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Transcript of 1 Management Best Practices 2003 Building a Strategy Focus – Paul R. Niven September 30, 2003.
1
Management Best Practices 2003
Building a Strategy Focus – Paul R. Niven
September 30, 2003
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© 2003 Primerus Consulting, Inc. All Rights Reserved
Agenda
• Introduction to Primerus Consulting
• Performance Measurement and Balanced Scorecard Background
• Balanced Scorecard Fundamentals
• Public Sector Balanced Scorecard Model
• The Four Perspectives
• Strategy Maps & Terminology
• Who is Working with Performance Management?
• Performance Management Essentials
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© 2003 Primerus Consulting, Inc. All Rights Reserved
Introduction to Primerus Consulting
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© 2003 Primerus Consulting, Inc. All Rights Reserved
Paul Niven and the Balanced Scorecard
• BSC Practitioner first, then consultant, and writer
• Led a BSC project with large Canadian firm in mid-90s
• Have consulted with KPMG (Chicago) and CSC (San Diego)
• Formed Primerus Consulting in 2001
• Have written 2 books (contributed to a third), and many articles on the subject of Balanced Scorecard
• Speak at conferences and seminars around the world
• Have worked with clients in many different sectors:
• Fortune 1000
• Government (city and county)
• Nonprofit
Translated into 12 languages
Released June, 2003
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© 2003 Primerus Consulting, Inc. All Rights Reserved
Performance Measurement and Balanced Scorecard Background
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© 2003 Primerus Consulting, Inc. All Rights Reserved
The Changing Landscape of Performance Management
• 80% of respondents reported making changes in their PM system during the last 3 years. For 33% the change was described as a “major overhaul” More than 50% of respondents indicated their company is currently changing its PM system. (From Strategic Finance Magazine)
• More than 50% of the Fortune 1000 have turned to the Balanced Scorecard. (Bain & Company study)
• In the public sector, close to 60% of respondents agree or strongly agree that using performance measures has increased efficiency. (GASB study)
The question is why???
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Factors Driving the Prominence of the BSC
Prominence of the Balanced
Scorecard
Business RisksBusiness Risks
Difficulty Executing Strategy
Difficulty Executing Strategy
Rise of Intangible
Assets
Rise of Intangible
Assets
Over-reliance on Financial Measures
Over-reliance on Financial Measures
Over-reliance on Financial Measures
Over-reliance on Financial Measures
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© 2003 Primerus Consulting, Inc. All Rights Reserved© 2002 Primerus Consulting, Inc. All Rights Reserved
“They (knowledge workers) now account for a full third of the American workforce, outnumbering factory workers two to one. In another twenty years they are likely to make up two-fifths of the workforces of all rich countries.”
-Peter F. Drucker, The Economist, November 2001
38%
62%
75%
1982 1992 Today
The increasing value of intangible assets in organizations
Our Economy is Changing
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• Intangible assets may not have a direct impact on financial results
• The value of intangibles is largely potential – it must be transformed
• Intangible assets require interdependence for success
Assessment based on assumptions
Tangible versus Intangible Assets
Tangible Assets Intangible Assets
Rigorously quantified Difficult to quantify
Part of the Balance Sheet Not tracked through Accounting
Investment produces known returns
Can be easily duplicated Cannot be bought or imitated
Depreciates with use Appreciates with purposeful use
Best managed with “scarcity” mentality Best managed with “abundance” mentality
Best leveraged through control Best leveraged through alignment
Sources: For top 3 bullets: based on research presented by David P. Norton at the BSC N.A. Summit, New Orleans, LA., Sept. 2000. Source for bottom chart: Brian Becker, Mark Huselid, and Dave Ulrich, “The HR Scorecard”
Intangible Assets are Different
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• Not consistent with today’s business realities
• Driving by rearview mirror
• Tend to reinforce functional silos
• May sacrifice long-term thinking
• Not relevant to many levels of the organization
The Alto
Financial Measures Don’t Tell the Whole Story
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The Risks are Greater than Ever
• Business
• Financial
• Reputation
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Only 10% of organizations execute their
strategy
Barriers to Strategy Execution
Only 5% of the workforce
understands the strategy
Vision Barrier
Only 25% of managers have
incentives linked to strategy
People Barrier
85% of executive teams spend less than one hour per month discussing
strategy
Management Barrier
60% of organizations don’t
link budgets to strategy
Resource Barrier
Chart adapted from material developed by Robert S. Kaplan and David P. Norton
The Strategy Story
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• Disclosure and reporting issues have never been hotter!
• In the public sector GASB is pushing for greater reporting of results
• Citizens are demanding accountability
© 2002 Primerus Consulting, Inc. All Rights Reserved
Performance Management is Critical in the Public Sector
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Clearly, A Change is Needed
Intangible Assets
Risks Strategy Financial Measures
Accountability
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Balanced Scorecard Fundamentals
Customer
Objectives"To achieve our vision, how should we appear to our customers?"
Measures Targets Initiatives
Internal Business ProcessObjectives"To satisfy our
shareholders and customers, what business processes must we excel at?"
Measures Targets Initiatives
Financial
Objectives"To succeed financially, how should we appear to our shareholders?"
Measures Targets Initiatives
Learning and GrowthObjectives"To achieve our
vision, how will we sustain our ability to change and improve?"
Measures Targets Initiatives
Visionand
Strategy
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Public Balanced Scorecard Model
Who do we define as our customer? How do we create
value for our customer?
How do we enable ourselves to grow and change, meeting
ongoing demands?
Strategy
Customer
Employee Learning & Growth
Mission
To satisfy customers while meeting budgetary constraints, at what
business processes must we excel?
Internal Process
How do we add value for customers while controlling
costs?
Financial
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Customer Perspective
Customer
Objectives"To achieve our vision, how should we appear to our customers?"
Measures Targets Initiatives
Internal Business ProcessObjectives"To satisfy our
shareholders and customers, what business processes must we excel at?"
Measures Targets Initiatives
Financial
Objectives"To succeed financially, how should we appear to our shareholders?"
Measures Targets Initiatives
Learning and GrowthObjectives"To achieve our
vision, how will we sustain our ability to change and improve?"
Measures Targets Initiatives
Visionand
Strategy
• Should answer two questions:
• Who are our customers?
• What is our value proposition in serving them?
• Operational Excellence
• Product Leadership
• Customer Intimacy
• What do Customers demand?
A City’s measures:• Reduce Crime: Reduce the homicide rate by 10% per 100,000 population during FY 2002-2003• Enhance Service Delivery: Achieve rating of “excellent” or “good” in service delivery by at least 75% of citizens in biennial survey
Customer
Financial
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Customer Value Propositions
Operational ExcellenceOperational ExcellenceInnovation/Product LeadershipInnovation/Product Leadership Customer IntimacyCustomer Intimacy
“Operationally excellent companies deliver a combination of quality, price, and ease of purchase that no one else can match”
CostcoMcDonaldsDell ComputerSouthwest Airlines
“A Product leadership company pushes its products into the realm of the unknown, the untried, or the highly desirable”
SonyJ&JIntel
“A Customer Intimate company builds bonds with customers; it knows the people it sells to and the products and services they need”
NordstromIBM (1960-70)Mobil
Best SolutionMost Innovative Product Best Total Cost
According to Treacy & Wiersema (1), organizations can select one of three customer-focused strategies,
(1) Treacy & Wiersema, The Discipline of Market Leaders, Addison Wesley, 1995
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Chrysler’s Customer Value Proposition
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Internal Process Perspective
Customer
Objectives"To achieve our vision, how should we appear to our customers?"
Measures Targets Initiatives
Internal Business ProcessObjectives"To satisfy our
shareholders and customers, what business processes must we excel at?"
Measures Targets Initiatives
Financial
Objectives"To succeed financially, how should we appear to our shareholders?"
Measures Targets Initiatives
Learning and GrowthObjectives"To achieve our
vision, how will we sustain our ability to change and improve?"
Measures Targets Initiatives
Visionand
Strategy
• Key processes we must excel at to drive value for customers
• Also focus on customer value proposition
• Normally contains the largest number of measures
A City’s measures:• Promote community-based problem solving: Implement a cross-collaboration plan among key businesses that allows for more effective sharing of resources and shared authority in areas such as code enforcement• Increase infrastructure capacity: Dollar amount of capital plan improvements constructed
Customer
Financial
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Internal Process Perspective
InnovationProcess
• Marketing• R&D• JV/Partnerships
Customer Management
Process
• Sales• Service• Relationships
OperationsProcess
• Inbound Logistics• Manufacturing• Outbound Logistics• Supplier Relations
Social & Environmental
• Health• Safety• Environment• Social
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Financial Perspective
Customer
Objectives"To achieve our vision, how should we appear to our customers?"
Measures Targets Initiatives
Internal Business ProcessObjectives"To satisfy our
shareholders and customers, what business processes must we excel at?"
Measures Targets Initiatives
Financial
Objectives"To succeed financially, how should we appear to our shareholders?"
Measures Targets Initiatives
Learning and GrowthObjectives"To achieve our
vision, how will we sustain our ability to change and improve?"
Measures Targets Initiatives
Visionand
Strategy
• No BSC is complete without financial measures
• Represent enablers or constraints
• Must balance effectiveness with efficiency
• Normally lag measures of performance
A City’s measures:• Maintain AAA Credit rating: Maintain AAA credit rating• Grow the tax base: Value of issued building permits
Customer
Financial
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Employee Learning & Growth Perspective
Customer
Objectives"To achieve our vision, how should we appear to our customers?"
Measures Targets Initiatives
Internal Business ProcessObjectives"To satisfy our
shareholders and customers, what business processes must we excel at?"
Measures Targets Initiatives
Financial
Objectives"To succeed financially, how should we appear to our shareholders?"
Measures Targets Initiatives
Learning and GrowthObjectives"To achieve our
vision, how will we sustain our ability to change and improve?"
Measures Targets Initiatives
Visionand
Strategy
• Often overlooked
• Represent the “enablers” of the other three perspectives
• “Soft” measures can drive “hard” results
A City’s measures:• Enhance information management: Implement Information Technology strategic plan to facilitate improvements in service delivery, quality, timeliness, employee productivity and overall organizational effectiveness
Customer
Financial
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Employee Learning & Growth Perspective
Human Capital – Understand what competencies we need,
what we have, and how to close the gap
Information Capital – Understand the information
applications and infrastructure we need to support the
strategy
Climate for Action:
Culture – Build an organization that internalizes the shared vision, strategy, and values required to execute
Goal Alignment – Encourage personal contribution through goal and incentive alignment
Knowledge Sharing/Teamwork – Share knowledge and experience through teamwork
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Strategy Maps & Terminology
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Cause & Effect is Key to the BSC
© 2002 Primerus Consulting, Inc. All Rights Reserved
Knowledge, Skills, Systems, and ToolsKnowledge, Skills, Systems, and Tools
Financial Financial ResultsResults
To Build the Strategic Capabilities..
Needed to Deliver UniqueSets of Benefits to Customers...
To Drive Financial Success...
And Realize the Vision
Equip our People...
Internal Internal CapabilitiesCapabilities
Customer Benefits
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Halifax
Truro
Sydney
Antigonish
Maps Get Us From “A” to “B”
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Formation of a Strategy
Landmark 1
Successfully Executed Strategy
Landmark 2
Strategy is Also a New Destination
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A Good Balanced Scorecard Tells the Story of Your Strategy on a Strategy Map
The Revenue Growth Strategy“Improve stability by broadening the sources of revenue from current customers”
The Productivity Strategy“Improve operating efficiency by shifting customers to more cost-effective channels of distribution”
Improve Returns
Improve Operating Efficiency
Broaden Revenue
Mix
Increase Customer
Confidence in Our Financial
Advice
IncreaseCustomer
Satisfaction Through Superior
Execution
IncreaseEmployee
Productivity
Access to Strategic
Information
Develop Strategic
Skills
Align Personal
Goals
FinancialPerspective
CustomerPerspective
InternalPerspective
Learning Perspective
Cross-Sell the Product
Line
Shift to Appropriate
Channel
Provide Rapid
Response
Develop New
Products
Minimize Problems
Understand Customer Segments
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County of San Diego, CA., Animal Control Strategy Map
Financial
Customers
InternalProcesses
Learning andGrowth
Sustain citycontract
resources
Sustain citycontract
resources
EnhancerevenuesEnhancerevenues
Promote employee
development
Promote employee
development
Ac
hie
ve
Mis
sio
n
Increase employee
satisfaction
Increase employee
satisfaction
Increase placement of sheltered animalsIncrease placement of sheltered animals
Reduceeuthanasia
Reduceeuthanasia
Enhance customer satisfaction
Enhance customer satisfaction
Reducewait timesReduce
wait times
EnhanceAnimal handling
& behavior evaluation
EnhanceAnimal handling
& behavior evaluation
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Government I.S. Strategy Map
Customer Focus Know Our Business Keep Pace With Technology Work Smarter Always On
Customer
Internal Processes
Employee Learning and Growth
Financial
Increase customer satisfaction
Proactively provide effective and innovative
solutions
Keep systems up and
running
Deliver efficiently through
consensus
Improve and simplify the
customer experience
Participate knowledgably and contribute
to meeting needs
Explore alternatives and anticipate use of new technology
Build it right, keep it healthy
Understand and anticipate
customer business needs
Get more bang for our buck!
Share information, listen more, and
respond
Proof of concept
Get off the 3rd floor
Foster an environment that encourages,
recognizes, and rewards contribution
Create accountability and
ownershipBe consistent
Hire, develop and retain superior performers
Ensure teamwork that fosters mutual
respect, support, and learning
Encourage customers to keep
pace with technology
Continuously review and
simplify internal practices and procedures
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Source: Balanced Scorecard Report
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A Final Thought on Strategy Maps
The single most important indicator of BSC success is the development of a Strategy Map
– Finding from BSC User Group Survey 2002
The Revenue Growth Strategy
“Improve stability by broadening the sources of revenue from current customers”
The Productivity Strategy
“Improve operating efficiency by shifting customers to more cost-effective channels of distribution”
Improve Returns
Improve Operating Efficiency
Broaden Revenue
Mix
Increase Customer
Confidence in Our Financial
Advice
IncreaseCustomer
Satisfaction Through Superior
Execution
IncreaseEmployee
Productivity
Access to Strategic
Information
Develop Strategic
Skills
Align Personal
Goals
FinancialPerspective
CustomerPerspective
InternalPerspective
Learning Perspective
Cross-Sell the Product
Line
Shift to Appropriate
Channel
Provide Rapid
Response
Develop New
Products
Minimize Problems
Understand Customer Segments
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© 2003 Primerus Consulting, Inc. All Rights Reserved
The Importance of Terminology
“The first task of any theory is to clarify terms and concepts that are confused…Only after agreement has
been reached regarding terms and concepts can we hope to consider the issues easily and clearly, and expect
others to share the same viewpoint…”
-Carl von Clausewitz, “On War,” 1832
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BSC Terminology & Theme Example
Objectives
• Maintain fast ground turnaround
Statement of what strategy must achieve
and what’s critical to its
success
Target
• 30 Minutes• 90%
The level of performance
or rate of improvement
needed
• Cycle time optimization
Key action programs
required to achieve
objectives
InitiativeMeasurement
• On Ground Time• On-Time
Departure
How success in achieving the strategy
will be measured and
tracked
Strategy Map
ProfitabilityFinancial
Learning
Increase Revenue
Align ground crew
Provide Lowest prices
Lower Costs
Customer
Internal
Maintain fast ground turnaround
Strategy Map: Diagram of the cause-and-effect relationships between strategic objectives
Offer on time flight
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Some Terms You Should Consider
• Performance Measurement
• Performance Management
• Mission
• Vision
• Values
• Strategy
• Strategic Initiatives
• Outcomes
• Objectives
• Measures
• Balanced Scorecard
• Budgets
• Public Input
• Business Plan
• Lag and Lead
• Input and Output
How do these terms work together to comprise your Performance Management Framework?
Do you have a Glossary?
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Who is Doing Performance Measurement?
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Everybody’s Doing It!
Can you guess the country represented by this flag???
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Who is Doing it Well?
• Tying resource allocation to strategic plan and using performance measures resulted in better resource allocation, shift of resources towards strategic objectives and more efficient services
• Accountability in government improved, and the government does a good job of communicating with the public
• Quote: “Managing for results” is”
• Focused on accountability and results
• Major culture change
• Major change and alignment of management systems
• Long term commitment to learning
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The City of Charlotte
• 25th largest city in the U.S.
• 2nd largest financial center in the nation
• Population of 539,000
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The City of Charlotte
• Measuring performance since the 1970s
• Set goals at an annual retreat of the city council
• In 1990 Council agreed to identify strategic themes (focus areas)
• Those themes are still in use today
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Strategic Themes (Focus Areas)
Community SafetyProvide public safety services to ensure that citizens feel safe; support programs which work to solve the root cause of crime and drug problems, such as housing, jobs, etc.; and elicit the support of other organizations to reduce crime and the influence of drugs
City Within a CityProvide leadership and resources to make individuals and families self -reliant; and strengthen and revitalize deteriorated neighborhoods
TransportationAddress the City’s road and intersection improvement needs, develop a local and regionalmass transit system, and promote alternative methods of transportation such as walking and biking
Restructuring Government Manage for results by providing the best service at the lowest cost and meeting customerExpectations
Economic DevelopmentSupport formation, retention, and expansion of business and initiatives that provide qualityJobs
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Charlotte’s Balanced Scorecard
Smart Growth
City Council Focus Areas
Community Safety
City Within a CityRestructuring Government
TransportationEconomic
Development
Corporate Scorecard
Customer Customer
FinancialFinancial
Internal Internal
L & GL & G
Reduce Crime
Strengthen Neighborhoods
Increase perception of safety
Enhance Service Delivery
Maintain competitive
tax rate
Provide safe, convenient
transportation
Promote economic
opportunity
Maximize benefit/cost
Secure funding/service
partners
Grow the tax base
Maintain AAA rating
Promote community
based problem solving
Enhance customer service
Improve productivity
Increase infrastructure
capacity
Achieve positive
employee climate
Enhance information
management
Close skills gap
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Benefits of Using the BSC in Charlotte
• Focuses City Council’s agenda on important or strategic issues
• Measurement gives clarity to vague concepts such as strategic goals
• Develops consensus and teamwork
• Enhances employees’ understanding of organizational goals
• Communicates strategic results to citizens
“The Balanced Scorecard has helped me to communicate a strategic vision for the city to my constituents, the citizens, and to prospective businesses who are considering locating here. It helps the City Manager focus on things that will have the biggest impact on the city.”
-Charlotte Mayor Pat McCrory
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Performance Management Gets Results!
Measure of Success
Measurement-Managed Organizations
Non Measurement-Managed Organizations
Industry leader over the past 3 years
Three year return on investment (ROI)
Success in last major change effort
74% 44%
80% 45%
97% 55%
Measure of Success
Measurement-Managed Organizations
Non Measurement-Managed Organizations
Agreement on strategy
Communication of strategy
Cooperation and teamwork
90% 47%
60% 8%
85% 38%
Pe
rfo
rma
nc
eC
ult
ure
Sources: John H. Ingle & Wm. Schiemann, “Is Measurement Worth It” Management Review, March 1996
Morgan & Schiemann, “Measuring People & Performance: Closing the Gap” Quality Progress, January 1999
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Performance Management “Essentials”
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Essential One – Rationale for your System
Put the big rocks in first!
The beginning is the most important part of the work
-Plato, The Republic
• Why are you developing a PM system?
• PM alone will not transform the organization
• Clear objectives are critical for communication, education, and guiding PM evolution
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Rationale for Your PM System
Business crisis
Setting new targets
New leadership
Aligning improvement initiatives
Clarifying current strategy
Communication and education
New organizational strategy
Aligning employee
goals
FINANCIAL CUSTOMER INTERNALPROCESSES
EMPLOYEELEARNING
ANDGROWTH
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“To make initiatives work it took passionate, all-consuming commitment from the top…Every leadership action must demonstrate total commitment to the initiative.”
-Jack Welch, Jack: Straight From the Gut
• No initiative will survive without active executive sponsorship
• Executives hold key knowledge for PM success
• Everyone watches what the boss watches
• You can influence executive sponsorship
Essential Two – Executive Sponsorship
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Essential Three - A Solid Implementation Team
“A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.”
-Katzenbach & Smith, The Wisdom of Teams
• No single person or group holds all the information necessary to build the PM system
• Team members are crucial PM ambassadors
• Team members influence their own senior leaders
• Team participation is a wonderful learning opportunity
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“A recent review of our Balanced Scorecard Hall of Fame organizations demonstrates that virtually every successful CEO had a partner – a change agent who played the lead role in introducing the Balanced Scorecard program.”
- David P. Norton, The Balanced Scorecard Report (May-June, 2002)
Balanced
Scorecard
• Guides the PM process
• Provides thought leadership on PM
• Must be a skilled communicator
• Should be full-time role in the organization
Essential Four - A Strong PM Champion
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Essential Five - Training, Education, and Communication
Companies that don’t encourage
employee education of all kinds are dumb!
• The perceived simplicity of the BSC means
training is often overlooked – that is a mistake!
• BSC is simple, but not simplistic
• Training “levels the playing field” and encourages involvement
• Training leads to important questions
• Provide background information, your objectives, success stories, your plan, etc.
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Essential Six - Cause & Effect; “Strategy Maps”
• A good Balanced Scorecard should “tell the story of your strategy”
• Strategy Map specifies relationships and makes them testable
• Also acts as a powerful diagnostic tool for your BSC
• Great way to communicate your Scorecard
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Essential Seven - Reporting – The New Management Meeting
Review Strategic Issues
(20%)
Discuss Implications
(40%)
Review Performance
(40%))
• Provide input to strategic issuescurrently being worked
• Dialog about performance– explain anomalies– suggest solutions– identify issues
• Identify strategic issues fordiscussion at next group meeting
• Review performance data (available on-line)
Review Strategic
Issues(60%))
Discuss Implications
(30%)
Review Performance(10%)
The TRADITIONAL Executive
Management Meeting
Between the Executive Meeting
The NEW Executive Management Meeting
Source: Kaplan & Norton
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Areas of Discussion During the Meeting
Zero-in on Specific Areas of the Business: • The yellow and red traffic lights
Is the measure off track? If so, why?
What is causing this trend?
Analyze Performance Gaps
Discuss and Agree on How to Remedy Issues
• Cancel or refocus current initiatives?• Develop new initiatives?• Re-set the target?• Adopt a new strategy?
Is the target too high?
Is the strategy flawed?
98%
94% 91%
75%
90% 90% 90%
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03
Actual Target
1Q02 value
1Q02target
Measure: Retention of high performance people 75% 90%
1
23
4
Objective: Passionate about the kind of business we are building
90%
Source: Kaplan & Norton
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Essential Eight - Cascading
Mission, Values, Vision
FinancialObjectives Measures Targets Initiatives
CustomerObjectives Measures Targets Initiatives
Internal ProcessesObjectives Measures Targets Initiatives Objectives Measures Targets Initiatives
FinancialObjectives Measures Targets Initiatives
CustomerObjectives Measures Targets Initiatives
Internal ProcessesObjectives Measures Targets Initiatives Objectives Measures Targets Initiatives
FinancialObjectives Measures Targets Initiatives
CustomerObjectives Measures Targets Initiatives
Internal ProcessesObjectives Measures Targets Initiatives Objectives Measures Targets Initiatives
Hig
hes
t L
evel
S
core
card
B.U
. Lev
el, e
tc.
Emp. L. & G.
Emp. L. & G.
Emp. L. & G.
Strategy
Dep
artm
ent,
Gro
up
le
vel
Team and Personal Balanced Scorecards
• Allow everyone to demonstrate how they contribute to overall goals
• Create a consistent language through measurement
• Achieve a laser- like focus on strategy
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The Sacred Obligations of Leadership
Soichiro Honda described the sacred obligations of leadership as 3 things:
•Vision: What will we be?
•Goals: What four or five key things must we do to get there?
•Alignment: Translate the work of each person into an alignment with
the goals.
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The Cascading Process
Mission, Values, Vision
FinancialObjectives Measures Targets Initiatives
CustomerObjectives Measures Targets Initiatives
Internal ProcessesObjectives Measures Targets Initiatives Objectives Measures Targets Initiatives
FinancialObjectives Measures Targets Initiatives
CustomerObjectives Measures Targets Initiatives
Internal ProcessesObjectives Measures Targets Initiatives Objectives Measures Targets Initiatives
FinancialObjectives Measures Targets Initiatives
CustomerObjectives Measures Targets Initiatives
Internal ProcessesObjectives Measures Targets Initiatives Objectives Measures Targets Initiatives
Hig
hes
t L
evel
S
core
card
B.U
. Lev
el, e
tc.
Emp. L. & G.
Emp. L. & G.
Emp. L. & G.
Strategy
Dep
artm
ent,
Gro
up
le
vel
Team and Personal Balanced Scorecards
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Cascading Example
City ScorecardPerspective Objective Measure Target
Customer Provide safe, convenient transportation
Increase in average ridership of public transportation
10%
Department of Transportation ScorecardPerspective Objective Measure
Customer Provide safe, convenient transportation
Percentage of fleet available
90%
Target
Perspective Objective Measure
Customer Provide safe, convenient transportation
Percentage of vehicle repairs completed within 24 hours
Operations Group ScorecardTarget
75%
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Essential Nine - Linking to Management Processes
Budgets
• BSC has evolved from a measurement to a “strategic management” system
• Initiatives on the BSC provide a natural link to the budgeting process
• Using the BSC, budgets are based on strategy (less than 40% of organizations currently make this link)
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Essential Ten - Making the PM System Part of the Organization
• Don’t think of the PM system as a |
project to be “checked off”
• Give PM a home in the organization
• Assign accountability for PM (the BSC Champion??)
• Develop PM policies and procedures – but keep them simple!
• Update the system’s core elements regularly
Will your PM system stand the test of time?
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© 2003 Primerus Consulting, Inc. All Rights Reserved
Thank you for your time. If you have any other questions, please feel free to contact me at: (760) 918-5990 or [email protected]
www.primerusconsulting.com