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Leadership Perspectives Balanced Score Card Balanced Score Card The first stage in business transformation is to build an architecture for the change program, complete with objectives, measures and a management process including executive accountabilities for the various initiatives launched. The Balanced Scorecard is the conceptual structure Leadership Perspectives uses to build this architecture for change. The Balanced Scorecard Drives Rapid Strategy Implementation 1 Translate the Strategy Into Operational Terms 2 Align the Organization to the Strategy 5 Executive Team Alignment Strategy Map Balanced Scorecards Make Strategy a Continual Process Corporate Role Business Unit Synergies Support Unit Synergies Governance Process Strategic Management Analytics & Information Systems STRATEGY 4 3 Prioritize initiatives and Align Resources Strategic initiatives are clearly identified Investments are rationalized by the strategy Link Budgets and Strategy Make Strategy Everyone’s Job Strategic Awareness Personal Scorecard Balanced Paychecks / Link to Compensation The Balanced Scorecard Provides a Framework to Translate the Vision and Strategy Into Operational Terms The Vision Measurement is the language that gives clarity to vague concepts. Measurement is used to communicate, not to control. Building the scorecard develops consensus and teamwork throughout the organization. Financial Perspective "If we succeed, Profitability how will we look to our Growth shareholders?” Shareholder Value "To achieve my vision, how must we look to my customers?” Customer Perspective Cycle Time Quality Service Price/Cost "To satisfy my customers, what business processes must we excel at?” Internal Perspective Cycle Time Quality Productivity " To achieve our vision, how must our organization learn and improve?” Organization Learning Market Innovation Continuous Learning Intellectual Assets We Use the Balanced Scorecard to Clarify Strategy and Translate it into Focused, Actionable Objectives Financial Perspective Return on Investment Revenue Strategy Productivity Strategy Sources of Growth Sources of Productivity Customer Perspective The Balanced Scorecard Is Based on an Understanding of the Cause and Effect Relationships on Which the Strategy Is Based Value Proposition Price Quality Time Function Image Relation Internal Process Perspective Pathways to Performance “Build the Brand” “Make the Sale” “Deliver the Product” “Service Exceptionally” Learning & Growth Perspective Staff Awareness + Goal Alignment + Staff Competencies + Technology Infrastructure The Balanced Scorecard Is Used to Tell the Story of Your Strategy The Revenue Growth Strategy The Productivity Strategy “Improve stability by broadening the sources of revenue from current customers” “Improve operating efficiency by shifting customers to more cost-effective channels of distribution” Improve Returns Financial Perspective Improve Operating Efficiency Broaden Revenue Mix Metro Bank Vision Increase Customer Confidence in Our Financial Advice “To be the best broad-based financial institution, a leader in our chosen markets” Increase Customer Satisfaction Through Superior Execution Customer Perspective Internal Perspective Understand Customer Segments Develop New Products Cross-Sell the Product Line Shift to Appropriate Channel Increase Employee Productivity Develop Strategic Skills Access to Strategic Information Minimize Problems Provide Rapid Response Learning Perspective Align Personal Goals This Begins With Developing the Key Strategic Themes or Pathways – These Form the Strategy Stairway Case Example: Odessa Computers Long-Term Strategic 5. Redesigning Our Customers’ Business 4. Solution Delivery 3. Sales Excellence 2. Service Excellence 1. Leverage Resources Near-Term Tactical For Each Pathway, We Develop a Cause and Effect Model Across the Four Perspectives of the Balanced Scorecard Case Example: Odessa Computers 5. Customer Partnering 4. Solution Delivery 3. Sales Excellence 2. Service Excellence 1. Leverage Resources 1. Financial 2. Customer 3. Internal 4. Learning/ Growth Build a Cause and Effect Model for Each Pathway: An Example Odessa Computers Pathway 3: Sales Excellence Financial Customer Process Shift Revenue Mix to Higher Margin Products/Services to Improve Margins Solve High Value Business Problems Qualify Opportunities Discover & Analyze Customer Needs Deploy Business Unit Offerings Put Right Sales Team Together Learning / Growth Increase Consultative Selling Skills A Strategy Map of Odessa Computers: The Sum of the Pathways PROFITABLE GROWTH Leverage Resources Financial Leverage People and Financial Assets to Achieve Organizational Productivity Customer Improve Customer Awareness Service Excellence Sales Excellence Grow Revenue Through Customer Retention Shift Revenue Mix to Higher Margin Products/Services to Improve Margins Easy to Do Business With Manage Inventory and Receivable Effectively Simplify Processes and Enhance Systems Grow Revenue Through Customer Extension/Expansion My Partner for Creating High Value Solutions Provide WorldClass Ongoing Support Effective Project Management Build Skills Redefine Customers Businesses Create Customer Competitive Advantage Create Centers of Solution Expertise Discover & Analyze Customer Needs Deploy Business Unit Offerings Partners/ Alliances Localize Business Unit Offerings Learning & Innovation Manage Resources Customer Partnering New Product Development/Service Opportunities Qualify Opportunities Perform Effective Delivery and Installation Internal Solve High Value Business Problems Solution Delivery Supply Knowledge Infrastructure (System and Tools) Create Customer Driven Marketing Insights Capture Product/Customer/ Industry Knowledge Create SuccessOriented Culture Shift Resources to High Potential Revenue Generating Roles Increase Leadership Skills Deploy Services Resources to Improve Productivity Share Best Practices Put Right Sales Team Together Increase Consultative Selling Skills Dynamic Deployment of Cross- Functional Resources Foster Sales/ Marketing Alignment Clarify and Communicate Roles & Responsibilities Attract, Retain, and Motivate Associates Just-in-Time Resource Deployment New Product Development Insights/ Raw Creativity From Strategy Map to Implementation: Targets and the Business Case Measures ACCELERATE PROFITABLE GROWTH Shift Revenue Mix to Higher Margin Products/Services F • We will contribute X% increase in GM – and $XXX in bottom line growth by 1998 • Gross Margin % • 1995 impact of $XX • 1996 impact of $XX • 1997 impact of $XX C • 1998 impact of $XX Solve High Value Business Problems Improve Customer Awareness] Qualify Opportunities I • % Opportunities Through Bid Review Where PS Risk Assessment Performed Discover and Analyze Customer Needs Deploy Business Unit Offerings • Total HV offering $ in the Funnel (Next 12 Months) • Opportunities by Key Marketing Programs - $/# • % Associates in Customer-Facing HV Positions L&G Manage Resources Build/Enhance Set of Skills/ Competencies Put Right Sales Team Together Increase Consultative Selling Skills Clear Roles & Accountabilities Attract, Retain, and Motivate Outstanding Associates • CSM Relationship Survey Overall Solutions Provided to you by Odessa • Associates Certified within Key Job Families • Leadership Index • Number of Associates with Objectives on File • Sales and Pre-Sales Open Position Days • Associate Turnover • Associate Satisfaction Survey - overall question From Strategy Map to Implementation: The Alignment of Initiatives and Resources Strategic Pathway Existing Initiatives Initiatives Financial Customer Internal Shift Revenue Mix to Higher Margin Products/Services to Improve Margins Solve High Value Business Problems Qualify Opportunities Discover and Analyze Customer Needs Learning Deploy Business Unit Offerings Put Right Sales Team Together Increase Consultative Selling Skills Description Sponsor Paper supplies Integration Integrate media products into our computer and self-service offerings Manufacturing Jim S. Price Realization-II (Outside Study): Localize Americas programs on a regional basis (e.g., The Sales Process, Marketing Programs for Canada, Latin America and US Area). Corporate Marketing Alice L. Lead with Service Bundles Increasing PS and CS service content and enable all 550 salespeople to sell services. Global Sales Connie C. High Availability Transaction Processing Developing horizontal offerings across industries. Corporate Marketing Bruce G. Global Realization Process (GRP) Define and deploy the GRP in the Americas Region Distribution Eric S. Sustain/Execute The Sales Process(TSP) Lg Bus. Sales Barbara R. Certification Program Expand to Professional Services and other sales industries. HR - Allen V. Consultative Selling Building consultative selling skills within our sales and services organizations. Training - Bryan D. Clarify and Communicate Roles & Responsibilities Attract, Retain, and Motivate Associates Aligning the Managing Process and Balanced Scorecard Architecture Balanced Scorecard Architecture Managing Process PROFITABLE GROWTH Leverage Resources Leverage People and Financial Assets to Achieve Organizational Productivity Fina ncia l Customer Improv e Customer Awareness Service Excellence Sales Excellence Grow Revenue Through Customer Retention Shift Revenue Mix to Higher Margin Products/Services to Improve Margins Easy to Do Business With Manage Inventory and Receivables Effectively Redefine Customers Businesses Create Customer Competitive Advantage Strategic Pathways New Product Development/Service Opportunities Qualify Opportunities Create Centers of Expertise Provide WorldClass Ongoing Support Simplify Processes and Enhance Systems Our Vision Differentiate Odessa From Competition Solve High Value Business Problems Perform Effective Delivery and Installation Interna l Solution Selling Grow Revenue Through Customer Extension/Expansion Supply Knowledge Infrastructure (System and Tools) Discover and Analyze Customer Needs Effective Project Management Deploy Business Unit Offerings Create Customer Driven Marketing Insights Localize Business Unit Offerings Capture Product/Customer/ Industry Knowledge Lea rni ng & Innova tion Create SuccessOriented Culture Manage Resources Shift Resources to High Potential Revenue Generating Roles Build Skills Deploy Services Resources to Improve Productivity Increase Leadership Skills Dynamic Deployment of Cross- Functional Resources Put Right Sales Team Together Share Best Practices Just-in-Time Resource Deployment New Product Development Insights/ Raw Creativity Foster Sales/ Marketing Alignment Increase Consultative Selling Skills • Clear roles and responsibilities in managing initiatives Clarify and Communicate Roles & Responsibilities Attract, Retain, and Motiv ate Associates 1/9/97 97BSC NCR Confidential & Proprie tary questions index delighted - image CSM survey - % Awareness Customer Improve from Competition Differentiate Manage Resources Skills/Competencies of Build/Enhance Set CVA ratio to you by question overall solutions provided CSM survey - % delighted repurchase question CSM survey - % delighted question easy to do business with CSM survey - % delighted Business Problems Solve High-Value With Easy to do Business Objectives Strategic CUSTOMER Measures Accountabilities Clarify Roles & Associates Outstanding Motivate Attract, Retain & YTD Current Target 1997 YTD Prior YE 1996 Objectives Measures Strategic LEARNING & INNOVATION Offerings Localize & Deploy Account Needs Discover & Analyze Improve Margins Retention through Customer Grow Revenue Receivable (Internal) Manage Inventory & -------------------------Productivity Organization Achieve New account $ Revenue $ top 100 accounts Services rev. % of total rev. Server order % server plan Discount index Gross margin % - % of total - total $ Existing customer revenue Ongoing Support Provide World Class Management Effective Project on time & budget % PS projects closing Systems and Enhance Simplify Processes Analysis (LOCA) Left Over Calls billable time % PS utilization % avail time to sell Delivery/Installation Perform Effective Asset turnover Revenue $/associates Order $/salesperson Expenses % total revenue Objectives Strategic FINANCIAL Measures YTD Current YTD Prior Target 1997 YE 1996 YTD Current Target 1997 YTD Prior Objectives Strategic INTERNAL Measures Context For YE 1996 Targets and Measures Programs - $/numbers Opport . by key Mktg. “ARI” w/ i plan % of prod./services Total funnel $ PS risk assess. done % opport. w/ required selling cycle time close rate to cash” cycle time average # days “order met % customer interval % system availability remotely % incidents resolved 1st visit resolution % Opportunities Qualify Expansion/Extension through Customer Grow Revenue achieving quota % of sales assoc. positions customer facing % employees in index questions ADS - leadership w/ i key job families % of assoc. certified ADS question objectives on file % of associates with question ADS overall index Associate turnover position days Sales & PS open • Executive Meetings YTD Current Target 1997 YTD Prior YE 1996 (results through MONTH/1997) BALANCED SCORECARD SUMMARY AMERICAS REGION improve? ” change and our ability to will we sustain our vision, how “ To achieve Objectives Measures Targets Initiatives Le arnin g and Growth Attract, Retain, and Motivate Associates Clarify and Communicate Roles & Responsibilities Skills Build Resources Manage Supporting Initiatives and Implementation Plan Selling Skills Consultative Increase Team Together Put Right Sales Objective Setting Consultative Selling: Building consultative selling skills within our sales and services organizations. Certification Program: Expand to Professional Services and other sales industries. (Sponsor 5) customers? ” appear to our should we our vision, how “ To achieve (Sponsor 5) Sustain/Execute The Sales Process Strategy Strategy Visionand and Vision Objectives Measures Targets Initiatives we excel at? ” processes must what business and customers, share-holders “To satisfy our Objectives Measures C ustom e r Targets Initiatives In te rnal Bu sin e ss Proce ss L&I Unit Offerings Deploy Business Customer Needs Analyze Discover and I Global Realization Process (GRP): Define and deploy the GRP in the Americas Region. (Sponsor 4) share-holders? ” appear to our how should we financially, “ To succeed Sustain/Execute The Sales Process(TSP) Customer Awareness Program C F Awareness] Customer Improve Business Problems Solve High Value Improve Margins Products/Services to Higher Margin Shift Revenue Mix to Profitable Growth Objectives Measures Targets Initiatives Fi nan cial Opportunities Qualify High Availability Transaction Processing: Developing horizontal offerings across industries. (Sponsor 3) Lead with Service Bundles: Increasing PS and CS service content and enable all 550 salespeople to sell services. (Cronin) Programs for Canada, Latin America and US Area). (Sponsor 2) Price Realization-II (Outside Study): Localize Americas programs on a regional basis (e.g., The Sales Process, Marketing Paper supplies Integration: Integrate media products into our computer and self-service offerings. (Sponsor 1) Initiatives • Balanced Scorecard provides a key communication tool to the entire organization