Transcript Slide 1

STRATEGIC MANAGEMENT AND THE
BALANCED SCORECARD
Presented
to The Solutions Session for Managers,
CEO’s and Senior Employees at the
Caribbean Confederation of Credit Union’s
56th Annual International Convention
Panama City, June 2013
Desmond Sabir
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I am Grateful to Allah (Almighty God) for the
opportunity to present this workshop
Ralph Holder and the Organisers of the CCCU 59th
Convention for accepting my proposal
Mr. Anthony Pilgrim, the General Manager, BCCULL
for providing initial information
You, the audience for being here for this
presentation
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The Balanced Scorecard Institute
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Other sources
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Introduce The Balanced Scorecard as a
Strategic Management system for Credit
Unions
Explores the benefits that can accrue to
Credit Unions in building and implementing
scorecard systems
Identify Credit Unions that have taken the
Balanced Scorecard journey
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Introduction to the balanced scorecard
(BSC)
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Building a Balanced Scorecard
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The usage of the BSC in Credit Unions
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Questions and discussions
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“People and their managers are working so
hard to be sure things are done right, that
they hardly have time to decide if they are
doing the right things.”
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Covey
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A framework that translates a company’s
vision and strategy into a coherent set of
performance measures.
It translates mission and strategy into
objectives and measures, organized into four
different perspectives
communicate mission and strategy
inform employees about the drivers of
current and future success (Kaplan and
Norton 1996).
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is an integrated strategic planning and
management system for establishing and
communicating an organisation’s vision,
mission and strategy to stakeholders and
employees, and for aligning the day-to-day
work to the strategy
Provides a disciplined framework for
planning and measuring strategy, as viewed
from different dimensions, or perspectives,
of organisational performance
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Uses performance measures to monitor
progress, provide guidance in budgeting, and
other inform strategic decision making
A change initiative for visualising and
communicating an organisation’s long-term
strategic intent
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An effective strategic management system for
aligning day-to-day work to an
organisation’s vision and strategy using
strategic performance measures and strategic
initiatives;
An integrated framework for informing
strategic budgeting, and allowing the
organisation to learn what works and to
become more strategy focused.
In fact, it is a planning and management
system, not just a measurement system!
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Develop a plan for the BSC program and
organize the effort
Assess the organization internally and
externally
Define organization mission, vision, values,
pains & enablers
Identify primary customers and stakeholders
Create a change management plan
Communicate the commitment to
performance based management
Stand-up the BSC teams
Hold strategic planning workshop
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Mission & Vision statement reviews
Organization chart review
Customer Analysis
Organizational Assessment survey
SWOT Analysis
◦ Strengths, Weaknesses, Opportunities, Threats
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Benchmarking against other organizations
Gap analysis
Reports on the organisation e.g. surveys etc
PEST factors
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BSC Executive Champion selected-engaged
leadership
BSC Program Champion(s) selected
Business case for the balanced scorecard
developed
Employee buy-in process developed
Champions understand their roles and
responsibilities
Champions understand facilitation styles and
options
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Champion manage the workshop process,
including documentation of workshop
proceedings
Hold the Strategic planning workshop
Identify Communications team members
Facilitate the communications workshop
Interactive Communication: Constantly,
Emotionally and Directly
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SWOT result summarized:
◦ Enablers - Strength , Opportunities
◦ Pains - Threats, Weaknesses
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Mission and vision statements prepared
Management commitment to BSC process
secured
BSC teams selected and empowered
Resource commitments secured
BSC plan and timetable constructed
Communication strategy developed
Change management
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Develop Customer/Stakeholder needs
Develop the customer Value proposition
Develop an Overarching strategic result,
tied to vision if required
Develop strategic Themes and strategic
results
Choose perspectives
Document and communicate the strategic
thinking process results
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A customer value proposition (CVP) is a
description of the experiences a target
user will realize upon purchase and use
of a product
The CVP is the keystone for effective
product marketing activities. It brings
together customer intelligence,
competitive insight, and product
valuation. It delivers a concise,
supportable statement of the
service/product’s value.
An important tool in the product/service
marketer’s toolset
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The development of overall Business Strategy
Overarching strategic themes are developed
that contain specific business strategies
Derived from vision & assessments
Provides more specific focus for planning
Strategic Themes aka Critical success factors
Examples of common strategic themes
include:
◦ Build the Business
◦ Improve Operational Efficiency
◦ Develop New Products
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Strategy is a hypothesis of what we
think will work and be successful.
 The remaining steps in the
scorecard-building phase provide the
basis for
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◦ testing whether our strategies are
working
◦ how efficiently they are being executed,
and
◦ how effective they are in moving the
organization forward toward its goals
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Leaders and managers show strong support
for the scorecard development process
Identify theme team members
Train theme team members
Champions manage the theme team
workshop process
Champion check “Strategic altitude” and
strategic element alignment periodically, to
ensure proper fit of the scoreboard
development process pieces
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Customer needs and value proposition
described
 Overarching strategic results prepared
 Strategic themes and strategic –result
for each theme developed
 Perspective selected
 Results documented and
communicated
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Develop Strategic Objectives
 Organize in order to capture objective
commentary (short paragraph on what
is included and not included in each
objective)
 Place strategic objective into strategic
themes and perspectives
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Objectives is a decomposition of
business strategy into smaller
components
 Objectives are the basic building blocks
of strategy – the components or
activities that make up complete
business strategies.
 They identify specifically the most
important things to be improved within
each perspective
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They provide ample opportunities for
true creative thinking and innovative
solutions
They link together to form strategies to
achieve a strategic result
They clarify the organisation’s strategic
intent
They provide documentation and
commentary on the critical thinking
process
In other words Strategic objectives are the
DNA of strategy!
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Perspectives are diverse ways of looking at
the organization
Desired Outcomes: meaning of mission
success for each perspective & strategic
theme
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Champion co-ordinate communications of
progress on scoreboard development
Review strategic objective for completeness
and documentation
Leaders stay engaged
Leaders begin analyzing implications of new
strategic direction on organization structure,
the board, customers and employees and
other stakeholders
Identify possible employee resistance issues
and develop a plan to deal with the issues
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Strategic objective defined
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Objective commentary prepared
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Objectives categorized by perspective and
strategic theme
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Link strategic Objective in cause-effect
relationships, to show the value chain to
customers
Create an enterprise-wide strategy map from
theme maps
Document and communicate commentary
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For each strategic theme, proposed a chain of
causes and effects that will lead to the
desired outcomes.
Then map the chain on a “strategy map”
The strategy map tells the story of your
strategy
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Strategic Map of the organization’s overall
business strategy is created
Using cause-effect linkages (if-then logic
connections)
the components (objectives) of strategy are
connected and placed in appropriate
scorecard perspective categories
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Prepare for integration of theme strategy
maps into the enterprise-wide strategy map
Champions facilitate the development of the
strategy map
Develop objective commentary, to document
the strategic objectives on the enterprisewide strategy map
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Begin preparation of the scorecard
‘roll out” plan and schedule
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Schedule the all-hands roll out event
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Plan for external roll out to customers,
suppliers and the board
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Cause-effect relationships among objectives
developed
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Theme team maps developed
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Enterprise –wide strategy map created
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Commentary documented and communicated
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Develop one or more performance measures
for each objective
Set expected targets and thresholds for each
measure
Complete the data definition table
Develop baseline data for each performance
measure
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What get’s measured gets done.
 If you do not measure results you
cannot tell success from failure.
 If you cannot see success, you cannot
reward it.
 If you cannot reward success, you are
probably rewarding failure.
 If you cannot recognise failure, you
cannot correct it and on the positive
side.
 If you cannot control it you cannot
improve it.
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For each theme/desired outcome goal,
the team should ask “how will we
know if this goal is being achieved?”
 The team should identify how each
goal should be measured, e.g.
surveys, data collection, etc.
 Team should examine baseline data
(where available) to set schedules and
targets
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Champions facilitate the development of
performance measures and targets, linked to
the strategic objectives on the enterprisewide strategic objective on the enterprise –
wide strategy map
Begin planning for the collection, reporting
and distribution of performance information
Develop a reporting plan for internal and
external stakeholders
Document the assumptions surrounding
performance measures and targets in
performance data definition tables
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Performance measures and targets for each
objective
A balanced set of key performance
measures
Baseline data for each performance
measure
Benchmarking plans
Upper and lower thresholds for each
measure
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Identify potential new strategic initiatives
Identify selection criteria for strategic
initiatives: cost, timing, benefits, strategies
and objectives supported, risk, earned
value, prioritization criteria and
recommendations
Complete the strategic initiative Data
Definition Table
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The team will prioritize needs based
on strategic importance and
performance, and create initiatives for
improvements
Each initiative will be linked to
strategic measurements so its
progress could be monitored
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Champion facilitate the development of strategic
initiatives linked to the strategic objectives on
the enterprise –wide strategy map
Plan for translating strategic initiatives into riskmanaged projects
Begin planning for a strategic management
office, to administer the scorecard system
Communicate how strategic initiatives will be
used in the organization
Incorporate project reporting into
communications and change management plans
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 Ranking
criteria
 Prioritized
initiatives
list of new strategic
 Ownership
and project schedules
and deliverable expected
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Perspectives
Comments
People,
Community
Members
and
The goal is to create an intricate
balance among the integral parts
of the organization.
Financial
This process benefits everyone
because it obligates
organizations to concentrate on
more than just profits.
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Perspectives
Comments
Employee
experience,
The additional area is Governance
and Credit Union Relations.
Member
Experience,
Each employee has a portion of
their incentive pay tied to the
balanced scorecard in this way all
employees are aware of and
understand the balanced scorecard.
Financial
performance
and
Business
Processes
The BSC allows us to measure and
track our success. It is an effective
and comprehensive forward-looking
tool
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OBJECTIVES
MEASURES
2011
2012
Financial
Performance
Financial Growth
Operating Income (Millions)
Reduced Dependency Other income growth as a % of ave.
on Interest based
Assets
income
$100.7 $102.6
0.647% 0.651%
Employee Experience
High Employee
Satisfaction
Employee engagement score as
reported by employee survey
80%
80%
Member experience
Servus members are
advocates
Member satisfaction score as report by 75%
member survey
79.1%
Business Processes
(BP)
BP improvement for
effect & Efficiency
Operating efficiency ratio
72.364 70.445
%
%
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Create alignment
Focus
Simplify planning and management
Communicate vision and strategy effectively
Maintain alignment
Make strategy actionable
Provides agility and flexibility
In other words the BSC helps everyone
maintain focus on the most important things
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Automation
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Cascade
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Evaluation
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 Thank
you for your attention and
contribution
 QUESTIONS
 DISCUSSION
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Collect quantitative data
Transform data into relevant information
Evaluate information system options and choose
one
Computerize performance data
Communicate
performance
decision makers visually
information
to
Use information to build knowledge
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Data characterize and collection issues
resolved
Data transformation into information
Software systems evaluated and one system
selected
Decision makers’ information needs defined
Reporting requirements defined
Performance information delivered to users
Knowledge management plan developed
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Communicate scorecard plans throughout the
organization
Align organizational components
Build aligned scorecards for teams and
individuals
Develop performance incentives, rewards and
recognition plans
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Leaders and manager show continued support of
the change effort during Cascading
Train cascading teams
Facilitate cascading workshops
Celebrating success
Plans for recognition and rewards
Showcase the usefulness of performance
information delivered to the right people at the
right time
Continue engaging employees’ hearts and minds
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Complete Framework for IRPS
Strategy
Objectives
Measures
Agency
Department
Team/
Individual
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Buy –in and commitment expanded
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Organization alignment continued
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Scorecards for business and support units, teams
and individual developed
Incentives/rewards program implemented
Necessary Organization structural issues
discussed
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Hold formal reviews of the results achieved
(by Strategic Themes and by Perspectives)
Analyze why organization results were what
they were
Review strategic and strategic objectives,
revise as necessary
Update performance measures to reflect
learning
Modify strategy, strategic Objective, strategy
maps performance measures and strategic
inactivates as necessary
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Plan for the evaluation process and how the
results will be distributed and used
Plan for process improvement
Review automation delivery and use of
performance information
Co-ordinate changes to Strategy
Review communication plans and
accomplishments
Plan for next cycles strategic planning
process
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Feedback on what is working and what
needs to be changed
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Formal plans for changes
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New strategic initiatives identified and
assigned project status
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Continue buy-in developed
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 Thank
you for your attention and
contribution
 QUESTIONS
 DISCUSSION
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Balanced Scorecard Professional Certificate The Balanced Scorecard Institute and George
Washington University 2010
MBA - Edinburgh Business School, Heriot
Watt University, Scotland
PPP Specialist - The Institute for PublicPrivate Partnerships (IP3)
Transport Plan and Management (Barbados)
for:
◦ ICC CWC World Cup 2007
◦ ICC Cricket T20 Championships 2010
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