1. Design, Development and Roll Out
Balanced Scorecard
Approach to
Design, Development and Roll Out

3. The Organization's Vision Financial Perspective Organization Learning
“If we succeed, how will we look to our shareholders?”
Profitability
Growth
Shareholder Value
Customer Perspective
“To achieve our vision, how must we look to our customers?”
Price
Service
Quality
Balanced Scorecard Users have been Executing their Strategies Reliably and Quickly
Success stories
CIGNA Property & Casualty
Chemical Bank
ATT Canada
many more examples
Applicable to non-for profit organizations
Are we not accountable for results?
Success stories: American Cancer Society, etc.
Others: World Bank, IFAD
Internal Perspective
“To satisfy our customers, what management processes must we excel at?”
Cycle Time
Productivity
Cost
Organization Learning
“To achieve our vision, how must our organization learn and improve?”
Market Innovation
Continuous Learning
Intellectual Assets

4. Differentiating activities
Desired state
Vision
Mission
Differentiating activities
/Strategy
Objectives
What must be done
well to implement
strategies
In each perspective
Goals
Measures
In each perspective
How strategic
success is
measured

5. Develop key business objectives that will help you to attain your strategy.
1. Drive rapid revenue growth
2. Manage operating costs and profitability
3. Achieve profitability
4. Effectively utilize assets
5. Manage risk
6. Improved Shareholder Value
Financial Perspective
1. Rapidly penetrate market segments
2 Sustain significant customer growth
3. Retain customers
4. Achieve high customer satisfaction
5. Provide extremely positive customer on-line experience
6. Achieve customer satisfaction
Customer Perspective
Internal Business Process Perspective
1. Develop provocative offers
2. Build brand awareness
3. Expand distribution
4. Drive incremental revenues
5. Offer leading high-speed Internet service
6. Provide compelling internet experience
7. Maintain technological leadership
Vision
and Strategy
1. Sustain employee satisfaction
2. Maintain employee productivity
3. Retain employees
4. Innovate operationally
5. Measure training quantities
6. Measure training effectiveness
7. Measure and evaluate innovations
Innovation & Learning Perspective
The diagram illustrates an example of a client’s organizational objectives. In the balanced scorecard development process, the organizational objectives should provide a balance across the four dimensions of performance.

6. Internal Business Process Perspective
The traditional balanced scorecard model translates an organization’s vision and strategy into a set of measures built around four perspectives: financial, customer, internal business processes, and innovation & learning.
The balanced scorecard is one of several tools for performance measurement and management.
The Kaplan and Norton model provides a more holistic approach by supplementing the traditional financial measures with three additional perspectives: customer, internal business process, innovation and learning:
Financial Perspective - Is the company creating value for its shareholders?
Customer Perspective - How is the company performing from the perspective of those who purchase the company’s products or services?
Internal Business Process - How is the company managing its internal business processes to meet its client’s expectations? Is throughput improving? Other processes include fulfillment, customer retention, and financial planning.
Innovation & Learning Perspective - Is the company improving its ability to innovate, improve, and learn?
It incorporates both leading and lagging indicators.
The emphasis is on balance across multiple dimensions of performance; ensuring that good performance in one area is not offset by poor performance elsewhere.
The strategy drives the choice of performance measures. A failure to meet targets could be because the strategy is wrong
Financial
Perspective
How do we look to shareholders?
Customer Perspective
How do customers see us?
Internal Business Process Perspective
What must we excel at?
Vision
and
Strategy
Innovation & Learning Perspective
Can we continue to improve our employees’ skills and create value for our clients?
Robert S. Kaplan and David P. Norton have developed what is considered to be the standard Balanced Scorecard template
Source: Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review (January-February 1996)

7. What is a Balanced Scorecard?
A balanced scorecard is a strategic measurement and management system that can motivate breakthrough performance.
A Balanced Scorecard...
Measures the progress of an organization toward its strategic goals by translating their vision and objectives into tactics and measures across a balanced set of perspectives
Captures the expectations of customers and measures the company’s ability to meet them
Translates Strategy, Mission and Vision into tangible measures for use by decision makers through to line workers
Is the culmination of a sophisticated data gathering and analysis process and system
Can and will drive the process of change, so it must be right!
Components of the Balanced Scorecard
Perspectives: Four top-down perspectives on enterprise performance (Financial, Internal Business Process, Innovation & Learning, Customer)
Objectives: What the company needs to do to accomplish its strategy; one guideline is to have up to sixteen measurable objectives.
Metrics: Actionable and tangible measurements which support achieving objectives; this is what makes it real.
Targets: Performance level expectations set against the strategic plan. For each metric, set a goal or plan so progress against the objective can be evaluated.
To succeed financially, how should we appear to our shareholders?
Financial Perspective
Objectives
Targets
Measures
To achieve our strategy, how should we appear to our customers?
Customer Perspective
Objectives
Targets
Measures
To satisfy our shareholders and customers, what business processes must we excel at?
Objectives
Measures
Internal Business Process Perspective
Targets
To achieve our strategy, how will we sustain our ability to change and improve?
Innovation & Learning Perspective
Objectives
Targets
Measures
Source: Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review (January-February 1996)

8. • Strategic Theme: Operating Efficiency Objectives Measurement
% Ground crew
trained
stockholders
Objectives
Measurement
Market Value
Seat Revenue
Plane Lease
Cost
FAA On Time
Arrival Rating
Customer
Ranking (Market
Survey)
On Ground Time On -
Time
Departure
Strategic Theme:
Operating Efficiency
Initiative
Cycle time
optimization
program
ESOP
Ground crew
training
Quality
management
loyalty
Target
30% CAGR
20% CAGR
5% CAGR #1
30 Minutes
90% yr % % %
Profitability
Financial
Learning
More
Customers
Ground Crew
Alignment
Lowest
Prices
Fewer Planes
Internal
Fast Ground
Turnaround
Flight
Is on Time
Fewer planes
Flight is on
time
Lowest prices
Fast ground
turnaround
alignment

9. Employee Satisfaction
Identify Linkages and Cause & Effect Relationships
Every measure on the balanced scorecard should be an element in a chain of cause and effect relationships that will achieve the strategic objectives.
An example of a cause and effect relationship can be outlined as follows:
IF we improve Leadership Capability AND give employees the Skills and Training they need to perform their jobs, THEN we will improve Employee Satisfaction & Motivation
Consequently, IF we improve Employee Satisfaction & Motivation, THEN Productivity will increase since Employee Satisfaction & Motivation is a driver of Productivity
IF we increase Productivity, THEN Cost will Decrease which will ultimately result in an Increased Return on Investment
Reduce IS Cost/
% Sales
Increased Return on Investment
Meet/ Exceed Targets
Financial Perspective
Increase Sales
Increased Margin
Cost Decrease
Customer
Perspective
Satisfied End- Users/ Customers
Satisfied Clients
Progress Towards
CMM Level 2
Process Maturity/
Assessment
Internal Business Process
Perspective
Improved
Cycle Time
Increased
Productivity
Reduced
Rework
Employee Satisfaction
& Motivation
Innovation and Learning Perspective
Tool Usage
Skills and Training
SPR Capability
Leadership Capability
An example of a cause and effect linkages between measures. The goal here is to ensure that all measures are consistent, coherent, and related to each other. This hypothesis can be tested upon implementation.

10. VALUE DELIVERY AND COST MANAGEMENT PEOPLE AND PERFORMANCE
The following inputs need to be defined in the process of developing a Balanced Scorecard.
Business Strategy
Set a bold and aggressive strategy for your organization
Use your measures to track progress towards your strategy
Evaluate your strategy by looking at your balanced set of measures
Measures should depict a consistent trend if the strategy is correct
Business Objectives
Business objectives are tangible goals set to meet the corporate strategy
Business objectives determine the key measures and metrics
This helps to ensure that each metric selected has a valid purpose
Measures & Metrics
All measures and metrics used to create the balanced scorecard must be tied to the objectives
Good metrics will measure progress towards objectives
To get a balanced set of measures you need metrics from each of the four perspectives
VALUE DELIVERY AND COST MANAGEMENT
CUSTOMER SATISFACTION RATINGS FOR CAPABILITY
BEHAVIOURS AND VALUES
COMPLIANCE
TCS
Tactical
Plans
Pharmas
Comms
General
Others
Rating
EFFICIENCY AND EFFECTIVENESS
Process gains
% decrease P1 P2 P3 P4
- Time
- Cost
PEOPLE AND PERFORMANCE
PERFORMANCE MANAGEMENT RATINGS
PAG
HE/OR MW
CEx
MM/PV %
MInfo
- People with Personal Performance Targets
- People with Development
objectives
SUPPLY OF SKILLS TO PROJECTS
TO TIME
QUALITY
HoC INTERVENTIONS
CORE AND ROLE SPECIFIC COMPETENCIES RO
CFI
SDO
Average of Skills Managers
Head of Capability
Core Competencies ST GC SI DO
Eff
Role Specific Competencies
COMPLIANCE GENERALLY
non-compliance
No incidences of
Incidences of Serious non-compliance
Core*
Financial
* - major legal issue relating to exhibition piece
SAFETY, HEALTH AND ENVIRONMENT
Staff Trained
Staff Scoring Level 3
on awareness
of Capability Staff
Percentage
Business Objectives
Measures and Metrics
Promotional Affairs Managers add significant value to the effectiveness of claim statements
Mean satisfaction rating
Business Strategy
Evaluation of quality of Promotional Guides
Satisfaction rating from individuals’ input to general promotional activities
Promotional Affairs Managers demonstrate appropriate risk management in the optimization of promotional messages from available data
Lead the industry in the optimization of promotional claims
Interpretation of # complaints received/ successfully defended/business significance of outcome
Interpretation of # complaints made/ successfully concluded/business significance of outcome
Complaints are effectively managed in both directions to maintain competitive advantage
The above diagram is an example that shows the business strategy, objectives, measures and metrics and the final scorecard developed for a Company

11. Gather measures, create the balanced scorecard, and use it to make decisions. Incorporate a continuous improvement philosophy in the process.
A successful balanced scorecard implementation will enable employees at all levels of the organization to understand what they can do to help the organization meet its strategic objectives.
Once implemented, the balanced scorecard allows the organization to test linkages and correlations between the various measures and consequently use this information to manage the organization.
A successful balanced scorecard implementation takes into account :
Change management principles and issues
Effective communication throughout the organization
Implementing and utilizing the proper technology to gather and produce the measures
Implications of operating in the new economy
The balanced scorecard process also needs to incorporate the philosophy of continuous improvement. This will help ensure that measures are always correct, timely, and relevant.
Some examples of continuous improvement process activities can include revising measures periodically, ensuring there is a timely feedback, and that there is an effective feedback mechanism in place.
The final outcome of the balanced scorecard development process is a high level and summarized view of the firm’s performance measurements. The above example of a balanced scorecard shows that balanced scorecards can be as simple as management chooses them to be