Poor working morale 14% 12% 11% 8%
¾Inappropriately qualified 6% 7% 9% 8%
staff
¾IT-related problems 8% 8% 7% 4%
The above results are based on more than 10,000 hours of observational study of real people doing real work in medium and large sized firms.

Benefits of Strategic Planning
Communicates a sense of purpose

Increases productivity
More efficient use of limited resources
Increased motivation and morale
Proactive decision-making
Team building

Need and Benefits of a Strategy
Active Making the

ATTITUDE future
TOWARDS Adapting to
THE the future
FUTURE Drifting into
the future
Passive
Reactive Active Proactive
WAY OF ACTING
The Elements of the
g Planning
Strategic g Process
The 7-Step Model

THE STRATEGIC PLANNING PROCESS
B
GETTING READY A
L
A
ANALYSIS OF ENVIRONMENT (SWOT) N
C
REVIEW OF VISION / MISSION E
D
GOALS and OBJECTIVES S

C
STRATEGIES/INITIATIVES/ACTION O
R
E
PERFORMANCE MEASURES (KPI’s) C
A
CONTROL (KPI Targets Vs Actuals) R
D
Getting Ready Step
p
1
Are the leaders truly committed?
Are they able to devote the necessary resources?
Money, People, Training
Is the organization relatively free of major crises?

Is the board and staff on good terms?
Is the board and staff trained on the process? and
Is there a willingness to question the status quo
and to look at new approaches to performing and
evaluating the "business" of the organization.
“Before everything else, getting ready is the secret of success” Henry Ford
Getting Ready Step
1
Requirements
q of Strategic
g Planning: g
Where are we now? (The situation)
How did we get here? (Our momentum)
Where are we going? (The direction)
Where should we be going? (Desired

direction)
How will we get there? (The Strategic
Plan)
Source: Strategic Planning: Lead your association with a plan for tomorrow; John Bailey; Leadership Magazine

The BSC: Achieving Performance Excellence
Case Study,
y, STAR MEDICAL CENTRE
Getting Ready
You have jjust accepted the jjob of Managing
g g Director in an out-patient Medical
Centre (Star Medical Centre - SMC). You were hired for this job due to your
reputation of excellent managerial skills in general, and specifically for your
knowledge in Performance Measurement and Benchmarking. As the new
Managing Director
Director, your aim is to increase the profitability and reputation of
SMC. A brief background of SMC includes the following:
Founded 10 years ago.
Owned by 4 non-managing
non managing investment partners
partners.
Previous Managing Directors have all worked on a profit sharing formula
and have all been concerned with short term results. There were three
Managing Directors in the last 10 years.
The centre is open 09:00 – 17:00. Five days per week.
Staff turn-over in SMC is on the high side. Major reasons for staff (Doctors,
Assistants, Technicians and Support Staff) resignations have been low
salaries,
l i no professional
f i lddevelopment
l t programs, many unmett promises,
i
work pressure & poor treatment.
Case Study,
Getting Ready
SMC currently has 15 multidiscipline specialized doctors with excellent
background and reputation. Average number of years with the centre is three
years. They are supported by 30 support staff along with three laboratory
technicians. The lab is equipped with state-of-the-art equipment.
Major patients / clients complaints in the past included:
No respect for confirmed appointments & long waiting time.
Poor medical records system.
Patients unable to build a relationship with the doctors and staff due to
high levels of resignations.
Poor services from the laboratory (mainly due to delays in issuing
results)
lt )
Accounting mistakes in the invoices.
Poor customer service rendered by the SMC de-motivated staff.
Uncomfortable
U f t bl waiting
iti rooms.
Poor parking facilities.

Case Study,
Getting Ready
One of the major j deficiencies in the centre is the ppoorly
y managed
g
appointment system.
The ratio of repeat / referred patients is not known. However, it is felt that
repeat patients are not too many although the centre have always had
excellent
ll t d
doctors
t along
l with
ith excellent
ll t llab
b equipment.
i t
The centre does not have any major marketing strategy and rely on walk-in
patients and corporate contracts, relying on the reputation of their doctors.
SMC have had many contracts with local companies and insurance
companies in the last few years. However, few of those contracts were not
renewed by those clients (no solid data available).
The centre
centre’ss profitability (return on cash employed) in the last 5 years was
deteriorating as follows: 28, 22, 17, 15 & 13 percent.
The centre has a good financial history with the local banks and there are
no liquidity/cash issues.

Case Study,
Getting Ready
In your first week on the job you prepared the SMC Mission Statement
Statement, which reads as
follows:
“Our
Our Mission at SMC is to achieve commercial
success by providing the highest quality of
medical service to our customers. That
includes: quality service,
service accurate
appointment and invoicing systems,
convenience, value for money and efficient
service from a friendly
friendly, helpful
helpful, qualified and
satisfied staff”.

Group Exercise: Getting Ready Step
1
As the future champions and users of the SMC’s
Balanced Scorecard,, what are the values that you
y
would be committed to?
¾ .
¾ .
¾ .
¾ .
¾ .
What authority would you like to have and what
should you be accountable to?
¾ .
¾ .
¾ .

Module Two
SWOT Analysis, Vision and
Mission Statements
The Purpose of SWOT Analysis.

SWOT in Brief.
Brief
Definition of Vision and Mission Statements.
"The
The ultimate measure of a man is not where he stands in moments of comfort and
convenience, but where he stands at times of challenge and controversy."
- Martin Luther King, Jr.

B
GETTING READY A
L
A
(2) ANALYSIS OF ENVIRONMENT (SWOT) N
C
REVIEW OF VISION / MISSION E
D

C
STRATEGIES/INITIATIVES/ACTION PLANS O
R
E
A
D
SWOT in Brief Step
2
Strengths – identifying existing
organisational strengths
Weeaknesses
esses – identifying
de y g existing
e s g
organisational weaknesses
Opportunities – what market opportunities
might there be for the organisation to
exploit?
l it?
Threats – where might
g the threats to the
future success come from?
The purpose of SWOT Analysis
It is an easy-to-use tool for
developing an overview of a
company’s
company s strategic situation
¾ It forms a basis for matching
your company’s strategy to its
situation.

Assessment
Strength’s
• Strength’s
Strength s – Those things that you do well
well, the
high value or performance points
• Strengths
g can be tangible:
g Loyal
y customers,,
efficient distribution channels, very high quality
products, excellent financial condition
• Strengths can be intangible: Good leadership,
strategic insights, customer intelligence, solid
reputation,
reputation high skilled workforce
• Often considered “Core Competencies” – Best
leverage points for growth without draining your
resources
Assessment
Weaknesses
• Weaknesses – Those things that prevent you from

doing what you really need to do
• Since weaknesses are internal, they are within
your control
• Weaknesses include: Bad leadership, unskilled
workforce, insufficient resources, poor product
quality, slow distribution and delivery channels,
outdated
td t d technologies,
t h l i lack l k off planning,
l i ...

Assessment
Opportunities
• Opportunities – Potential areas for growth and

higher performance
• External in nature – marketplace, unhappy
customers with competitor’s, better economic
conditions, more open trading policies, . .
• Internal opportunities should be classified as
Strength’s
• Timing
Ti i may be b important
i t t for
f capitalizing
it li i on
opportunities

Assessment
Threats
• Threats – Challenges confronting the organization

organization,
external in nature
• Threats can take a wide range – bad press
coverage, shifts in consumer behavior, substitute
products, new regulations, . . .
• May be useful to classify or assign probabilities to
threats
• The
Th more accurate t you are in
i identifying
id tif i threats,
th t
the better position you are for dealing with the
“sudden
sudden ripples
ripples” of change

…Involves Asking 4 Questions…
What are the Strengths What Weaknesses
that account for your inhibit your performance
success today and will and effectiveness today
position you for and may prevent
success in the future?
success ini th
the ffuture?
t ?
What external factors What Threats (negative

offer Opportunities you factors in the external
should take advantage environment) may
of in order to increase prevent you from
your odds of success? achieving success?

…and Plotting Them in a Matrix…
GOOD BAD
Strengths Weaknesses
INTERNAL
L
Æ Æ
Æ Build on Æ Overcome
Æ Æ
Æ Æ
Opportunities Threats
ERNAL
Æ Æ
Æ Explore Æ Minimize
EXTE
Æ Æ
Æ Æ
You will need to take into consideration when developing strategic goals.

SWOT Analysis: A Hospital
Strengths: Our hospital is well known for its provision of quality medical
care. During the year the hospital has strived to attract more members of
staff especially
p y nursingg staff. The nursing
g staffing
g levels have indeed been
better this year than in recent years. The coming of a young Medical
Doctor (Dr. xxx) will further strengthen the clinical department of the
hospital.
Weaknesses: A high nurse turnover has continued to affect nursing

services at the institution. Due to inadequate funds some planned
activities especially in the Primary Health Care department have not been
undertaken. Although we have continued to receive support from our
partners for which we are very thankful, we are conscious that we have
not made any real progress in becoming less donor dependent
dependent. The
hospital has been discussing possibilities of embarking on income
generating activities, however, the poor prevailing economic situation
makes such ventures risky. y

SWOT Analysis: A Hospital
Opportunities: The hospital continues to excel in its various endeavors because

of committed staff and a supportive working environment. These factors offer
opportunities
pp for expansion
p of hospital
p services especially
p y in Primary
y Health Care
department. The hospital with financial, material and human resources available
would go a long way in strengthening community-based interventions.
Threats:
Financial position of the hospital has not been well during the year. Although the
government pays salaries through the Health Association, they do not pay many
of the benefits or pay for several cadre of staff. Additionally while staff are
committed to working in an indigenous institution, the rising costs of food and
school fees combined with more lucrative offers from external non-profit
organizations for highly skilled staff, often requires the hospital to pay top-ups to
retain staff
staff. The hospital therefore struggles to meet the salary requirements
requirements.
There is a real need for the hospital to explore other means of sustaining the
running of their institutions through income generating activities and other donors
especially for community based activities.
Source: http://embangweni.com/Annu_report/2002Report/hosp_overview.htm

SWOT Analysis: Starbucks Corporation (2005)
Strengths.
Starbucks Corporation is a very profitable organization, earning in excess of $600 million
in 2004.The companyp y ggenerated revenue of more than $5000 million in the same yyear.
It is a global coffee brand built upon a reputation for fine products and services. It has
almost 9000 cafes in almost 40 countries.
Starbucks was one of the Fortune Top 100 Companies to Work For in 2005. The company
is a respected employer that values its workforce.
workforce
The organization has strong ethical values and an ethical mission statement as follows,
'Starbucks is committed to a role of environmental leadership in all facets of our business.'
Weaknesses.
Starbucks has a reputation for new product development and creativity. However, they
remain vulnerable to the possibility that their innovation may falter over time.
The organization has a strong presence in the United States of America with more than
th quarters
three t off their
th i cafes
f located
l t d in i the
th home
h market.
k t It is
i often
ft arguedd that
th t they
th needd to
t
look for a portfolio of countries, in order to spread business risk.
The organization is dependant on a main competitive advantage, the retail of coffee. This
could make them slow to diversifyy into other sectors should the need arise.

SWOT Analysis: Starbucks Corporation (2005)
Opportunities.
Opportunities
Starbucks are very good at taking advantage of opportunities. In 2004 the company
created a CD-burning service in their Santa Monica (California USA) cafe with Hewlett
Packard, where customers create their own music CD.
New products and services that can be retailed in their cafes, such as Fair Trade products.
The company has the opportunity to expand its global operations. New markets for coffee
such as India and the Pacific Rim nations are beginning to emerge.
Co-branding
Co branding with other manufacturers of food and drink
drink, and brand franchising to
manufacturers of other goods and services both have potential.
Threats.
Who knows if the market for coffee will grow and stay in favor with customers, or
whether another type of beverage or leisure activity will replace coffee in the future?
Starbucks are exposed to rises in the cost of coffee and dairy products.
Since its conception in Pike Place Market,
Market Seattle in 1971,
1971 Starbucks
Starbucks' success has lead to
the market entry of many competitors and copy cat brands that pose potential threats.
'Starbucks' mission statement is 'Establish Starbucks as the premier

purveyor of the finest coffee in the world while maintaining our
uncompromising principles while we grow.'
SWOT Analysis: Nike, Inc.
Strengths.
g
Nike is a very competitive organization. Phil Knight (Founder and CEO) is often quoted as saying
that 'Business is war without bullets.' Nike has a healthy dislike of its competitors. At the Atlanta
Olympics, Reebok went to the expense of sponsoring the games. Nike did not. However Nike
sponsored
p the top
p athletes and ggained valuable coverage. g
Nike has no factories. It does not tie up cash in buildings and manufacturing workers. This makes a
very lean organization. Nike is strong at research and development, as is evidenced by its evolving
and innovative product range. They then manufacture wherever they can produce high quality
pproduct at the lowest possible
p price.
p If prices
p rise,, and pproducts can be made more cheaply
p y elsewhere
(to the same or better specification), Nike will move production.
Nike is a global brand. It is the number one sports brand in the World. Its famous 'Swoosh' is
instantly recognizable, and Phil Knight even has it tattooed on his ankle.
Weaknesses.
The organization does have a diversified range of sports products. However, the income of the
business is still heavily dependent upon its share of the footwear market. This may leave it
vulnerable if for any reason its market share erodes.
The retail sector is very price sensitive.
sensitive Nike does have its own retailer in Nike Town.
Town However,
However
most of its income is derived from selling into retailers. Retailers tend to offer a very similar
experience to the consumer. Can you tell one sports retailer from another? So margins tend to get
squeezed as retailers try to pass some of the low price competition pressure onto Nike.

SWOT Analysis: Nike, Inc.
Opportunities.
pp
Product development offers Nike many opportunities. The brand is fiercely defended by its owners who truly
believe that Nike is not a fashion brand. However, like it or not, consumers that wear Nike product do not always
buy it to participate in sport. Some would argue that in youth culture especially, Nike is a fashion brand. This
creates its own opportunities, since product could become unfashionable before it wears out i.e. consumers need to
replace shoes.
shoes
There is also the opportunity to develop products such as sport wear, sunglasses and jewellery. Such high value
items do tend to have associated with them, high profits.
The business could also be developed internationally, building upon its strong global brand recognition. There are
many markets that have the disposable income to spend on high value sports goods. For example, emerging
markets such as China and India have a new richer generation of consumers. There are also global marketing
events that can be utilized to support the brand such as the World Cup (soccer) and The Olympics.
Threats.
Nike is exposed to the international nature of trade. It buys and sells in different currencies and so costs and
margins
i are nott stable
t bl over long
l periods
i d off time.
ti Such
S h an exposure couldld mean that
th t Nike
Nik may be
b manufacturing
f t i
and/or selling at a loss. This is an issue that faces all global brands.
The market for sports shoes and garments is very competitive. The model developed by Phil Knight in his Stanford
Business School days (high value branded product manufactured at a low cost) is now commonly used and to an
extent is no longer
g a basis for sustainable competitive
p advantage.
g Competitors
p are developing
p g alternative brands to
take away Nike's market share.
As discussed above in weaknesses, the retail sector is becoming price competitive. This ultimately means that
consumers are shopping around for a better deal. So if one store charges a price for a pair of sports shoes, the
consumer could go to the store along the street to compare prices for exactly the same item, and buy the cheaper of
the two
two. Such consumer price sensitivity is a potential external threat to Nike
Nike.

Assessment
An Assessment Model: SWOT
Internal Assessment: Organizational
assets, resources, ppeople,
p culture,
systems, partnerships, suppliers, . . .
External Assessment: Marketplace,

Marketplace
competitor’s, social trends, technology,
regulatory environment, economic cycles
.
SWOT SWOT
Good Points Possible Pitfalls

• Easy to Understand • Needs to be
• Apply at any Analytical and
organizational level Specific
• Be honest about
your weaknesses

Example: Beirut as a Vacation Destination
( l the
(play h role
l off the
h Minister
i i off Tourism)
i )
One Strength: ____________________
One Weakness: __________________
One Opportunity: _________________
One Threat: _____________________
The Role of the Ministry of Tourism: Promoting tourism in Lebanon

Your Department SWOT Analysis
One Strength: _____________________
One Weakness: ___________________
One Opportunity: __________________
One Threat: ______________________

Star Medical Centre (SMC)
Step
SWOT Analysis 2
Group Exercise

SCR SWOT Analysis
One Strength: _____________________
One Weakness: ___________________
One Opportunity: __________________
One Threat: ______________________

SMC SWOT Analysis (Group Exercise)
Step
GOOD 2 BAD
Strengths Weaknesses
ERNAL
Æ Æ
Æ Æ
INTE
Æ Æ
Æ Æ
Opportunities Threats
EXTERNAL
Æ Æ
Æ Æ
Æ Æ
Æ Æ

Formulation of Vision &
Mission Statements
How a Vision, or Mission Statement is

Used.
“Dream lofty dreams, and as you dream, so shall you become. Your Vision
is the promise of what you shall one day be. Your Ideal is the prophecy of
what you shall at last unveil”. James Allen
B
GETTING READY A
L
A
ANALYSIS OF ENVIRONMENT (SWOT) N
C
(3) REVIEW OF VISION / MISSION E
D

C
STRATEGIES/INITIATIVES/ACTION PLANS O
R
E
A
D
Vision and Mission Statements
For any business to succeed, it must
know what it is about
about. It must be
able to clearly describe why it is
there,
h and
d what
h iit iis there
h to achieve.
hi
Developing
p g a vision and mission
statement is a way of articulating
these ideas to yourself
yourself, your
customers, your employees, and to
the world at large.
Vision and Mission Statements
A Business Vision that Inspires!
If yyou don't know where yyou are heading, g then yyou
can make any choice and go in any direction
(including backwards). The value in knowing your
fi l d
final destination
ti ti ((your vision)
i i ) iis th
thatt you can
choose to take the specific paths that lead you
there Your action is intentional and keeps you
there.
pointed in the right direction.
Vision statements can take many forms. They

answer the question: "What will success look like?"

What Is a Vision?
A vision is a passionate and
compelling statement of a
desired future - what we want
to be. A picture of the future
we seek to create.

A VISION IS
What you want to be

Future oriented
Un-achievable
Has a lifetime of 5, 10, or

more years
My vision … is …

Vision Components
• How the organization wants to be perceived in the

future – what success looks like
• An expression of the desired end state
• Challenges everyone to reach for something
significant – inspires a compelling future
• Provides a long
long--term focus for the entire
organization

The future will happen (one way or the other)
Strategic Planning begins with

the articulation of a vision…
…and ends when that vision is an

integral
g ppart off day-to-day
y y operations.
p
Examples…
If you can imagine it, you can achieve it; if you can
dream it,
it you can become it.
it (William Arthur Ward)
“If y
you can’t see it,,
you can’t become it.”
Some Famous Visions…
“Our vision is to put a PC on every desk in
every home”
home
Bill Gates, Microsoft Corporation, 1985
“Our vision is to export wheat instead of

importing it”
King Faisal bin AbdulAziz, Kingdom of Saudi Arabia, 1970’s
“Our vision is to become one of the top

tourist destinations…”
Sh ikh Mohammed
Sheikh M h d bin
bi Rashed
R h d Al Maktoum,
M k UAE,
UAE 1996

Now, Try Limiting Your Vision:
“I think there is a world market for maybe FIVE
computers”
p
Thomas Watson, Chairman of IBM, 1943
“There
There is no reason anyone would want a computer in
their home”
Ken Olson, President & Founder of DIGITAL Equipment Corp. 1977
“Airplanes are interesting toys, but of no military

value”
Marshal Ferdinand Foch in 1911, Professor of Military Strategy
Ecole Superieure de Guerre, France
Remember: "If
If you can dream it,
it you can do it.
it "
Walt Disney
“What
What you get
is what yyou see…”
If yyou only
y look at what is,, yyou might
g never attain
what could be. (Anonymous)
Vision Statement
A vision is a passionate and compelling statement
of a desired and preferred future - what an
organization WANTS to be;
A vision carries an organization OVER the
barriers of the current situation;
A vision describes the character of the
organization and how it ought to function.
What a company aspires to be or Where a

company dreams of going

Benefits of a Clear Vision
Provides focus at both the strategic and operational
levels;
Gives specific guidance to members of your
department about what is expected of them and
why;
Guides decision-making and help to avoid and
resolve conflict;
Contrasts the world as it is and the world as you
would like it to be;
Inspires and motivates constructive behavior
among management and staff.
A Checklist for a Clear Vision
Memorable?
Is the statement easy to remember or does it need a librarian?
Easily understood?
It the statement easy to understand or does it need a dictionary?
Inspiring?
Does the statement move people or does it sound boring?
Challenging?
g g
Does the statement seems challenging or is a goal which can be reached
in a year or two?
Customer-focused?
Does the statement focus on stakeholders or on just money?
Excellence-oriented?
Does the vision describe perfection or is it too modest?

A MISSION IS
What the Company/department

does,
For whom it does it,
How it does it, and
Why
Wh

Mission Statement
• Captures the essence of why the organization
exists – Who we are, what we do
• Explains the basic needs that you fulfill
p esses thee core
• Expresses co e values
v ues of
o thee organization
og o
• Should be brief and to the point
• Easy to understand
• If possible, try to convey the unique nature
of your organization and the role it plays that
differentiates it from others
How a company will achieve its Vision
A Mission Statement…In Brief
What business(es)
are you in? Whatt is
Wh i your
purpose?
What is your
philosophy?
p p y
Who do
Wh d you serve
and why?
Why your
organization exists What are your
t d ?
today? core values?
A Good Mission Statement…
…should answer SIX questions:
Who are you?
What needs do you fulfill? What problems do
yyou solve?
How do you recognize or anticipate these
needs or problems?
How should you respond to your key
customers and stakeholders?
What is your philosophy? What are your core
values?
What
h makesk you distinctive
d or unique??
A Checklist for a Clear Mission
Is it easily understood?
Is it linked to the vision?
Does it specify focus (Key Result)

Areas?
Does it mention the corporate values?
Does it tell employees where they need

to focus their efforts?

Examples…
Examples
…of Good & Not-so-Good

Vi i & Mission
Vision Mi i Statements
S
Today’s vision statement might be someone’s mission 10 years from now!

Examples – Good and Bad
Mission Statements
NASA Does a good
D d jjobb off expressing
i
To Explore the
Universe and the core values of the
Search for Life organization.
i ti Also Al conveys
and to Inspire the
Next Generation unique qualities about the
of Explorers
organization.
i ti
Walt Disney Too vague and unclear. Need
To Make more descriptive information
People about what makes the
Happy organization special.
Components of a Mission Statement
A ttypical
i l mission
i i statement
t t t contains
t i
three components:
¾The overall purpose of your business -
what are you trying to achieve
achieve, why are
you in business.
¾What
Wh your business
b i d
does - products
d
and services it provides.
¾What's important to your business - the
values your business lives by
by.
Some Famous Missions…
Pfizer Pharmaceutical's mission
statement: "We dedicate ourselves to
humanity's quest for longer, healthier,
happier lives through innovation in
pharmaceutical consumer and animal health
pharmaceutical,
products".
¾ Purpose: quest for longer, healthier, happier

lives
¾ Business: pharmaceutical, consumer and
animal health products
¾ Values: innovation
Some Famous Missions…
Dell Computers statement - "With With the power
of direct and Dell's team of talented people,
we are able to provide customers with superb
value;
l hi
high-quality,
h lit relevant
l t ttechnology;
h l
customized systems; superior service and
support; and products and services that are
easy to buy and use".
¾ Purpose: provide customers with superb value

technology
¾ B i
Business: hi h quality,
high lit relevant
l t ttechnology,
h l
customized systems
¾ Values: superior service and support
support, easy to
buy, easy to use
McDonald’s Corporation
Vision & Mission

McDonald’s
M D ld’ vision
i i is
i to dominate
d i the
h global
l b l foodservice
f d i
industry. Global dominance means setting the
performance standard for customer satisfaction while
increasing market share and profitability through our
convenience, value, and execution strategies.

The Body Shop
Vision & Mission

We aim to achieve commercial success by meeting
our customers’ needs through the provision of high
quality, good value products with exceptional service
and
d relevant
l t information
i f ti which
hi h enables
bl customers
t to
t
make informed and responsible choices.

Citicorp
Vision
To be a proactive partner with CITICORP / CITIBANK
to achieve the business objectives through the
cost effective, global exploitation of technology.
• To be a center of excellence through continuous learning.
•To be a caring partner.
•To be a catalyst for professional and personal growth.
Values
• Respect
R t for
f Individual
I di id l
• Customer Focus
• Nurture Merit
• Discipline
• Openness
• Thoroughness
p
• Continuous Improvement
• Team Work

HSBC Canada
Vision
Our vision is to achieve a superior long-term return for our shareholder,
shareholder we will
efficiently deliver high quality products and services, by highly motivated and well
qualified employees working together as a diverse team of employees focused on: faster,
smarter and friendlier.
Corporate Values
SERVICE - We are committed to providing Faster, Smarter, and Friendlier" service to
our customers.
INTEGRITY - We pride ourselves in being highly regarded by the community we serve,
as a result of the honest, moral, and ethical manner in which we operate.
TEAMWORK - We recognize and reward the benefits derived from working together as
a diverse team of employees focused on the achievement of common well-defined goals.
INNOVATION - We W encourage andd supportt creativity,
ti it initiative,
i iti ti andd a sense off urgency
in our employees.
CONTINUOUS IMPROVEMENT - We pride ourselves on our relentless pursuit of
improving
p g the qquality
y of everything
y g done in our organization.
g

The BSC: Achieving Performance Excellence Step
Case Study,
y, STAR MEDICAL CENTRE 3
(3) REVIEW OF VISION / MISSION
In your first week on the job you prepared the SMC Mission Statement,
which
hi h readsd as ffollows:
ll
“Our
Our Mission at SMC is to achieve commercial
success by providing the highest quality of
medical service to our customers. That
includes: quality service,
service accurate
appointment and invoicing systems,
convenience, value for money and efficient
service from a friendly
friendly, helpful
helpful, qualified and
satisfied staff”.
Does it make sense? ………………………………………………
Do you want to review? ………………………………………….
The BSC: Achieving Performance Excellence Step
Case Study,
y, STAR MEDICAL CENTRE 3
(3) REVIEW OF VISION
In your first week on the job you prepared the SMC Vision Statement,
which
hi h readsd as ffollows:
ll
Your first choice medical

partner
t

Module Three
Developing Performance
Measures and Control Systems
Goals, Objectives and Targets

Developing Goal Strategies
Key Performance Indicators & Units of Measure
Aligning KPI’s to Company Strategy
Obstacles to Measurement
Meirc Training & Consulting ST&P Mod 03 - 1
Organizzation
GETTING READY
ANALYSIS OF ENVIRONMENT SWOT
Strrategy Focused O
REVIEW OF VISION / MISSION
GOALS and OBJECTIVES
STRATEGIES/INITIATIVES/ACTION PLANS / BUDGETS
PERFORMANCE MEASURES (KPI’s)
CONTROL (KPI Targets Vs Actuals)

How Companies
p Should Operate
p
Board Level
HOW
Overall Goals
(1 to xxx) Subordinate Scorecard
Companies/Departments
Overall Vision HOW
Individual
Company/Dept
WHAT GoalsObjectives Team
Team/ Individual Scorecard
/ /Individual Scorecard
Team / IndividualScorecard
Team Individual
MEASURES &
TARGETS
INITIATIVES Goals
Overall
Overall Vision
WHAT Overall Vision
Vision
Team/Individual
Objectives
Objectives
Goals
MEASURESObjectives
&
MEASURES & INITIATIVES
TARGETS
TARGETS
TARGETS
INITIATIVES
Hence the need for GOALS

GOAL SETTING
¾ “A
A goal properly set is halfway
reached.”-Abraham Lincoln
¾ In the absence of clearly defined

goals,
l we become
b strangely
t l loyal
l l to t
pperformingg acts of trivia. Think about it!
WHY SET GOALS
In order to succeed, it is necessary to set
goals.
l
9 Define goal and outcome = Success
Without goals, focus and direction is lost!
Take control of life's (Yours & Co.) direction!
Provides a benchmark for determining
success.
“Setting goals is the first step in turning the
invisible into the visible.”- Anthony Robbins
5 Rules to Setting Goals
¾ Set goals that are important

¾ Set SMART goals/objectives
g j
¾ Set goals in writing
¾ Create an action plan
¾ Stick with it!
Mind Tools. Golden Rules of Goal Setting. Retrieved from http://www.mindtools.com/pages/article/newHTE_90.htm

5 Rules to Setting Goals
• A Goal That Does Not Help Your Company Achieve It’s
Set goals that
are important Mission is not Worth it.
Set SMART
• Differentiate between SMART Goals & Hallucinations
goals
Set goals in
• Goals that are not written down are just wishes
writing
• “If you really want something, you can figure out how to make it
Create an
action plan happen.”-Cher
Stick with it!

• If you mean it, prove it!

SMART Goals
How can setting SMART goals help a

person/company reach his/her/company goals?
It is like following a road map;

SMART Goals provide direction
SMART Goals allow us to focus on important things
SMART Goals help us keep the end result in mind
( l
(always think
thi k off th
the end
d results
lt andd stay
t focused)
f d)

Rule #5: Stick With It!
Remember,
R b goall setting
i is
i an ongoingi
activity not just a means to an end.
Build in reminders to keep on track and
remember to review goals continuously.
continuously
Use your planner!
This one step -- choosing a goal and sticking to it -- changes everything. Scott Reed

B i
Brainstorm Goals
G l
9 Write down 2 goals that best reflects

what a driver need to do in your
company.
9 For each goal write a brief description

of why it’s important.

I di id l Exercise
Individual E i Job Title: Driver
Goal h is
Why i this
hi Goall Important

A goal that is not written down
is just a wish
-- Some smart Person

GOAL SETTING
Very Nice
The question is: HOW?
Are we ready!

Remember The 5 Rules to Setting
Goals
¾ SET GOALS THAT ARE IMPORTANT
¾ Set SMART goals
¾ Set goals in writing
¾ Create an action plan
¾ Stick with it!
Now Let’s Decide on FOUR Goals That Are
Important For SMC & Define Why!
Let’s Brainstorm
SMC (possible) Goals
¾ Reduce Cost
¾ Improve Revenue
¾ Improve Customer Service (Who Are Your Customers)
¾ Improve Quality Service (Do Things Right)
¾ Motivated and Capable Team
¾ Improve ….
¾ .
¾ .
¾ .
¾ .
¾ .
Let’s Select FOUR Goals

((Groupp Exercise))

Know the difference
Goals:
Objectives:
KPI’s:
Targets:
Initiatives:

Goals & Objectives
j
A goal is an abstract statement
which is not fully measurable;
An objective is a statement of
specific,
ifi measurablebl steps towardd
attaining that goal;

GOAL OBJECTIVES
Improve health Lose weight
Reduce fixed
Increase profit
cost
Increase Market
Better Marketing
Share
Goals vs. Objectives
GOALS OBJECTIVES
Very short statement, Longer statement,
few words p
more descriptive
Broad in scope Narrow in scope
Directly relates to the Indirectly relates to the
Mission Statement Mission Statement
C
Covers llong time
i C
Covers short
h time
i
period (such as 5 period (such 1 or 2
years)) year budget
b d cycle)
l )
Objectives
Relevant - directly supports the goal
Compels the organization into action
Specific enough so we can quantify and
measure the
h results
l (S.M.A.R.T.)
(S M A R T )
Simple and easy to understand
Realistic and attainable
Conveys responsibility and ownership
Acceptable to those who must execute
May
M need d severall objectives
bj ti to
t meett a goall
S.M.A.R.T. Objectives
j
S === Specific
What exactly?
M === Measurable
How will you know you are making progress?
A === Attainable
Realistic?
R === Relevant
I it important
Is i t t to
t your company??
T === Time-bound
Wh ?
When?

Set SMART Goals/Objectives
Set Specific Goals/Objectives
Clear and well defined. Providing direction.
Make it as easy as you can to get where you want to go by defining precisely
where it is you want to end up.
Set Measurable Goals/Objectives
Include precise amounts, dates, etc to measure your degree of success.
H will
How ill you know
k when
h you are successful?
f l?
Set Attainable Goals/Objectives
Make sure that it's possible to achieve the goals you set.
If yyou set a goal
g that you
y have no hope p of achievingg you
y will only
y depress
p yyourself and
deflate your confidence.
“Don't let what you can't do interfere with what you can do.”-Anonymous
However, don’t set goals that are too easy.
Set Relevant Goals/Objectives
Goals should be relevant to the direction your company need to take.
Set Time-Bound Goals/Objectives
You goals must have a deadline so that you know when to celebrate your success.
Your sense of urgency increases and achievement will come that much quicker.

When Objectives
j Are… Performance Will
Tend to be..
Specific and Clear HIGHER
Vague LOWER
g g
Difficult and Challenging HIGHER
Easy and Boring LOWER
Set Anticipatively HIGHER
Set by Management LOWER
Accepted by Employees HIGHER
Rejected by Employees LOWER
Accompanied by Rewards HIGHER
Unrelated to Rewards LOWER
Practicing SMART Objectives
Work as a team with one of your colleagues to

define two objectives for one of the driver’s goals
p earlier
developed
Follow the SMART method of setting

goals/Objectives

Set S.M.A.R.T. Objectives
Objective ONE:…………………………………………
S === Specific
What exactly?
……………………………………………………………………………………………..........................
…………………………………………………………………………………………………...................
M === Measurable
How will you know you are making progress? …………………………………………..................
……………………………………………………………………………………………………………….
A === Attainable
Realistic? ……………………………………………………………………………………...................
…………………………………………………………………………………………………...................
R === Relevant
IIs it important
i t t to
t your company?? ………………………………………………………......................
……………………………………………………………………………………………………………….
T === Time-bound
When?……………………………………………………………………………………………………....
When?
……………………………………………………………………………………………………………….

Set S.M.A.R.T. Objectives
Objective TWO:…………………………………………
S === Specific
What exactly?
……………………………………………………………………………………………..........................
…………………………………………………………………………………………………...................
M === Measurable
How will you know you are making progress? …………………………………………..................
……………………………………………………………………………………………………………….
A === Attainable
Realistic? ……………………………………………………………………………………...................
…………………………………………………………………………………………………...................
R === Relevant
IIs it important
i t t to
t your company?? ………………………………………………………......................
……………………………………………………………………………………………………………….
T === Time-bound
When?……………………………………………………………………………………………………....
When?
……………………………………………………………………………………………………………….

SMC
Obj i
Objectives
Goals
For each
O2 O1 CORPORATE
Goal selected
O3 earlier,
li
identify 3
objectives
bj ti
Goals
Developing Performance
Measures & Control Systems
Goals, Objectives and Targets.

K P
Key Performance
f Indicators
I di t (KPI’s)
(KPI’ )
"The truth of the matter is that you always know the right thing to do. The hard
part is doing it." - General H. Norman Schwarzkopf
GETTING READY
GOALS/TARGETS
STRATEGIES/ACTION PLANS / BUDGETS
CONTROL (KPI Results Vs Actuals)

SMC
Obj i
Objectives
Goals
H
How to T
Trackk
Any ideas?
An
Need Confirmation, Hence KPI
KPI’ss
(Key Performance Indicators
to measure)
Performance Measurement
F t
Future motto
tt is:
i
READY AIM FIRE
READY…AIM…FIRE
(how will you know the results: KPI

KPI’ss
and Targets )

The Right Measurement System
A measurement system will actively

promote performance improvement by;
measuring what matters most,
Provide corrective feedback and

positive reinforcement to enthusiastic
people who enjoy being measured and
take improvement on as a challenge.
32
ATTRIBUTES OF A GOOD
MEASUREMENT SYSTEM
Focus on OBJECTIVES, “that
support the Key Result Areas”
Areas
Good measurement systems don’t
just measure things done according to
tthee organizational
o ga at o a chart.
c a t. Good
systems measure things done to
satisfy
ti f Strategic
St t i Goals.
G l
Key Performance Indicators “KPI’s”
This is the essence of measurement. Let’s make sure the
concept of Key Performance Indicator is understood.
An “INDICATOR” is a gauge or a measure

th t reports
that t information.
i f ti
“PERFORMANCE” is the result or activity
we are looking for that fits in to strategic
goals.
“KEY”
KEY means that this measure has been
pinpointed so carefully to reflect how we are
doing in regard to the corresponding
objective.
bj ti
Few Definitions>>>>>>>>>
A KEY PERFORMANCE INDICATOR (KPI) IS
A QUANTITATIVE MEASUREMENT
(Number, Percentage, Index, Score, Cost, etc)
USED TO TRACK PERFORMANCE.
Example: Number of Customer Complaints

Per Week

A BENCHMARK IS THE COMPARATIVE
STANDARD OR TARGET AGAINST WHICH
THE ACTUAL KPI VALUE IS COMPARED
Example: Customer Complaints to be no

more than
th 1%

A MEASUREMENT TOOL IS ONE USED TO
MEASURE THE KPI
Example: A Customer Complaint Log

Strategic Goals & KPIs
Every Strategic Goal should be measured using at

least 1 KPI.
It is not uncommon to have a Strategic Goal
measured using 3-5 KPIs.
In such cases
cases, the Strategic Goal measurement is
referred to as a “tight control”.
Examples are on the slides that follow:

Goals, Objectives & KPI’s
Goal Objective KPI How to
Measure
Improve Profit Cost Reduction Cost per Total expenses / #
employee
p y pper yyear of staff
Improve Profit Cost Reduction Cost per item Total expenses / #

/Productivity produced of units produced
Improve Profit Revenue per

Employee
Improve Profit Sales Growth

Measure
Better Customer Customer % of Satisfaction Ask the
Service Satisfaction Customers
(Survey)
Better Customer Unresolved Issues # of unresolved Keep a log
Service issues
Better Customer Out-of-stock

Service percentage
Better Customer Increase

Service

Measure
Better Quality Process Time Days to complete Keep a log
Service a process or
activity
Better Quality Process Cost Cost ($’s) to Ask finance
Service complete a
product
Better Quality Product Quality
Service
Better Quality Automation

Service

Measure
Satisfied & Qualified Staff Training Days per HR Records
Productive Staff Employee per
Year
Satisfied & Satisfied Staff % Satisfied Survey (ask them)
Productive Staff
Satisfied & Continuous

Productive Staff Improvements
p
Satisfied & Staff Retention

Productive Staff

Objective KPI
Satisfied Staff
Healthy Staff
Safe Environment
Innovation
Profit
Efficiency
Customer Service

So Why KPI’s;
“What Gets Measured

G t Done,
Gets D andd
What Gets
Recognized, Gets
Done Best.”

A KNOWN FACT;
“The Moment That

Managers Start Measuring
Performance, It Will
I
Improve. A
As SSoon A
As
Performance Is Reported,
It Improves Further.”

Key Performance Indicators (KPIs)
Are measures (q(quantitative or qqualitative)) that enable the assessment

of performance – especially in Key Result Areas (Strategic Goals)
– in tangible terms.
To be effective in improving business performance, they must be

linked to a strategic plan which details how the business intends to
accomplish
li h its
it vision
i i andd mission.
i i
The metrics selected must address all aspects

p of pperformance results,,
describe the targeted performance in measurable terms and be
deployed to the organisational level that has the authority, resources
and
d knowledge
ow edge too takee thee necessary
ecess y action.
c o .

K.P.I’s WILL ASSIST MANAGEMENT IN
ANSWERING THE FOLLOWING QUESTIONS:
KPI’s? What happened?

What
For? Why it happened this way?
Iss it going
go g too continue
co ue likee this?
s?
management
What is our action plan?
The Performance Indicators (KPI’s)
Sh ld B
Should Be:
Address Performance of All Areas

Support Strategic Goals
S.M.A.R.T.
Not Difficult to Measure
Customers off KPI’s Should Have
Authority to Take Action.

SOMETHING TO REMEMBER;
“Not All Things Are Worth

Measuringg All the
Time…You Have to
Determine What You
Want to Measure and
Measure It Properly.”
Properly ”

Wrong Measures Hide Problems
Poor
Plans
Wrong
controls
No Unskilled Wrong
accountability Staff technology

On Data Collection;
“Collecting data is much

like collecting
garbage,….., You must
know in advance what
you are going to do
with it”

A KPI IS NOT USEFUL:
¾When the information it provides to you is
not critical to y
your unit’s success
¾When it does not drive the behavior you
want
¾When the cost of collecting the data
exceeds the benefits
¾When the KPI cannot be directly affected
by the group being measured
¾When it is not a KPI at all.
The Right KPI
KPI’s:
s:
¾ Monitor Progress Toward Critical
Goals
¾ Motivate
i Appropriate
A i Behavior
h i
¾ Communicate Information (Are
Understandable !!)
¾ Identify Opportunities for
Improvement.
Right
g KPI’s Expose
p Problems
After corrections
Poor
Plans
Wrong
controls
No Unskilled Wrong
accountability Staff technology

Objective KPI
Satisfied Staff
Healthy Staff
Safe Environment
Innovation
Profit
Efficiency
Customer Service

Goals and KPI’s---Discussion Questions
"The truth of the matter is that you always know the right thing to do. The hard
part is doing it." - General H. Norman Schwarzkopf

Objectives and KPI’s?
WHEN Objective is: KPI is:
1 Excellent workplace
p climate The Let’s Hear It! Staff Surveyy
Skilled, knowledgeable, learning-oriented Percent of employees fulfilling their Individual

2
staff Learning Plans
3 g environment
Safe and healthful working An Approved
pp HSE Performance Ranking
g
4 Healthy staff Illness & Injury Rate
5 Satisfied customers Customer survey
6 Improve Technology I.T. Budget or Processes Automated
YTD Actual Expenditures minus Budgeted

p
Expenditures [[for a centrally-funded
y unit]]
7 S
Sound
d fifinancial
i l performance
f
YTD Revenue minus Expenditures [for a re-charge
unit]
8 High productivity KPI’s vary with units & processes
9 High efficiency & effectiveness KPI’s vary with units & processes

PERFORMANCE CATEGORIES
Productivity Safety
Financial P
People
l
Customer
Sales Quality Miscellaneous
Service

General Electric - 50 Years Ago
¾ A 1951 GE task force identified the following
key corporate performance measures:
9 Profitability
9 Market share
9 Productivity
9 Employee attitudes
9 Public responsibility
9 The balance between long-term
g and short-term
goals.

OBSTACLES TO MEASUREMENT
What are they? Group Exercise


¾ No Trust
¾ Middle Manager “Obstacle”
¾ Entrenched
E t h d Measurement
M t Systems
S t
¾ Poor Employee
p y Understandingg &
Acceptance
¾ Lack
L k off Management
M Support,
S
Commitment and Involvement.
PERFORMANCE MANAGEMENT:
SUMMARY
Concrete initiatives that implement strategy
Performance
Strategy Measurement
Execution
Execution at all levels consistent with strategy

A Famous Quote:
“without a yardstick,
there is no
measurement;
without measurement
there is no control”
(anonymous)

Summary of Company KPI’s
KPI Descriptions Plan Actual
Return on Investment
S
Suggestions
ti per employee
l
Awards Won
New Clients
New Suppliers
Despite
p repeated
p assurances from management
g that everything
y g was under control,, it is
now clear that nothing was under control. Maurice Greenberg, An AIG shareholder who lost
more than US$ 1 billion in less than 12 months. Source: Gulf News, Oct 4th, 2008
The Dubai Government's latest intervention in
restructuring
t t i DubaiD b i World
W ld will
ill ensure "long
"l
term commercial success" of Dubai World.
Susanne Peter, Vice President Finance, IBM,

said, "It is essential to integrate with business
functions, not the finance-only perspective.
This requires strong executive support, clear
g and measurable objectives.
targets j It's not
easy."
S
Source: h // lf
http://gulfnews.com/business/economy/dubai-world-intervention-carefully-planned-1.533230
/b i / /d b i ld i i f ll l d 1 33230 Nov
N 28
28, 2009

SMC
KPI’
KPI’s
Objectives
For each OBJECTIVE selected earlier,

id tif a corresponding
identify di KPI

GETTING READY
GOALS/TARGETS
STRATEGIES/ACTION PLANS / BUDGETS
CONTROL (KPI Results Vs Actuals)

Effective Goals/Objectives Include
Goal/Objective Strategies
¾ A Goal Is Ineffective Without a Clear

Pl ffor A
Plan Achieving
hi i It
¾ Identify
y the Steps
p to Reachingg Your
Goal
¾ Identify Strategies for How to Overcome
Potential Obstacles

How Thoughts
g Become Things
g
Thoughts
Vision
Goals
Plans
A i
Actions
Results
HOW? HOW? ¾Who?
¾When?
¾Cost/budget?
¾Standard?
VISION/
STRATEGY
ACTION
PLANS

HOW? HOW? HOW? HOW? HOW?
IMPROVE EXPLORE
QUALITY OF NEW MARKETS When?
PRODUCTS
OBJECTIVE / INCENTIVES By Whom?
DISTRIBUTION FOR
STRATEGY Cost / Budget?
BETTER
OVER-TIME How Well (KPI)?
MARKETING
NEW
PRODUCTS
INCREASE
PROMOTIONAL RECRUIT ACTION PLANS
ACTIVITIES CUSTOMER
INCREASE SERVICE
X NUMBER &
SALES & Y TYPE BUDGET
BY 20 % INCREASE
PRICE SALES FORCE
TRAINING EMPLOY ACTION PLANS

IMPROVE
&
SALES PART - TIMERS
EFFORTS BUDGET
SCHEDULING
FACTOR X AFTER SALE

SERVICE OTHER
CREATIVE
IDEAS

CRITERIA FOR ACTION PLANS
DETAILED & COMPLETE
STEPS, BY AREA, CUSTOMER
HOW? TIMING (MILESTONES)

ASSIGNED RESPONSIBILITY
RESOURCES NEEDED
PERFORMANCE MEASURES
FROM VISION TO ACTION
Use the How-How Technique to develop your action plan for
two of the strategic goals identified earlier for SMC.

Know the difference
Goals: Done
Objectives:
j Done
KPI’s: Done
Targets: Will discuss later
Initiatives: Will discuss later in more
details

Star Medical Centre (SMC)
Goals, Objectives & Targets
Group Exercise

Individual Exercise: SMC Detailed Strategy
Unit of
Goal 1 OBJECTIVE KPI
Measure
W y Thiss Goa
Why Goal iss Important:…………………………………………………………….
po ta t:…………………………………………………………….
………………………………………………………………………………………………

Unit of
Measure
W y Thiss Goa
po ta t:…………………………………………………………….
………………………………………………………………………………………………

Unit of
Measure
W y Thiss Goa
po ta t:…………………………………………………………….
………………………………………………………………………………………………

Unit of
Measure
W y Thiss Goa
po ta t:…………………………………………………………….
………………………………………………………………………………………………

Module Four
Using The Balanced
Scorecard as a Strategic
Management System
Translating Vision to Strategy

Meirc Training & Consulting BSC -Mod 04 - 1
Strategic Planning & Strategy Execution
"82% of Fortune 500 CEO's surveyed
indicated that they feel their
organization did an effective job of
strategic planning. Only 14% of the
same CEO's indicated that their
organization did an effective job of
implementing the strategy.
strategy "
- Forbes Magazine
Vision without Implementation is Hallucination!
IMPLEMENTING STRATEGIC GOALS
97% 80% 52% 33%
Clear Some Significant

VISION Strategic Strategic Strategic
Plans Success Success
Almost All Organizations Have a Strategic

Vision
Vision,…… Few However Manage to Realize It
Source: Strategic Performance Measurement & Management, Bus. Intelligence, Renaissance Worldwide 1997

Why Do Strategies Fail To Realise?
What are the main reasons that stop many
strategies from becoming a reality?
¾.
¾.
¾.
¾.
¾.
¾.
VISION WITHOUT IMPLEMENTATION…

…IS HALLUCINATION!
Why Do Strategies Fail To Realise?
VISION WITHOUT IMPLEMENTATION…

…IS HALLUCINATION!
Why do company strategies fail to
realise?
85% of units use less than an hour per
month for discussions about strategies
70% of In 60% of
managers do Nine organisations out of organisations,
not have an ten fail in implementing budgets are not
incentive linked their strategies linked with
t the
to th strategy
t t strategies
t t i
Only 5% of employees understand the
strategy
t t (ie
(i 95% do d not!)
t!)
( Source: 2006 Balanced Scorecard Collaborative, a Palladium company . bscol.com)

Mission Statements Are Ends,
N M
Not Means
In many organizations
organizations, there is usually
a huge gap between elegantly worded
“mission
mission statements
statements” and day
day-to-day
to day actions
Companies mission
statements. Some
are simple and hollow Employees actions
ALIGNMENT IS A MUST
Strategic Planning
&
Th B
The Balanced
l d S
Scorecard
d
There are three types of companies
¾Those Who Plan And Make Things

Happen
¾Those
Th Who
Wh Watch
W t h Things
Thi Happen
H
¾Those Who Wonder What Is Happening

Strategic-Focused Organizations (SFO)
¾Principles of a Strategy-Focused
Organization
9Translate the Strategy to Operational Terms
9Align
g the Organization
g to the Strategy
gy
9Make Strategy Everyone’s Everyday Job
9Make Strategy
gy a Continual Process
9Mobilize Change Through Executive
Leadership
¾The Balanced Scorecard

Balanced Scorecard
“B k
“Background
d andd Underlying
U d l i Philosophy”
Phil h ”
What Is It?
A Strategic and Performance Measurement Tool.
Oi i ?
Origins?
Introduced in Early 1990’s by R. Kaplan & D. Norton
i a Series
in S i off Articles
A i l ini Harvard
H d Business
B i Review.
R i
Underlying Philosophy?
¾Clear Communication of Goals & Priorities Across
the Whole Organization
¾Learning and Team-Working Emphasis.
THE BALANCED SCORECARD
¾The Balanced
¾Th B l d Scorecard
S d puts the
h
important stuff on the table ………..
And keeps it there.
¾And the important stuff is:
– Where are we heading?
• Our critical goals
– What will help us to get there?
• The initiatives or factors that drive our
performance.
– How do we know if we
we’re
re getting there?
• Tracking devices {KPI’s}
Balanced Scorecard History
Measurement Enterprise-wide
Enterprise wide
Alignment and
and Strategic
Communication
Reporting Management
1992 1996 2000
Articles in Harvard Business Review: Acceptance and Acclaim:

“The
The Balanced Scorecard — “The
The Balanced
Measures that Drive Performance” Scorecard” is translated
January - February 1992 into 18 languages
“Putting the Balanced Scorecard to Selected by Harvard
Work” September - October 1993
Work Business Review as
one of the “most
“Using the Balanced Scorecard as
important
a Strategic Management System”
management practices
January - February 1996
of the past 75 years.“
1996 2000

Kaplan & Norton Definition of a B.S.C.
BSC
“The Balanced Scorecard Retains Traditional Financial
Measures But Financial Measures Tell the Story
Measures.
of Past Events, an Adequate Story for Industrial
Age
g Companies
p for
f Which Investment in Long-term
g
Capabilities and Customer Relationships Were Not
Critical for Success. These Financial Measures
Alone Are Inadequate. Companies Need More
Measures for Guiding and Evaluating the Journey
That Information Age Companies Must Make to
Create Future Value Through Investment in
Customers, Suppliers, Employees, Processes,
Technology, and Innovation.”
Wh is
What i the
h Balanced
B l d
Scorecard?
Translatingg Vision to Strategy
gy
The
h Balanced
l d Scorecardd process
g
allows an organization to align
g and
focus all its resources on its
strategy.
Translating
T l ti
Vision to Strategy
The Balanced
Scorecard links vision
and strategy to our
everyday actions.
Balanced Scorecard Hall of Fame for Executing
Strategy: Achieving Breakthrough Results

The Premise Behind the Balanced Scorecard Is that
Measurement Motivates Behavior
The Premise
Measurement Communicates
Values, Priorities And Direction
The Conclusion
Measurement Must Be Linked To Strategy
Strategy Balanced
B l d
Scorecard
Measurement To Communicate, Not To Control

TRANSLATING THE VISION
Means Clarifying The Vision
With Meaningful Terms
Define a Mission Statement
How? As a Set of Strategic Objectives.
Four Perspectives
p Need to Be
Defined.
Gain Consensus Among

All Executives
TRANSLATING THE VISION
“Many leaders have personal visions

that never get translated into shared
visions that galvanize an organization.
Wh t has
What h been
b lacking
l ki is i the
th
discipline for translating individual
vision into shared vision.”
Peter Senge

The Balanced Scorecard Suggests That We
View
i the
h Organization
i i From FOUR
PERSPECTIVES, and to Develop
Metrics, Collect Data and Analyze It
Relative to Each of These Perspectives:
1) The Learning and Growth Perspective
2) The Business – Internal Process
Perspective
p
3) The Customer Perspective
4) The
Th Financial
Fi i l Perspective
P ti
The Balanced Scorecard Suggests That We View the Organization From Four Perspectives
1. The Financial Perspective
Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate financial data will
always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough
handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of
the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the
"unbalanced"
unbalanced situation with regard to other perspectives.
2. The Customer Perspective

Recent management philosophy has shown an increasing realization of the importance of customer focus and
customer satisfaction in any business.
business These are leading indicators: if customers are not satisfied,
satisfied they will eventually
find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of
future decline, even though the current financial picture may look good.
3 The Business Process Perspective

3.
This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know
how well their business is running, and whether its products and services conform to customer requirements (the
mission). These metrics have to be carefully designed by those who know these processes most intimately; these are
not something that can be developed by outside consultants.
4. The Learning and Growth Perspective

This perspective includes employee training and corporate cultural attitudes related to both individual and corporate
self-improvement.
se p ove e t. In a knowledge-worker
ow edge wo e organization,
o ga at o , people -- tthee only
o y repository
epos to y of
o knowledge
ow edge -- aaree the
t e main
a
resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be
in a continuous learning mode.

Principles of the Strategy Focused
Organization:
The Strategy / Vision
Measurement Is the
Language That Gives Financial Perspective
Clarity to Vague "If we succeed, how will
Results we look to our
Concepts
Concepts. shareholders?”
shareholders?
Customer Perspective
"To achieve my vision,
Measurement Is Used how must I look to my
customers?”
to Communicate, Not to
Control. Internal Perspective
"To satisfy my customers,
at which p
processes must I
excel?”
Strategy Can Be
Organization Learning
Described As a Series
"To achieve my vision,
of Cause and Effect how must my
organization learn and
Relationships Actions improve?”

STRATEGIC ALIGNMENT & GOAL SETTING
VISION
STRATEGY
OU
FINANCIAL PERSPECTIVE
UTCOM
Profitability, growth, value
CUSTOMER PERSPECTIVE
MES AC
Perceptions of: -price, -service quality
INTERNAL PERSPECTIVE
CTIVITIIES
Cycle time, productivity, processes
LEARNING & GROWTH PERSPECTIVE

Knowledge / product development
FINANCIAL PERSPECTIVE
P fi bili growth,
Profitability, h value
l
EXAMPLES REVENUE GROWTH

PLEASE!! and MIX
OU
UTCOM
COST REDUCTION / PRODUCTIVITY
IMPROVEMENT / PROFIT
MES
ASSET UTILIZATION OR
INVESTMENT STRATEGY

CUSTOMER PERSPECTIVE
P
Perceptions
i of:
f -price,
i -service
i quality
li
EXAMPLES MARKET SHARE

PLEASE!!
OU
UTCOM
CUSTOMER RETENTION
MES
CUSTOMER SATISFACTION
CUSTOMER PROFITABILITY

INTERNAL PERSPECTIVE
Cycle time, productivity, processes
EXAMPLES TIME
ACTIIVITIES
PLEASE!!
QUALITY
S
COST

LEARNING & GROWTH PERSPECTIVE
Knowledge / product development
EMPLOYEE CAPABILITIES
EXAMPLES
PLEASE!!
AC
INFORMATION SYSTEMS
CTIVITIES
CAPABILITIES
MOTIVATION and
EMPOWERMENT
INNOVATION

THE VISION: “As our customer’s preferred provider, we
shall be the industry
y leader. This is our mission”
THE STRATEGY *Services That Surpass Needs, * Customer

Satisfaction * Continuous Improvement
Satisfaction, Improvement, * Quality of Employees
Employees,
* Shareholders Expectations
Financial Customer Growth

Internal Business
t
9Return
9R on C Capital
it l 9Value for money 9Shape customer 9Continuous
9Cash flow 9Competitive price requirements Improvement
9Project profitability 9Hassle-free relation 9Tender effectiveness
9Reliabilityy of g performance
9High p Quality service
9Quality 9Innovation
performance professionals 9Safety/loss control
9Innovation 9Superior project 9Empowered staff
management force
ROCKWATER’S BALANCED SCORECARD

Each Strategic
g Objective
j Generates
One or More Scorecard Measures
Strategic Objective:
EXAMPLES ¾.
Scorecard Measures:
¾.
¾.
¾.
¾.
The Balanced Scorecard and
Measurement-Based Management
The Balanced Scorecard Methodology
Builds on Some Keyy Concepts
p off
Previous Management Ideas Such As
TQM, Including Customer Defined
Quality, Continuous Improvement,
Employee Empowerment,
Empowerment and of
Course Measurement Based
Management and Feedback.
BALANCED SCORECARD
REQUIREMENTS:
FINANCIAL:
9Objectives
j
9Measures
9Targets
9Initiatives
CUSTOMER: INT. BUS. PR:
9Objectives 9Objectives
VISION
9Measures 9Measures
and
9Targets 9Targets
STRATEGY
9Initiatives 9Initiatives
LEARN & GR:

GR
9Objectives
9Measures
9
9Targets
9Initiatives
Balanced Scorecard
FINANCIAL
“To succeed Objectives Measures Targets Initiatives
financially, how
should we
appear to our
shareholders?”
CUSTOMER INTERNAL BUSINESS PROCESSES

“To achieve our Objectives Measures Targets Initiatives “To satisfy our Objectives Measures Targets Initiatives
vision, how Vision shareholders
should we & and customers,
appear to our Strategy what
h t business
b i
customers?” processes must
we excel at?”
INNOVATION AND LEARNING

“To achieve our Objectives Measures Targets Initiatives
vision, how will
we sustain our
ability to
change and
improve?”

Balanced Scorecard Planning Process
What are the steps wee will
ill
Vision /
Mission be taking to achieve
Objectives
our vision of
Objectives
Objectives
Objectives
j the future?
Measures
What Measures
Measures
Measures
will progress Targets
Targets
towards our vision Targets
Targets
Initiatives
off the
th future
f t look
l k like?
lik ?
INFORMATION IN THE B. S.
Information Type Are …….. An Example is…..
Strategies High-Level
High Level Goals Increase Market Share
Objectives/Goals Measurable Plans of Improve Customer

A i
Action S if i
Satisfaction
Measures Indicators of Success or Average Customer

Failure for an objective
j Rating
g (1
( to 9))
Targets Desired level of Achieve x out of 10.

performance for a Average customer
measure satisfaction
Initiatives management actions Train customer service
taken to achieve
achie e target Reps in Problem
Resolution Skills
Balanced Scorecard Objectives
j Examples
p
FINANCIAL CUSTOMER INTERNAL LEARNING
RONA SATISFY COST PER TRAINING

ITEM HRS
SALES NEW QUALITY TURNOVER
PRODUCTS
EXPENSES KEY A/C DELIVERY STAFF
SATISF’N

INNOVATION & LEARNING
PERSPECTIVE
OBJECTIVE MEASURES TARGET
Develop highest Percent budget Increase

quality staff spent on training
Motivate quality Staff satisfaction Increase
staff index

XYZ ORGANIZATION BALANCED
SCORECARD
LEARNING & GROWTH PERSPECTIVE INT BUSINESS PROCESS PERSPECTIVE
INT.
CRITICAL GOAL KPI/METRIC CRITICAL GOAL KPI/METRIC
Excellent workplace climate Let’s Hear It! survey
.
Skilled, knowledgeable, Percent of staff fulfilling their
learning-oriented staff Individual Learning Plans .
Safe and healthful working HSE Performance Ranking
environment
.
Healthy staff Injury / Illness Rate .
CUSTOMER PERSPECTIVE FINANCIAL PERSPECTIVE

CRITICAL GOAL KPI/METRIC CRITICAL GOAL KPI/METRIC
. .
. .
. .
. .

K.P.I’s WILL ASSIST IN ANSWERING
THE FOLLOWING
O OW NG QUESTIONS:
QU S ONS:
What happened?
KPI s?
KPI’s?
What
For? Why it happened this way?
Iss it going
go g too continue
co ue likee this?
s?
management
What is our action plan?
Wrong
g Measures Hide Problems
Poor
Plans
Wrong
controls
No Wrong Wrong
accountability suppliers technology

Right
g KPI’s Expose
p Problems
After corrections
Poor
Plans
Wrong
controls
No Wrong Wrong
accountability suppliers technology

The financial perspective relates to
current financial performance
The non-financial perspectives are the
drivers of future financial performance
The learning perspective is the driver

of improved process performance
Improved process performance is the
driver of improved customer service
Improved customer performance is the
driver of financial success
Causal Links
FINANCIAL
“To succeed
Objectives Measures Targets Initiatives
financially, how
should we
appear to our
shareholders?”

appear
pp to our Strategy what business
we excel at?”

“To achieve our
vision, how will
we sustain our
ability to
change and
improve?”

Causal Links
FINANCIAL
financially, how
should we
appear to our
shareholders?”
1st for
shareholders
vision, how
should we 1 forstVision
&
shareholders
and customers,
h t business
b i
customers?”
customers processes must
we excel at?”
INTERNAL BUSINESS PROCESSES

vision, how will
we sustain our
ability to
1st for
change and
improve?” employees
WHAT IS OUR VISION
OF THE FUTURE
If Our Vision To our To our With Internal Our Abilityy to

Succeeds, Stakeholders Customers Management Improve & Grow
What Financial Customer Internal Business Innovation
Will Success
Mean? perspective perspective perspective and Learning
What
Are The
Critical
Success
Factors?
What
Are
The
Critical
Measurements?
THE BALANCED SCORECARD
CONTRACTUAL AGREEMENT BETWEEN
MANAGEMENT TEAMS
Board Level Scorecard
HOW
Overall Vision
SubordinateScorecard
Subordinate Scorecard
Objectives Overall Vision

Overall Vision HOW
MEASURES &
INITIATIVES
TARGETS
WHAT
Objectives
Objectives Team / Individual Scorecard
Team / /Individual Scorecard
Team / IndividualScorecard
Team Individual
MEASURES &
MEASURES &
TARGETS
INITIATIVES
INITIATIVES Scorecard
TARGETS
Overall
OOverallVision
Overall Vision
WHAT OverallVision
Vision
Objectives
Objectives
Objectives
MEASURES & Objectives
TARGETS
TARGETS
TARGETS
TARGETS
INITIATIVES

The Need to Align Personal Objectives
Align Personal Objectives: all employees need
to learn how they fit into the overall game plan
Corporate
Division
Business Unit
Department
Associate
Align Incentives & Compensation: link reward

systems
y to achievement of individual and
organizational objectives
A Leading Performance Measurement Approach Links
the Boardroom With Individual / Team Activities
Performance
e o a ce Measurement
easu e e t Cascade
One
Scorecard
at CSF’s Measures Targets Major
ading
Business Initiatives
Unit Level
wn / Casca
Multiple
Functional /
Process Objectives Measures Targets Initiatives
Drill Dow
Responsibility
Matrices
Numerous
I di id l /
Individual Activities
Team Goals Measures Targets
Responsibility
Matrices

Introducing Strategy Maps
Cause-and-Effect
Cause and Effect Relationships
Financia ROCE
l
Customer Loyalty
Custome
C
r On-time Delivery
Internal/Bus.
Process
Process Quality Process Cycle Time
Learning &
Growth
Employee skills
Software can help: Example: http://www.strategymap.com

Sample Strategy Map: Consumer Bank
Financcial “Our success comes from…
F2 - Maximize F3 - Grow non- F1 - Achieve sustainable double-
double F4 - Manage financial
traditional revenue traditional digit net income growth resources for maximum
sources revenue sources risk-adjusted return
…enduring value-added relationships…

mer
Custom
C1 - “Understand me and C2 - “Give me C3 - “Appreciate me, and

C4 - “Be involved
give me the right convenient access to get things done easily,
in my communities.”
information and advice.” the right products.” quickly, and right.”
…which is all about great products and personal service…

Innovation Customer Partnerships
p Operational Excellence
Communicate the full value Consistently deliver the full Provide premium service to
proposition value proposition delight and retain valuable
Internal Process
customers
Migrate customers to the right
channel
Broaden offering through Maximize efficiency and quality
internal & external partnerships of business processes
Identify and recognize high-
potential relationships
Develop attractive new products Segment markets and target Focus on the critical few
& services
i prospects activities
…delivered by a motivated & prepared work force.”

Learrning and
Growth
L1 - “We develop, L2 - “I’m developing L3 - “We understand L4 - “We have the

g
recognize,, retain,, and the skills I need to gy and know
the strategy information and tools we
G
hire great people.” succeed.” what we need to do.” need to do our jobs.”

The Balanced Scorecard for Consumer Bank Consumer
Bank
Perspective Strategic Objectives Strategic Measures Targets
F1 Increase earnings per share • Net income (vs. plan) +$100M

F2 Add and retain high value customers • Revenue mix (by target segment) 30%(A) 70%(B)
Financial Perspective F3 Increase revenue per customer • Revenue per customer $300
F4 Reduce cost per customer • Cost per customer $75
• Customer satisfaction (survey) 90%

C1 Become a trusted financial advisor
Customer Perspective • Share of wallet 50%
C2 Provide superior service
• Target customer retention 90%
I1 Understand customer segments • Share of segment 30%

Customer Management I2 Shift to appropriate channel • Channel mix change 40%
I3 Cross-sell the product line • Cross-sell ratio 2.5
Perspective
Internal
Product Innovation I4 Develop new products • Revenue from new products (%) 50%
I5 Minimize problems • Service error rate 0%

0.%
Operations Management I6 Provide rapid response • Request fulfillment time < 24hrs
Responsible Citizen I7 Build diversity reflecting community • Diversity mix versus community 1.0
Human Capital L1 Insure readiness of strategic jobs • Strategic job readiness 100%
wth
arning & Grow
Perspective
Information Capital L2 Insure availability of strategic info • Information portfolio readiness 100%
• Customer survey 100%

L3 Create a customer-focused culture
• 360° Survey (leadership model) 70%
L4 Build cadre of leaders
Organization Capital • Strategic awareness survey 90%
L5 Align the organization
• Personal ggoals aligned
g to BSC ((%)) 100%
Lea
L6 Best practice sharing

• KMS utilization/currency 100%

- A map is handy to communicate
(=Strategy map)
- How you plan to get there ((=Strategy)
Strategy)
- From where you are coming (=Mission)
- To
T where
h you want to b be (=Vision)

Basic Scorecard Terminology
Strategy Map (Southwest Airlines Example)
Strategic Theme: OBJECTIVES: MEASURES: TARGETS: INITIATIVES:
Operating Efficiency What the How success The level of Key action
Profits and strategy is or failure performance programs
Financial RONA trying to (performance) or rate of required to
G
Grow achieve against improvement achieve
Fewer planes
Revenues objectives is needed targets
Customer
Attract & monitored
Retain More
Customers
On-time Lowest
Service prices
Internal Objectives Measures Targets Initiatives

Fast ground • Fast ground • On Ground Time • 30 Minutes • Cycle time
turnaround
turnaround • On-Time • 90% optimization
Departure
Learning
Ground crew
alignment

A COMPLETE SCORECARD IS A
Strategy Map
PROGRAM FOR ACTION
Strategic Theme:
Objectives
j Measures Targets
g Initiatives
Operating E
Excellency
cellenc
Profits and
Financial RONA • Profitability • 30% CAGR
Grow
Fewer planes
• Grow Revenues • 20% CAGR
Revenues
• Fewer
F planes
l • 5% CAGR
Attract &
Customer Retain More • More Customers • # Customers • 12% growth •Customer
Customers • Flight is on -time • FAA On Time • Ranked #1 loyalty
• Lowest prices Arrival Rating • Ranked #1 program
On-time Lowest
Service prices • Market
M k t Survey
S • Quality
Q alit
management
Internal • Fast ground • On Ground Time • 30 Minutes • Cycle time
Fast ground turnaround • On-Time • 90% optimization
turnaround Departure
Learning • Ground crew • % Ground crew • yr. 1 70% • Ground crew

alignment trained yr. 3 90% training
Ground crew yr. 5 100%
alignment • % Ground crew
stockholders

Royal
y Canadian Mounted Police
V Division – Iqaluit
(B ffi Island)
(Baffin I l d)

SMC STRATEGY MAP
FINANCIAL
CUSTOMER
INTERNAL
LEARNING

SMC'S SUGGESTED STRATEGY MAP
FINANCIAL
CUSTOMER
INTERNAL
LEARNING

The Importance of Initiatives
FINANCIAL
“To succeed
financially, how
should we
appear to our
shareholders?” ?
? ?
appear
pp to our Strategy what business
we excel at?”
"As the UAE strives to be a

leadingg gglobal nation,, it is
INNOVATION AND LEARNING imperative to give the
highest priority to the
“To achieve our expansion of world-class
vision, how will educational
we sustain our
ability to
change and
improve?”
? opportunities." Sheikh
M k
Maktoum bi Mohammed
bin M h
bin Rashid Al Maktoum,
d
Deputy Ruler of Dubai.

DUBAI; The Road Ahead “Our
vision is to become one of the top tourist destinations…
destinations ”
2006
• D
Dubai
b i Healthcare
H lth City;
Cit Massive
M i Complex
C l to
t
House Harvard Medical International, a
Division of Harvard Medical School
• 2007
• The Palm Jumeirah
• Dubai Biotech & Research Park
• Terminal 3 of Dubai International Airport
• Dubai Logistics City; First Phase of Jebel Ali
Airport City.
destinations ”
2008
• Burj Dubai; Currently The Tallest Planned
Building In The World.
• The Palm Jebel Ali
• The World; Ambitious Man-islands In The
Shape Of The World
• 2012
• Dubai Metro Rail; Capable Of Carrying 1.2
Million Passengers A Day.
destinations ”
2014
• The Palm Deira.
• 2015
• Passenger
g Facilities At Jebel Ali Airport
p
City; Dh30 Billion Facility, Currently The
g
World’s Largest Planned Airport,
p , Will
Handle 120 Million Passengers A Year.

destinations ”
2018
• Mega Cargo Terminal At Dubai International
Airport.
Airport
• 2020
• Dubai Exhibition City; Located Within Jebel
Ali Airport
p City,
y, This Should Draw In
Conferences, Exhibitions And Other Events.
• Dubai Hopes To Host 2020 Olympic Games.
Games
COMMUNICATING AND LINKING
Communication and Education
Of B.S.
S To A
All Employees,
Senior Executives and Board
How?
Linking the B.S. To:
Team andd Personall
Goals
Linking Personal Rewards
To Performance Measures
LINKING THE B.S.
MEASURES TO STRATEGY
The B.S. Indicators Should Include:
Lag Indicators, Such As Profitability,

Market Share, Employee Skills, etc….
Leading Indicators, Which Reflect the

Uniqueness of the Business, Such As:
Defect Rates, Cycle Time, etc…
Measurement Musts
•LLess is
i more A simple,
i l
• Leading and balanced view
Lagging of the
• Hard and Soft organisation’s
• Strategic progress
Alignment towards its
objectives
“If you can’t measure it, you can’t manage it” Kaplan and Norton, 1996

Getting
g the Balance Right
g
LAGGING LEADING
Hard Soft
Objective Subjective
Outcome Learning and Growth
Control Leadership
Stability Change
Tactical Strategic
Bottom up
p measures Top
p down measures
Lagging Leading

Leading
g and Lagging
gg g Indicators
A High Proportion of
Lagging Leading
Hard
Objective
Soft
Subjective
the
h Measures
M Sh
Should
ld B
Be
Outcome Learning and Growth
Control
Stabilityy
Tactical
Leadership
Changeg
Strategic
Forward Lookingg and
Bottom up measures Top down measures
Proactive, So That the
Balanced Scorecard Can
Be an Effective Agent
of Organizational Change.
Rockwater case

Balanced Scorecard
FINANCIAL
Laaggingg
H
Hard
financially, how
should we
appear to our
shareholders?”

should we & and customers,,
appear to our Strategy what business
we excel at?”
Leadinng
L
Soft
vision, how will
ft
we sustain our
ability to
change and
improve?”

The Essentials off
Developing a Successful
Balanced Scorecard

Balanced Scorecard Fundamentals
Financial
"To succeed Objectives Measures Targets Initiatives
financially, how
should we appear
to our
shareholders?"
C t
Customer I t
Internal
l Business
B i Process
P
"To achieve our Objectives
vision, how should
Measures Targets Initiatives Vision "To satisfy our
shareholders and
we appear to our customers, what
customers?" and business
processes must
we excel at?"
Strategy
Learning and Growth

"To
To achieve our Objectives Measures Targets Initiatives
vision, how will
we sustain our
ability to change
and improve?"

Essential 1 - Objectives for the Scorecard
¾ Why are you developing
a Balanced Scorecard?
¾ BSC alone will not
transform the organization
¾ Clear objectives are
critical
iti l for
f communication,
i ti
education, and guiding BSC
evolution
Put the big rocks in first!
The beginning
g g is the most important
p part
p off the work
-Plato
Objectives for the Balanced Scorecard
Aligning
Improvement Initiatives
leadership
Clarifying
Setting
All
Targets
g FINANCIAL CUSTOMER INTERNAL EMPLOYEE
PROCESSES LEARNING
AND
GROWTH Strategies
Communication Aligning
And Education Employee Goals

Essential 2 – Executive Sponsorship
“To make initiatives work it took passionate, all-
consuming commitment from the top…Every
leadership action must demonstrate total
commitment to the initiative.”
-Jack Welch
• No BSC initiative will survive

without active executive sponsorship
p p
• Executives hold key knowledge for
BSC success
• Everyone watches what the boss watches
• You can influence executive sponsorship
Essential 3 – A Solid Implementation Team
“AA team is a small number of people with complementary skills who are committed
to a common purpose, performance goals, and approach for which they hold
themselves mutually accountable.”
-Katzenbach
K b h & Smith,
S i h The
Th Wisdom
Wi d off Teams
T
• No single person or group

holds all the information
necessary to build the BSC
• Team members are crucial
BSC ambassadors
• Team members influence
their own executives

Essential 4 – A Strong BSC Champion
“A recent review
i off our Balanced
B l d Scorecard
S d Hall
H ll off Fame
F organizations
i i
demonstrates that virtually every successful CEO had a partner – a change agent
who played the lead role in introducing the Balanced Scorecard program.”
- David P. Norton, The Balanced Scorecard Report (May-June, 2002)
¾ Guides the BSC process

¾ Provides thought leadership
on the BSCSC
¾ Must be a skilled
communicator
i t
¾ Should be ffull-time role in
the organization
Essential 5 – Training and Education
Companies that don’t
encourage employee
education
d i off all
ll kinds
ki d are
dumb!
¾ The pperceived simplicity
p y of the BSC
means training is often overlooked – that
is a mistake!
Tom Peters
¾ BSC is simple, but not simplistic
¾ Training “levels
levels the playing field
field” and
encourages involvement
¾ Training
T i i leads
l d to important
i questions
i
Essential 6 – Cause & Effect; “Strategy Maps”
9 A good Balanced
Financial
Increase
Profitability
Scorecard should “tell the
story
t off your strategy”
t t ”
Serve
customers
Deliver
Customer
Value
9 Strategy Map specifies
mer
on their Through
relationships and makes
Custom
terms I t
Integrated
t d
Offerings
them testable
9 Also acts as a powerful
Internal Processses
Continuously
y Allocate
Capital Develop
Improve
Customer Resources New
Products
Experiences Effectively
diagnostic tool for your
BSC
Build an
9 Great way to
E.L. & G
Environment Create a
where people Improve
maximize Communications Safe &
their
personal
potential
Through
Technology
Healthy
workplace communicate your
Scorecard

Essential 7 – Reporting Results (and soon!)
¾ Don’t wait until you have
100% data to start reporting
¾ It’s o.k. to start with simple
p g tools
reporting
¾ Structure your Management
review meetings around BSC
Is this what your results
Management
Reporting feels like? ¾ Track action items and
If so, you need a review progress
Balanced Scorecard!
Management Meetings Need to Focus on
Operational Issues Relating to the Strategy
“The
The Only thing worse than Bad News
is: Bad News Reported Late”
Balanced Scorecard
Financial
Strategic Objectives
Financially Strong
Strategic Measures
Return of Capital Employed Operational Questions
Delight the Consumer Mystery Shopper Rating
• Why did we miss the target?
Cust
Win-Win Relationship Dealer/Pioneer Gross Profit Split

Safe & Reliable Manufacturing Reliability Index
Days • What correcting actions should we
Internal
D A
Away ffrom W
Work
kRRate
t
corrections
i Competitive Supplier Laid Down Cost vs. Best Competitive result
l
Ratable Supply consider?
Motivated & Prepared Strategic Competency Availability • Are initiatives on schedule?
L&G
• Do you need more resources?

Operational Control • etc
Loop
Performance
Initiatives & Programs

i
input
t output
t t

Essential 8 – Cascading the Balanced Scorecard
Mission, Values, Vision

9 Allow
Strategy
everyone
y to
demonstrate
Financial Customer Internal Processes Emp. L. & G.
ObjectivesMeasuresTargets Initiatives ObjectivesMeasuresTargetsInitiatives Objectives MeasuresTargets Initiatives ObjectivesMeasuresTargets Initiatives
how they
contribute
ib to
Financial
ObjectivesMeasuresTargets Initiatives
Customer
ObjectivesMeasuresTargetsInitiatives
Internal Processes
Objectives MeasuresTargets Initiatives
Emp. L. & G.
ObjectivesMeasuresTargets Initiatives overall goals
9 Create a
Financial
Customer
ObjectivesMeasuresTargetsInitiatives
Internal Processes
Objectives MeasuresTargets Initiatives
Emp. L. & G.
consistent
l
language
Team and Personal Balanced Scorecards
through
measurement

Essential 9 – Link the BSC to Management Processes
9 BSC has evolved from a measurement to a
“strategic management” system
9 Using the BSC, budgets are based on strategy
((less than 40% of organizations
g currently
y make
this link)
9 Linking the BSC to compensation makes it “real”
real
for many employees
Budgets Compensation

Essential 10 – Making the BSC Part of the Organization
¾Don’t think of the Balanced
Scorecard as a project to be
“ h k d off”
“checked ff”
¾Give the BSC a home in the
organization
¾Assign accountability for the Will your Balanced
BSC (the BSC Champion??) Scorecard stand the
test of time?
¾Develop BSC policies and
procedures – but keepp them
p
simple!
¾Update the Scorecard’s core
elements regularly

AUTOMATING YOUR BALANCED
SCORECARD
¾The Balanced Scorecard Report
p
– Please refer to:
http://www.som.cranfield.ac.uk/som/cbp/BScorecard.html
List of Software vendors with solutions to

supportt a BSC iimplementation,
l t ti including:
i l di
Company names,
P d tN
Product Names and d
Internet Addresses

Description of BSC Methodology
• Customer Needs & SWOT

• Organization Values
• Vision & Mission • Strategy Elements
• Communication •KPI’s or
Metrics
• Targets
Balanced
B l d Scorecard
S d A
Assessment
t St t
Strategy Obj ti
Objectives Strategy
St t Performance
P f
Map Measures
Development
• Causal Links
• Strategic Results • Performance Drivers
Initiatives Cascade Automation Evaluation

• Performance Results
• Revised Strategies
• New Projects • Alignment • Software

• Lower Level Scorecards • Performance Reporting
• Knowledge Sharing
Meirc Training & Consulting All rights reserved. Do not copy without permission. BSC -Mod 04 - 85
SMC Balanced Scorecard
FINANCIAL
financially, how
should we
appear to our
shareholders?”

h t business
b i
we excel at?”

vision, how will
we sustain our
ability to
change and
improve?”

Perspective OBJECTIVES Unit of Measure (KPI) Target
Learning

Process

Customer

Financial

Module Five
Benchmarking
“A
A Tool for Becoming a
World Class
Organization”
"Strive for perfection in everything. Take the best that exists and
make it better. If it doesn't exist, create it. Accept nothing nearly
right or good enough."
eno gh " - Henry
H R
Royce

FINANCIAL
financially, how
should we
appear to our
shareholders?”
?
appear to our
customers?”
? Strategy what
h t business
b i
processes must
we excel at?”
?
vision, how will
we sustain our
ability to
change and
improve?”
?
On Settingg Targets
g
“Targets
g handed down byy
upper management have
been markedly less
successful
successful”
Rockwater case
(Targets need to be agreed and
updated)
T A R G E T S
¾How can you set targets for various
objectives?
¾.
¾.
¾.
¾.
¾.
¾.
¾.
¾.
¾
¾.
T A R G E T S

HOW TO SET TARGETS
9Local Experience (Current & Prior Periods)
9Experience
p in Similar Markets,, Countries or
Internal Units
9Observation and Work Measurement
9Judgment & Experience
9P bli h d S
9Published Standards
d d
9Identical Competitive Operations
9Best World-Wide Similar
Operations “(Benchmarking)”
BENCHMARKING, Some Definitions:
9A Benchmark Is a Point of Reference
A i
Against Which
Whi h Thi
Things A Are MMeasured.
d
9Benchmarkingg Is an External Focus
on Internal Activities, Functions, or
Operations in Order to Achieve
Continuous Improvement While Meeting
andd Exceeding
E di Customer
C t Expectations.
E t ti
9Benchmarking Is a Change
Management Tool.*
Some Definitions:
Benchmarking became popular several decades ago
as part of the total quality management
movement. An IBM executive defined it as
" . . . The ongoing activity of comparing
one's own process, product, or service
against the best
best-known
known similar activity
activity,
so that challenging but attainable goals
can be set and a realistic course of
action implemented to efficiently become
and remain best of the best”.
A Famous Quote:
Q
“Mastering Life Is the

Process of Moving
From Where You
Are to Where You
Want to Be”
(Werner Erhard)
This Is the Essence of Benchmarking

BENCHMARKING
Benchmark
Best practice
Filling the gap
Curent practice
Time
“I’ve always thought I was
extra handsome, and very
special”
No my friend, you,ve always been

g and ordinaryy person
an average p

BENCHMARKING:
In one dramatic benchmarking example,
General Motors,
Motors in the early 1980s,
1980s learned
that a Toyota assembly plant could change
its stamping presses from one model to
another in eight minutes, compared with the
eight hours GM plants spent to change over
the same basic equipment. Clearly a
deviation of this magnitude
g between its
current performance on a critical process
and industryy best practice
p served as a
wake-up call for GM.
Challenges internal paradigms
on what is possible
Sets realistic but
aggressive goals
Benchmarking
g
Learn from
L f the
th
What
leaders’ experiences
For?
Creates early awareness of
what is possible
Promotes teamwork that is based on
competitive need & driven by data
So in a way, we
always Benchmark,
Benchmarking it is a matter of
What when!!
For?
What are in your opinion
reasons that stop many
from being early adopters???
¾.
¾.

COMPARING SCENARIOS
Without benchmarking With benchmarkingh
Defining 9Based on history or 9Based on market

gut feel reality
Customer 9Acting on perception 9Acting on objective
Requirements evaluation
Establishing 9Lagging industry 9Industry leadership

Effective 9R
9Reactive
i 9P
9Proactive
i
Goals
9Understand
Understand the
9
9Internally focused
competition
Becoming
9Revolutionary ideas
Competitive 9Evolutionary change with proven
performance
COMPARING SCENARIOS
Without benchmarking With benchmarking
Developing Strengths Performance

True And Outputs
Measures Weaknesses Known, based
of Not on best in
Productivity Understood Class
Industry 9Few solutions 9Many options

Practices 9Continuous 9Breakthroughs
i
improvementt

LEVELS OF BENCHMARKING
Internal Competitive
Non- World
Competitive Class
The greatest danger for most of us is not that our aim is too high and we miss it, but
that it is too low and we reach it. …...Michelangelo
Out of the Box Benchmarking
Out-of-the-Box
¾ Why would a leading medical center want to
study Marriott’s hotel guest registration process?
Or Avis Rental Car’s staffingg system?
y
The medical center’s patients judged their
hospital
p experience
p not onlyy on the quality
q y off
care, but also on how much time, hassle, and
paperwork was involved in the admission process.
So, the medical center asked, “WHO IS
ADMITTING BETTER THAN WE DO?”

Out-of-the-Box Benchmarking
¾Why would an airline spend time
comparing notes with-of all things-an
Indianapolis 500 pit crew?
The airline needed faster maintenance
turnaroundd than
h anyone iin the
h airline
i li
industry currently provide. Who better
than
h a race car piti crew to shed
h d a
whole new way of looking at the
process??
Whyy & when should youy
benchmark outside your industry?
H
Here are six
i reasons:
1. To avoid reinventingg existing
g
solutions
2 To achieve breakthrough
2.
improvement and accelerate
change
h
3. To drive and direct reengineering
Why & when should you
benchmark outside your industry?
4 To set stretch goals
4.
5. To overcome NIH (not invented
here). Benchmarking offers
evidence,, not theory,
y, that ideas
NIH can work.
6 To anticipate and head off new
6.
competitors.
You can’t beat competitors by following them
Out-of-the-Box Benchmarking
“Benchmarking
Benchmarking is the
practice of being humble
enough to admit that
someone else is better at
something and wise enough
to learn how to match and
even surpass them at it”
it
Source: http://www.apqc.org/free/articles/dispArticle.cfm?ProductID=647
LEVELS OF BENCHMARKING
Group/Individual Exercise
WHERE TO LOOK ADVANTAGES DISADVANTAGES
Internal
Competitive
N
Non-competitive
titi
World Class

Myths about Benchmarking
9Benchmarking
9B h ki iis copying
i or imitating
i it ti
9Benchmarking is simply a matter of
raising your sights to the level of top-
notch organizations
9Benchmarking is only for streamlining
manufacturing g pprocesses
9Once you have benchmarked the best,
you’re
you re ready for the long term.*
term.

CONCLUSIONS
Benchmarking:
– Allows
ll you to make
k comparisons
between your processes and others
– Helps to spot examples of best practices
which you can seek to copy/improve on
– Helps to spot mistakes and errors which
you can seek to avoid
Are there other benefits from benchmarking
g
which may be useful?
What is Benchmarking
Benchmarking Process
A continuous
i
process of 4. Review & 1. Data
measuring Adapt Gathering
pproducts,, services
or practices to gain
new insights and 22.
3. Implement
ideas for Identify
Changes
Gaps
impro ement
improvement
The Seven Steps
p to Benchmarking
g
7. Monitor the process.
6. Set goals and develop action plans
5
5. A l
Analyze d
data
t & d
determine
t i ththe gap
4. Collect the data
3. Identify who to benchmark
2. Determine what to measure
1. Identify what to benchmark

Stepp 1 to Benchmarking
g
9Clarify the benchmarking
objective
9Decide whom to involve
9D fi
9Define th
the process
9Consider the scope
9Set the boundaries
9Agree
g on the pprocess
9Flow chart the process
1. Identify what to benchmark
Step 2 to Benchmarking
e c a g
9Establish Process Measures
Consider measures outside
the process
¾External customers
¾Internal customers
9Verifyy That Measures Match

Objectives
2. Determine what to measure
g
9Conduct General Research
9Trade magazines, industry publications,
professional journals, market research,
government studies, computer databases,
telephone or mail surveys, benchmarking
experts and consultants, organizations
specializing in benchmarking data.
9Ch
9Choose the
h LLevell to B
Benchmark
h k
9Internal, competitive,
noncompetitive,
titi world
ld class.*
l *
3. Identify who to benchmark

g
9Using a Questionnaire
9Developing a questionnaire
9Through a Visit
9Preparing for the visit
9Visit
9Documenting the visit
9Describe processes
9Describe differences
9Who is the best??
4. Collect the data
9Quantitative Data
9Qualitative
Q Analysis
y
9Systems Policies & Procedures
9Level & experience of staff,
management style.
9Procedural Policies & Practices
9 h l
9Technology, methods
h d or processes
9Structural Policies & Practices
9Budgeting,
9B d ti methods
th d off purchasing
h i &
inventory practices
5. Analyze data & determine the gap
g
9The important thing about
benchmarking is not the data
you collect but the
understanding of the process
by which organizations achieve
th i performance,
their f and
d more
importantly, the things that did
not work.
5. Analyze data & determine the gap
9 Set Performance Goals
9 Goals Should Be Achievable in
Increments
9 Goals Should Be:
9 Realistic, Measurable, Finite
9 Goals Should Be Supported
pp
9 Develop an Action Plan
1) Determine tasks, timeframes & responsibilities
2)) Develop
l a contingency plan
l

e c a g
9 Once you know what you do
– (not as obvious as you may
think) – and what you have
to do to become world -
class you are ready to get
class,
involved in process
d l
development t and
d th
the
implementation of new
techniques.
9To be world-class,
you need every new
process to be
understood,, well
defined and
consistently applied.
g
9Track the changes
9Evaluate measures in increments
9Benchmarking progress reports
9Regular
9R l progress meetings
ti
9Monitor customers
9Monitor suppliers
9Ongoing
g g monitoringg
9Make benchmarking a habit
7. Monitor the process
Best Practice Benchmarking {BPB}
British Airways is one of the classic turnaround stories of the 1980s. To raise the quality of the
service it offered,
offered it had to undertake a wide range of changes,
changes from new uniforms to extensive
training and reorganizing of jobs to bring more people closer to the customer. These changes
were based on extensive market research, which identified what customers expected from a major
international airline.
At the same time, the airline examined in detail how other airlines went about delivering all the things
that mattered to customers.
customers Establishing best practice allowed it to cut costs,
costs raise service quality
and increase revenues. Today it is one of the world's most profitable airlines.
The monitoring activity continues. Staff from a headquarters department are charged with providing
to the board each month a detailed analysis of a different competitor, not merely in terms of
financial information, but in terms of the service provided, as experienced by members of the
d
department. Th
The uniti collects
ll andd distributes
di ib information
i f i on everything
hi from
f the
h in-flight
i fli h food
f d
offered by competitors, to prices over certain routes; from their fuel costs to how much they pay
to get aeroplane cleaned. Highlighted in those reports are areas where performance of the
competitor is better than of BA. the result ? A constant pressure to keep improving.
Caption
p quote:
q "We can onlyy judge
j g our own performance
p byy understandingg our marketplace
p
and how competitors deal with it." -- Michael Bruce, projects development manager, British
Airways.

“we can only judge our own

performance by understanding
our marketplace and how
competitors
tit deal
d l with
ith it”
Michael Bruce
Projects Development Manager
British Airways
ICL benchmarks more than 20 of its competitors both on company performance and on product
technology. The information it gleans is distributed throughout the company to ensure that every
function is aware of how it compares. On the overall performance side, information collected
includes:
- average debtors/creditors as a percentage of revenue
- research and development as a percentage of revenue
- return on capital employed
- revenue pper head
On the product side, benchmarking at ICL includes:
- technology : how each component in a competitor's products compares with ICL's standards
: how quickly the competitor has assimilated new technology
: reliabilityy
- Delivery : speed and reliability
: payment arrangements
- and a variety of measurements in packaging, manufacturing, component costing and similar
areas.
Caption quote: "We are using benchmarking as an agent of change. It acts as a stimulus to
keeping the entire market in mind." -- John Arnell, manager, business intelligence, ICL.

“we are using benchmarking as

an agent of change
change. It acts as
a stimulus to keeping the
entire
ti market
k t in
i mind.”
i d”
John Arnell
Manager Business Intelligence
Manager,
ICL
At Motorola's semiconductor plant in East Kilbride, BPB concentrates on manufacturing

technology. Typical areas it has recently benchmarked are:
* yyield and product
p characteristics for
f a new MOS 9 silicon wafer,
f , against
g Toshiba,,
under a technology transfer agreement
* general wafer fabrication technology: all Motorola plants exchange benchmarking
information on cycle time, scrap, yield, productivity and other key measurements.
Having identified best performance, the relevant operations managers meet quarterly
aroundd the
h worldld to pass on how
h theyh do
d it.
* automated assembly performance: this is benchmarked weekly against its Japanese
Motorola counterpart, which in turn benchmarks against a Japanese subcontractor
* warehouse performance: in particular, cycle time, quality, productivity and space use
against other Motorola installations
* purchasing performance: both against Motorola companies and friendly companies
outside the group
* salary and benefits packages, through a Motorola-initiated exchange of data with
other Scottish manufacturing companies.

9Silicon Wafer Against Toshiba

9Against Self in Different Plants
9Automated Assemblyy Performance
f Against
g
Motorola Japan, Against Japanese
Subcontractors
9Purchasing Against Friendly Companies
9Salaries With Other Scottish Manufacturing
f g
Companies
One Last Quote:
“Make it a practice to keep on
the lookout for novel and
interesting ideas that others
have used successfully. Your
idea only has to be original
in its adaptation to the
problem you are working on”
(Thomas Edison)
This Is the Essence of Benchmarking

BENCHMARKING:
Mercedes Benz employed a group of craftsmen whose task it was to
check every vehicle coming of the production line, and to put
right any faults found. The company discovered that it spent
more labour hours per vehicle on this rectification activity than
Toyota needed to build a Lexus right first time.
What do y
you think was the lesson to Mercedes
from this benchmarking project?

C
Case St
Study
d STAR MEDICAL CENTRE
Group Exercise
Identify four benchmarking opportunities for
SCR. Define what processes you will
benchmark and against what industry /
company (Competitive, Non-Competitive or
World Class).
How will y
you track your
y success (which
( KPI’s).)

Case Study STAR MEDICAL CENTRE
Group Exercise
PROCESS TO WHERE KPI

BENCHMARK
.
.
.
.
.
.
.
.
.
.
.
.

² Every morning in Africa a gazelle wakes
up It knows it must run faster than the
up.
fastest lion or it will be killed.
² Every morning a lion wakes up. It
knows it must run faster than the slowest
gazelle or it will starve to death.
² It doesn’t matter whether you’re a lion
or a gazelle, or where in the world you
work. In the modern business jungle,
when the sun comes upp - yyou’d better be
running. Will the BSC Help?
SUCCESS
“Some people dream of success
… while others wake up and
work hard at it”

One Last Thing…
“Success is neither magical or
mysterious.
t i Success
S iis the
th natural
t l
consequence of consistently applying
the fundamentals.”
- Jim Rohn
THANK YOU & GOOD LUCK

in Applying
A l the
h BSC ffundamentals
d l coveredd
Chaouki Eid
ceid@meirc.com

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Module One

 The Strategy Focused Organization (SFO).

Meirc Training & Consulting BSC - Mod 01 - 3

 Can strategy be traced back to ancient times?

 Or is it a post World War 2 invention? …………

Meirc Training & Consulting BSC - Mod 01 - 5

Meirc Training & Consulting BSC - Mod 01 - 6

 “Management’s job is not to see the company

Meirc Training & Consulting BSC - Mod 01 - 8

 Strategia (Latin): A maneuver

 Strategy (Sun Tzu): “To subdue

Meirc Training & Consulting BSC - Mod 01 - 9

Meirc Training & Consulting BSC - Mod 01 - 11

Source: Gulf News, Sep 22, 2007

Meirc Training & Consulting BSC - Mod 01 - 12

Meirc Training & Consulting BSC - Mod 01 - 13

¾Poor working morale 14% 12% 11% 8%

Meirc Training & Consulting BSC - Mod 01 - 14

 Communicates a sense of purpose

 More efficient use of limited resources

 Increased motivation and morale

Meirc Training & Consulting BSC - Mod 01 - 15

Active Making the

The 7-Step Model

GOALS and OBJECTIVES S

 Is the organization relatively free of major crises?

 How did we get here? (Our momentum)

 Where are we going? (The direction)

 Where should we be going? (Desired

Meirc Training & Consulting BSC - Mod 01 - 20

 Poor medical records system.

 Poor customer service rendered by the SMC de-motivated staff.

Meirc Training & Consulting BSC - Mod 01 - 22

Meirc Training & Consulting BSC - Mod 01 - 23

Meirc Training & Consulting BSC - Mod 01 - 24

Meirc Training & Consulting BSC - Mod 01 - 25

 The Purpose of SWOT Analysis.

Meirc Training & Consulting BSC - Mod 02 - 1

GOALS and OBJECTIVES S

Meirc Training & Consulting BSC - Mod 02 - 4

• Weaknesses – Those things that prevent you from

Meirc Training & Consulting BSC - Mod 02 - 6

• Opportunities – Potential areas for growth and

Meirc Training & Consulting BSC - Mod 02 - 7

• Threats – Challenges confronting the organization

Meirc Training & Consulting BSC - Mod 02 - 8

 What external factors  What Threats (negative

Meirc Training & Consulting BSC - Mod 02 - 9

Meirc Training & Consulting BSC - Mod 02 - 10

Weaknesses: A high nurse turnover has continued to affect nursing

Meirc Training & Consulting BSC - Mod 02 - 11

Opportunities: The hospital continues to excel in its various endeavors because

Meirc Training & Consulting BSC - Mod 02 - 12

Meirc Training & Consulting BSC - Mod 02 - 13

'Starbucks' mission statement is 'Establish Starbucks as the premier

Meirc Training & Consulting BSC - Mod 02 - 16

Meirc Training & Consulting BSC - Mod 02 - 17

External Assessment: Marketplace,

Good Points Possible Pitfalls

Meirc Training & Consulting BSC - Mod 02 - 18

 One Strength: ____________________

 One Weakness: __________________

 One Opportunity: _________________

 One Threat: _____________________

The Strategy Focused Organization (SFO).

Can strategy be traced back to ancient times?

Or is it a post World War 2 invention? …………

“Management’s job is not to see the company

Strategia (Latin): A maneuver

Strategy (Sun Tzu): “To subdue

Communicates a sense of purpose

More efficient use of limited resources

Increased motivation and morale

Is the organization relatively free of major crises?

How did we get here? (Our momentum)

Where are we going? (The direction)

Where should we be going? (Desired

Poor medical records system.

Poor customer service rendered by the SMC de-motivated staff.

The Purpose of SWOT Analysis.

What external factors What Threats (negative

One Strength: ____________________

One Weakness: __________________

One Opportunity: _________________

One Threat: _____________________

One Strength: _____________________

One Weakness: ___________________

One Opportunity: __________________

One Threat: ______________________

One Strength: _____________________

One Weakness: ___________________

One Opportunity: __________________

One Threat: ______________________

What you want to be

Has a lifetime of 5, 10, or

“Our vision is to export wheat instead of

“Our vision is to become one of the top

“Airplanes are interesting toys, but of no military

What the Company/department

How it does it, and

Does it specify focus (Key Result)

Does it tell employees where they need

Goals, Objectives and Targets

It is like following a road map;