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Main issues
a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results financial measures by themselves are inadequate for guiding and evaluating the journey that information age companies must make to create future value
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Assigns Responsibilities
every key business driver and sub-measure must have a person assigned who has the responsibility for the performance of such driver
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Key Measures
key measures are aligned to supporting the performance of key drivers of the business
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Processes
management processes (business planning, forecasting, budgeting, performance management, etc.) support the strategy the balanced scorecard provides the link between priority and activity
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D. Implementation Principles
UNUM Corporation, a risk insurer, developed and implemented a five year balanced scorecard UNUM has about 7,200 employees and operations in US, UK, Canada, Europe, Latin America. focused on internal communication and an innovative compensation scheme developed a balanced set of measures that would reflect the interests of all UNUMs stakeholder groups 13 senior managers form throughout the corporation developed a set of balanced goals and measures that would be meaningful to all employees the chairman told the team that he wanted financial, customer, employee and productivity targets, gave it a budget and, most importantly, his whole support
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UNUMs balanced scorecard consisted of four perspectives: UNUM people Operating effectiveness Customer satisfaction Shareholder value. Each perspective had a vision, quantitative measure and goal. The achievements were time-sensitive The employees were encouraged to have the mind of a customer and the pride of an owner by implementing a Stock Option Plan A further compensation mechanism used to focus employees attention onto the goal was the annual bonus
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by the end of the five year period the company made outstanding improvements in areas concerning all four perspectives and obtained very good financial results the Vice-president of the company commented: the Balanced Scorecard is an excellent way to focus attention on creating value.
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