Transcript Best Practice Implementation: CSFs & Lesson Learned Balanced Scorecard Conference Nikko Hotel, Kuala Lumpur 13-14 July 2004 Presenter: Ungku Harun Al’Rashid Ahmad Vice President, Corporate Services Group and Managing.

Best Practice Implementation:
CSFs & Lesson Learned
Balanced Scorecard Conference
Nikko Hotel, Kuala Lumpur
13-14 July 2004
Presenter:
Ungku Harun Al’Rashid Ahmad
Vice President, Corporate Services Group
and
Managing Director, Knowledge Worker Exchange Sdn Bhd
MULTIMEDIA DEVELOPMENT CORPORATION SDN BHD
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WHAT MAKES THE
IMPLEMENTATION OF THE BALANCED SCORECARD IN THE
ORGANISATION SUCCESSFUL??
IS IT THE DESIGN & IMPLEMENTATION ?
IS IT THE PEOPLE ?
Or,
IS IT THE NATURE/CULTURE OF THE ORGANISATION
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AGENDA

Balanced Scorecard (BSC)

BSC Guiding Principles

Critical Success Factors While Implementing Scorecards

MDC BSC Lesson Learned – Phase (I) : Planning & Design

MDC BSC Lesson Learned – Phase (II) : Implementation & Carry Through

Summary
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Premise Behind
Balanced Scorecard
The Premise behind the Balanced Scorecard is that measurement
motivates behaviour
The Premise
Measurement Communicates Values,
Priorities And Direction
The Conclusion
Measurement Must Be Linked To Strategy
Strategy
Balanced
Scorecard
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BSC Implementation
Barriers
The PEOPLE Barrier
The VISION Barrier
Personal goals, knowledge building,
and competencies are not linked to
strategy implementation
Strategy is not understood by those
who must implement it…and not
translated into objectives
Strategy
The OPERATIONAL Barrier
The MANAGEMENT Barrier
Key processes are not designed to
leverage the drivers of business
strategy
Management systems are designed for
operational control and tied to budgets,
not strategy
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Principles of Strategy
Focused Organization
Components and timeline for making
strategy a Continual process
Mobilization Phase
 Target Setting
 Initiative
Rationalization
Migration Phase
 Link Strategy &
Budgeting
 Strategic Initiative
Mgt.
 Governance
Process Design
3-4 months
2-3 years
Strategic Management
Phase
 Strategy update
 Scorecard
update
 Updates to
planning and
budgeting
 Link strategy to
goals and
Incentives
 Link Strategy to
Performance
reviews
Steady State
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AGENDA

Balanced Scorecard (BSC)

BSC Guiding Principles

Critical Success Factors While Implementing Scorecards

MDC BSC Lesson Learned – Phase (I) : Planning & Design

MDC BSC Lesson Learned – Phase (II) : Implementation & Carry Through

Summary
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Guiding Principles
While Scorecarding
• WHAT GETS MEASURED GETS DONE
• People will do what they are measured on and rewarded to
• People must not be held responsible for what is not measured & reported
• KEEP IT SIMPLE
• Need to be simple and easy to understand & communicate
• Information should be collected honestly
• MEASURES MUST BE MEANINGFUL
• To the people who use them
• Related to business objective & success factors
• Objective & quantifiable
• People must be able to visualise and act on it
• MEASURES MUST BE CONTROLLABLE
• People being measured must be able to control their outcome
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AGENDA

Balanced Scorecard (BSC)

BSC Guiding Principles

Critical Success Factors While Implementing Scorecards

MDC BSC Lesson Learned – Phase (I) : Planning & Design

MDC BSC Lesson Learned – Phase (II) : Implementation & Carry Through

Summary
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CSF – Implementing
Scorecard
• Must Be Driven from Top of the Organisation
• Effective Communication Throughout the Project
• Require Change of Behaviours
• Linking Rewards to Performance Measures
• Design & Implement Change
Management Programmes
• Continuously Managing the Change
• Empower People to Change
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AGENDA

Balanced Scorecard (BSC)

BSC Guiding Principles

Critical Success Factors While Implementing Scorecards

MDC BSC Lesson Learned – Phase (I) : Planning & Design

MDC BSC Lesson Learned – Phase (II) : Implementation & Carry Through

Summary
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BSC Implementation:
Lesson Learned (I)
(1)
Business Planning
Process
(2)
Non Existence of
Strategy Paper / Doc.
Phase I :
(3)
People are Scared to
Be Measured
Major Challenges During
Planning & Design
(4)
Wrong Scorecard Team
Or Dept. Champions
(5)
Too Many Measures
Identified
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BSC Implementation:
Lesson Learned
(1)
Business Planning
Process
(2)
Non Existence of
Strategy Paper / Doc.
(3)
People are Scared to
Be Measured
(4)
Wrong Scorecard Team
Or Dept. Champions
(5)
Too Many Measures
Identified
• Business planning usually underdeveloped,
with no owners and takes a long time
• There is no strategic planning unit /
person responsible for the strategy
development
• Too many people involved in developing
the strategy thus resulting in too many
versions of the strategy documents
• Problem with strategy implementation
and carry through
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BSC Implementation:
Lesson Learned
(1)
Business Planning
Process
(2)
Non Existence of
Strategy Paper / Doc.
(3)
People are Scared to
Be Measured
(4)
Wrong Scorecard Team
Or Dept. Champions
(5)
Too Many Measures
Identified
• Most of the strategy is not stretchable
enough – confusion on the terms i.e.
programmes, objectives & strategy.
• Less focus on customers and financial.
• Too many initiatives identified.
Objectively should focus on key areas /
programmes – about 6 – 8.
• Do we have a strategy ??
• Lack of historical data that can be used
as a benchmark
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BSC Implementation:
Lesson Learned
(1)
Business Planning
Process
(2)
Non Existence of
Strategy Paper / Doc.
(3)
People are Scared to
Be Measured
(4)
Wrong Scorecard Team
Or Dept. Champions
(5)
Too Many Measures
Identified
• Individual performance review is not
linked to the organisation’s performance
• Scorecard will clearly define the roles and
responsibility for each employee
• Measures often scares the employee
instead of motivating them to succeed
• Why bother ?? More information = more
work – furthermore, it’s not linked to
monetary returns
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BSC Implementation:
Lesson Learned
(1)
Business Planning
Process
(2)
Non Existence of
Strategy Paper / Doc.
(3)
People are Scared to
Be Measured
(4)
Wrong Scorecard Team
Or Dept. Champions
(5)
Too Many Measures
Identified
• Should have 150% support from CEO and
top management before implementing
BSC
• Champions must be credible, senior and
have a good understanding of the
organisation / department
• Strong analytical and thinking skills
• BSC Team should comprise of different
level of people from different departments
and background
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BSC Implementation:
Lesson Learned
(1)
Business Planning
Process
(2)
Non Existence of
Strategy Paper / Doc.
(3)
People are Scared to
Be Measured
(4)
Wrong Scorecard Team
Or Dept. Champions
• Ideally 6 – 8 measures per employee
• 20 – 40 are chosen – for them more
is better!
• Confused with nitty gritty details – i.e.
number of meeting attended, hours spent
in the meeting
• Perfect measures don’t exist!
(5)
Too Many Measures
Identified
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AGENDA

Balanced Scorecard (BSC)

BSC Guiding Principles

Critical Success Factors While Implementing Scorecards

MDC BSC Lesson Learned – Phase (I) : Planning & Design

MDC BSC Lesson Learned – Phase (II) : Implementation & Carry Through

Summary
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BSC Implementation:
Lesson Learned (II)
(1)
CEO Commitment on
the Project
(2)
Mismatched Number
During Data Collation
Phase II :
(3)
Problems with Owner
and Communication
Major Challenges During
Implementation & Carry
Through
(4)
Develop a Structured
Education Campaign
(5)
Managing the Change
Process
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BSC Implementation:
Lesson Learned
(1)
CEO Commitment on
the Project
(2)
Mismatched Number
During Data Collation
(3)
Problems with Owner
and Communication
(4)
Develop a Structured
Education Campaign
(5)
Managing the Change
Process
• Need to show more buy-in and
appreciation towards this project
• Moved to ‘new toys’
• Doesn’t act or address the
Performance issues
• Take it as flavour of the week project;
and separate it from the strategy
discussion / performance monitoring
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BSC Implementation:
Lesson Learned
(1)
CEO Commitment on
the Project
(2)
Mismatched Number
during Data Collation
(3)
Problems with Owner
and Communication
(4)
Develop a Structured
Education Campaign
(5)
Managing the Change
Process
• Difficulty in aligning scorecard due to
different budget cycle / coding
• Budget initiatives doesn’t work parallel with
scorecard implementation
• Standard template required to ensure
monthly data / figures are consistent
throughout the whole organisation
• Data collation / performance tracking
is not a practice!
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BSC Implementation:
Lesson Learned
(1)
CEO Commitment on
the Project
(2)
Mismatched Number
During Data Collation
(3)
Problems with Owner
and Communication
(4)
Develop a Structured
Education Campaign
(5)
Managing the Change
Process
• Scorecard team / champions are expected
to perform the job for the staff
• Owners don’t want to take
responsibility for KPIs and project
• Structured communication plan has to
be developed
• Continuous communication using
different mode of communication need
to be undertaken
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BSC Implementation:
Lesson Learned
(1)
CEO Commitment on
the Project
(2)
Mismatched Number
During Data Collation
(3)
Problems with Owner
and Communication
(4)
Develop a Structured
Education Campaign
• Clearly explain the terminology and
premises behind the Balanced Scorecard
• Address employee in a small group to
initiate discussion and feedback
• Use laymen terms while explaining and
provide them with the manual
• Education campaign must be continuous
(5)
Managing the Change
Process
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BSC Implementation:
Lesson Learned
(1)
CEO Commitment on
the Project
(2)
Mismatched Number
During Data Collation
(3)
Problems with Owner
and Communication
(4)
Develop a Structured
Education Campaign
(5)
Managing the Change
Process
• Address the how-to
• Inability of the staff to get out of their norm
make it hard for change
• Confused because there are too many
steps / forms to be filled up
• You might need to pamper your staff in
order to ensure successful change
process – i.e. one-on-one discussion
• Stress on Strategy Focused Organisation
- the employees role
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AGENDA

Balanced Scorecard (BSC)

BSC Guiding Principles

Critical Success Factors While Implementing Scorecards

MDC BSC Lesson Learned – Phase (I) : Planning & Design

MDC BSC Lesson Learned – Phase (II) : Implementation & Carry Through

Summary
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SUMMARY
THE SUCCESS OF THE BALANCED SCORECARD
IMPLEMENTATION DEPENDS ON:
1.
The Strategic Planning Process
2.
The Support and Buy-in from the CEO / Senior Management
3.
The BSC Project Team / Champions in Managing the Project
4.
The People – To Change Their Attitude, Internalise and Deliver the Targets
5.
The Communication Plan – Effectiveness & Structure
According to Jim Collins in his book “Good to Great” – To make a breakthrough
from a flywheel, all that matters is the culture of discipline Disciplined people with disciplined thought executing disciplined action, will
turn a company from GOOD to GREAT …
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Thank You
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