A Balanced Socrecard Hall of Fame Profile - Motorola Government and Enterprise Mobility Solutions

Motorola’s Government andEnterprise Mobility Solutions

HARVARD BUSINESS

SCHOOL PUBLISHING

A Balanced Scorecard Hall of Fame™ Profile

2 © 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company

The Five Principles of the Strategy-Focused OrganizationEach of the five principles of the Strategy-Focused Organization include specific management best practices that contribute to the achievement of breakthrough results. These best practices—validated through ongoing research with Hall of Fameorganizations and hundreds of other users of the Balanced Scorecard around the world—must be embedded in any organization that wants to make strategy execution a corecompetency.

Principle #1. Mobilize Change Through Executive Leadership

Executive leadership, driven by a need for change, supports the drive to

establish a new way of managing based on a performance-oriented culture.

Principle #2. Translate the Strategy into Operational Terms

The Balanced Scorecard is used to translate the strategy into a language

that everyone understands.

Principle #3. Align the Organization to the Strategy

The scorecard is used to cascade the strategy to all parts of the

organization and align resources needed to accomplish the strategy.

Principle #4. Motivate to Make Strategy Everyone’s Job

The reward and recognition system is used to align

individual behavior with performance objectives called for

by the strategy.

Principle #5. Govern to Make Strategy a Continual Process

Strategy execution is linked to the budget, and a reporting system

based on scorecard measures is used to provide feedback on

strategic performance.

What is the Balanced Scorecard Hall of Fame?

The Balanced Scorecard Hall of Fame for Executing Strategy™, administered by BalancedScorecard Collaborative, recognizes organizations that have achieved breakthrough performance largely as a result of applying one or more of the five principles of theStrategy-Focused Organization. These principles, formulated by Balanced Scorecard creators Robert S. Kaplan and David P. Norton, are described in detail in their book The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in theNew Business Environment (Harvard Business School Press, 2001). BSC Hall of Famemembers are personally selected by Drs. Kaplan and Norton.

To learn more about Hall of Fame selection criteria and Hall of Fame members, visit bscol.com.


One of Motorola’s most profitable business unitsembeds the BSC in its already powerful PerformanceExcellence model—achieving startling business resultsand securing its position as a market leader in avolatile industry.

Motorola’s role as pioneer, innovator, and visionary inmobile communications is widely known. Originallyfounded as the five-employee, Chicago, Illinois–basedGalvin Manufacturing Corporation in 1928, Motorolahas come a long way since introducing its first product:the battery eliminator. For more than 75 years, thecompany has proven itself a global leader in wireless,broadband, and automotive communications tech-nologies and embedded electronic products. It hasalso won recognition for its dedication to ethical busi-ness practices and its pioneering role in importantinnovations.

In fact, Motorola’s history is studded with celebratedmilestones: the first commercially successful car radios(1930); the first portable two-way radio, for the U.S. Army Signal Corps (1943); the first large-screen,transistorized, cordless portable television (1960); the radio transponder that relayed astronaut NeilArmstrong’s historic words from the moon to Earth(1969); the first commercial handheld cellular phone(1984). And in 1988 Motorola became one of threewinners of the first Malcolm Baldrige National QualityAward, which was established by the U.S. Congress to recognize and inspire the pursuit of quality inAmerican business and which has become a hallmarkof excellence.

In addition to its history of product innovation,Motorola has played a major role in spreading practiceof the total quality methodology Six Sigma—originallya measurement standard in product variation thattraces back to the 1920s. A Motorola engineer namedBill Smith coined the term “Six Sigma” to describe thecompany’s use of this methodology to drive continualprocess improvement. Indeed, the term Six Sigma is now a federally registered trademark of Motorola.Since the 1980s, the company has extended the practice of Six Sigma beyond manufacturing and intothe design of new processes and company offeringsas well as transactional customer service and life cyclesupport functions. Since implementing Six Sigma,Motorola has documented more than $17 billion insavings. Today, Motorola University offers classroomand online training in Six Sigma worldwide. And

Table of Contents

Profile ......................................................................................3

Key Results, Takeaways ..................................................11

SFO Spotlight (best practices)......................................12

Strategy Map ......................................................................14

To Learn More ....................................................................15

ABOUT Motorola’s Government andEnterprise Mobility Solutions

Industry: Communication technology

Motorola’s Government and Enterprise MobilitySolutions business (GEMS) is one of four major businesses within Motorola (the other three areConnected Home Solutions, Mobile Devices, andNetworks). GEMS was created in early 2005 from themerger of Motorola’s Commercial, Government &Industrial Solutions Sector (CGISS) and a number ofother Motorola businesses.

The leader in the global radio-system market, GEMS hasserved the growing mission-critical requirements of itspublic safety, government, and enterprise customers formore than 75 years. Its portfolio of products and servicesprovides solutions for interoperable two-way radio communications, mesh networks (a next-generationwireless technology), command and control, identifica-tion and tracking, information management for criminaljustice and civil needs, and physical security and moni-toring. GEMS also designs, manufactures, and sells automotive and industrial electronics and telematics systems that enable automated roadside assistance, navigation, and advanced safety features for automobiles.Its products and services support more than 27 millionusers in approximately 170 countries.

GEMS maintains five call centers and 16 design centersworldwide, as well as seven manufacturing/distributioncenters in five countries and numerous other major facilities worldwide. Among Motorola’s most profitablebusinesses, GEMS accounted for 20% of Motorola’s cor-porate sales and 40% of its operating earnings in 2004.

Headquarters: Schaumburg, IL

Total revenues: $6.2 billion (2004)

Employees: 21,000

Inducted into the Balanced Scorecard Hall of Fame:2004

Balanced Scorecard Hall of Fame Profile: Motorola’s Government and Enterprise Mobility Solutions


hundreds of companies around the world haveadopted Six Sigma as a way of doing business.

A Relentless Drive for Excellence

Against this storied backdrop, GEMS has demonstrateda strong track record. By regularly monitoring changing business realities, the business’s leadershave consistently sought to identify strategies for not only maintaining, but also extending GEMS’s market leadership. This is no small feat, given ongoingshifts in the industry landscape—in the form of ever-stiffening competition, rapidly changing technologies,new market opportunities and challenges worldwide,and shifting customer requirements. GEMS’s leadersare never content to rest on their laurels. And givenMotorola’s reputation as an innovator, they know thatall eyes are on them—from demanding customers tosharp-eyed investors and analysts.

Driven to constantly improve its processes and strive for ever-higher levels of excellence, GEMS hasadopted several powerful performance managementapproaches—including the BSC—to align its work-force behind the business’s strategic goals.

In Search of a Strategic Planning System

In 1999, GEMS began using Performance Excellence(PE) as its model for becoming a high-performingenterprise. Adapted from the Baldrige Quality Award (which the business won in 2002), PE provides organizations with a systems approach to organizational development. It’s the “glue” thatholds together priorities between organizations andfunctions for mutual success—and it ensures thesteady pursuit of continuous improvement and therealization of best-in-class processes and results. PE also emphasizes balanced value creation for allkey stakeholders—from customers to communities.Moreover, this approach contains an individualPerformance Management component. Through thiscomponent, managers and employees define theirtop personal goals supporting their organization’s

performance expectations and the behaviors they willwork on to align with the company’s strategy andgoals and enhance their personal development.

One of the practices that the PE model encourages is the yearly assessment of the organization’s fulfillmentof Baldrige Award criteria. Using these assessments,GEMS executives determined that the business lackeda sufficiently capable strategy and business-planningprocess, as well as strategic alignment throughout theorganization. As Mark Hurlbert, Director of BusinessProcesses at GEMS’s Office of Business Excellence(the OBE), explains, “We scored quite low in our initial assessment of the Strategic Planning categoryin the Baldrige framework. We clearly lacked a systematic process for both strategy development anddeployment.” According to Hurlbert, GEMS leadersbenchmarked Baldrige winners to see what practicesand principles they used in the category of strategydevelopment and execution. “We found that many of them used the Balanced Scorecard,” Hurlbert says.“We decided that the scorecard methodology wouldbe the perfect opportunity for us to fully deploy PEin our organization.” Leaders, he adds, also believedthat the BSC would help GEMS to revitalize its earlierefforts to move itself further along the BusinessMaturity Model continuum.

GEMS leaders thus decided to make the BSC a component of the overarching PE framework. AsHurlbert puts it, “If Performance Excellence was tobe our F-16 fighter jet, the BSC would become ourflight plan.”

Grow the Core, Double the Score

To jump-start the BSC effort, GEMS established its Performance Measurement Council (PMC). There were about 22 members, who hailed from the business’s worldwide regions, product groups,functions (such as engineering, supply chain manage-ment, integrated solutions, and sales and marketinggroups), and support areas (including strategy, theOBE, finance, human resources, legal, and informationtechnology). Members also included directors of strategy, finance, and quality and/or “Master BlackBelts” in Six Sigma.1

PMC members are collectively responsible for GEMS’sbusiness planning, measure and initiative alignment,scorecard development and deployment, and target-setting and creating definitions of success. They also lead GEMS’s “Digital Cockpit” (its automatedscorecard reporting system). Martin Swarbrick, vicepresident of the OBE, and Marc Rothman, GEMS’s

As Mark Hurlbert of GEMS’s Office of Business Excellence puts it, “IfPerformance Excellence was to be our F-16 fighter jet, the BSC wouldbecome our flight plan.”


CFO, became the BSC sponsors, backed by GregBrown, GEMS’s president.

Council members quickly developed the broad outlines of a high-level strategy that could help GEMSrealize its vision: to be the trusted integrator andleading provider of innovative communication and information solutions for the public sector and business-critical enterprise customers (those customers for whom business-data connectivity iscrucial to the survival of their business). The strategy,the council determined, would also have to enableGEMS to fulfill its mission: enabling customers to achieve their own mission and improve their operational performance with integrated informationand communications solutions. In addition, the strategywould need to support GEMS’s brand promise:helping organizations move faster, reach farther, andact with confidence by expanding their possibilitiesthrough rapid, mobile intelligence.

As a final criterion, the strategy would have to support the “4e’s + always 1” leadership standardsthat Motorola and GEMS had established. Themoniker stands for “envision (focus externally), energize (develop and deploy talent), edge (act with clarity and decisiveness), execute (execute with urgency), and ethics (communicate openly andcandidly).” Ethics represents the “+ always 1” part of the standards, because GEMS’s leaders believe that without attention to ethics, all other leadershipqualities will erode.

Identifying technological supremacy, customer intimacy, and operational excellence as critical success factors for GEMS, both the leadership teamand the PMC laid out four major—and memorable—strategic themes:

• “Grow the Core”: How can GEMS enhance our position in what we do today?

• “Extend the Core”: How can we leverage whatwe do today to strengthen our leadership positionin complementary adjacent businesses?

• “Double the Score”: How can we double ourserved available market through a combination ofinternal investment and potential acquisitions?

• “Improve and Do More”: How can we drive both major changes and continuous (incremental)improvement in customer loyalty as well as business effectiveness and efficiencies?

In addition to linking the BSC to its PerformanceExcellence model, GEMS tied it to Motorola’s Six

Sigma model—by defining the strategic objective“Make Six Sigma the way we work.” Six Sigmaemphasizes “hard-coding” solutions to problems(often through software and new organizational controls) so that the problems don’t crop up again.All Six Sigma efforts at GEMS are evaluated accordingto their potential impact on the business’s “Big Y’s”:

• Customer satisfaction/quality

• Operating earnings

• Operating cash flow

• Strategic sales growth

GEMS’s Big Y’s are derived from the Six Sigmaexpression “Y is a function of X,” where “X” in GEMS’scase represents the vital few projects or activities that exert the greatest impact on the measures againstwhich the business is trying to perform. In short,GEMS’s Big Y’s represent the most important resultsthe business intends to achieve.

Creating and Cascading the Scorecard

By 2000, the PMC had finished developing GEMS’scorporate-level scorecard. It went on to developGEMS’s strategy map in 2003. The architecture of the strategy map illustrated leaders’ theories abouthow best to achieve the high-level goal of improvingshareholder value. For example, the learning andgrowth perspective emphasized the optimizing ofinformation, human, and organizational capital. Above learning and growth appeared a unique fifthperspective called “Creating HR Alignment,” whichcontained themes such as “Leadership Talent Supply,”“High-Performance Workforce,” and “OrganizationChange Agenda” (today, “Change Management”). Thedecision to create this special perspective revealsGEMS’s understanding that a business cannot captureits people’s hearts and minds unless employees canclearly see how their actions affect the execution ofthe company’s strategy. Finally, the map’s internalprocesses perspective contained themes related toprocesses such as operations management, productand channel leadership, innovation, and influencemanagement (which emphasized driving favorablestandards and regulatory and legislative outcomes).

The three critical success factors that GEMS had identified—operational excellence, technologysupremacy, and customer intimacy—resided in thestrategy map’s customer perspective, as expressed inobjectives such as “Price,” “Quality,” “Availability,”and “Selection.” And the objectives within the “Growthe Core,” “Extend the Core,” and “Double the Score”

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© 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company

themes resided in the financial perspective, linking to objectives related to productivity and revenuegrowth. These objectives in turn linked to the theme“Improve Shareholder Value.”

At GEMS, each member of the senior leadershipteam, which comprises all direct reports to the business’s president, is responsible for defining and working toward success on some component ofthe strategy depicted on the map. The team membersare also accountable for monitoring results in the part of the strategy that they own. In addition, they’reresponsible for learning from their execution of thatstrategic component in order to drive continuousimprovement.

In 2000, the PMC had cascaded the high-level scorecard to every major level within the GEMSorganization worldwide—including businessunits/regions, partners (such as supply chain), andsupport functions (OBE, HR, finance, IT, and legal).The following GEMS staff-level organizations developed scorecards:

• Regions: The scorecard was cascaded to fourregional sub-organizations: the Americas; Europe,the Middle East, and Africa (EMEA); Asia Pacific;and Israel.

• Markets/product groups/functions: The scorecard was cascaded to six sub-organizations:Automotive, Enterprise Mobility Solutions, GlobalRelations & Resources Organization, Mesh &Application Solutions, Global Technology andDevelopment Group, and Supply Chain.

• Support functions: The scorecard was cascadedto four sub-organizations: HR, finance, IT, and legal.

To cascade the scorecards, PMC members helpedbusiness unit leaders translate GEMS’s high-level one-page depiction of the strategy and strategic

objectives into unit-level objectives and metrics. Toensure that objectives were aligned, the council alsoasked business unit leaders to use a common set of templates, such as Alignment Measure DefinitionOwnership Matrices and Business/Function AlignmentGrids. Alignment Grids, for example, list high-levelobjectives in the left-hand column and show supportingbusiness unit objectives in rows.

Alignment Grids also code each unit-level objectivewith a color: blue means “Wording unclear; needs to be more specific”; green indicates that the unit-level objective is acceptable; and red signals that aunit-level objective is needed. Orange symbolizes unit-level objectives for which that unit will assume the “leadership role” within GEMS. In other words,the unit will lead specific initiatives intended toachieve the targeted performance on the orange-coded objective. And all other units will support thedesignated leading unit.

A Cascade of Communications

Mark Hurlbert credits GEMS’s culture of codifiedprocesses and continuous improvement mindset withthe relatively uneventful cascading of the scorecard.“Our culture has had continuous improvement bakedin for the last 15 or 20 years,” he explains. “We’vealways lived these values.” For example, everyone at GEMS expects to have personal performance constantly evaluated and challenged. “Whatever yourperformance was last year,” Hurlbert notes, “youanticipate improving it in the coming year, whetherit’s accelerating cycle time, enhancing quality, orsome other criterion. We’ve always sought big, audacious goals here. Sure, we don’t always makethem. But we do celebrate our wins.”

Still, to ensure the smoothest possible cascadingprocess, GEMS leveraged the power of communication.The business began by overhauling the structure ofits existing communication centers. Previously, GEMS’sexternal and internal communications teams hadoperated separately. In 2000, they were broughttogether under the same leadership—reporting to the head of strategy—for the first time. The newlyintegrated communications team thus began serving a central strategic function within GEMS.

This team developed an entirely new workforce communication process, through which GEMS beganconveying performance expectations and updates toemployees through its Quarterly CommunicationCascade. This combination of one-way, two-way,upward, downward, electronic, and face-to-face

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“Whatever your performance was lastyear, you anticipate improving it in thecoming year, whether it’s acceleratingcycle time, enhancing quality, or someother criterion. We’ve always sought big,audacious goals here.”

—Mark Hurlbert

messages is now delivered through numerous channels and in a wide range of formats.

For example, the cascade begins with Motorola’squarterly earnings release. This release is followed by a “state of the company” address delivered byMotorola’s chairman and CEO. The address takes the form of an e-mail and leverages Motorola’s TALKMOTO, an online MP3 download. Next, GEMS’spresident issues a “state of the business” e-mail andWeb cast to all GEMS employees worldwide.

Each quarter, all GEMS leaders around the world conduct town hall meetings during a designated two-week window. At town halls, leaders not onlycommunicate the state of their organization, they also explain how their performance is tied to theobjectives on their scorecard and how that performancein turn supports GEMS’s overall performance. In addition, “state of the group” and “state of the function”e-mails delivered by group and function leaders to their staffs provide employees worldwide withspecific information on how GEMS’s strategy appliesto them and how they can exert a positive impact onoperating earnings and quality.

Additional vehicles for communicating about strategyinclude department meetings, articles in internal publications (such as One Motorola News), GEMSNewsbriefs (electronic news summaries), and one-on-one manager/employee discussions. According toMartin Swarbrick, most employees prefer face-to-facediscussions with their supervisors about strategy andperformance, indicating a high level of engagementin GEMS’s management of strategy execution. Andevery employee, adds Mark Hurlbert, participates in a personal discussion about performance with his orher manager at least four times a year. In addition,online 270- or 360-degree feedback assessments areconducted for all mid-level and higher managers.Through these assessments, managers learn how their superiors, peers, and direct reports view theirperformance on the “4 e’s + always 1” standards andhow their scores compare with those of others.

To ensure consistency, all messages about strategyare developed by GEMS’s communications team.Such messages enable employees to familiarize themselves with major strategic initiatives (such asGEMS’s branding program, customer satisfactionefforts, and Six Sigma) as well as the business’s financialperformance, employee survey results, incentiveresults, and core company values.

So, how have employees responded to the scorecard?According to Hurlbert, it didn’t take much effort to

motivate people to embrace this new component ofthe PE model. “People wanted a sense of direction,and wanted a line of sight between what they do andhow the business performs,” he says. “The scorecardmade it clear that their work matters.” Hurlbert notesthat the introduction of the scorecard also improvedemployees’ awareness of the strategy: in 1998, “only42% of employees understood their division’s PEgoals. By 2000, that needle had moved to 66%.”

The View from the Cockpit

The Digital Cockpit has served as another importantcommunication tool. The mechanism through which GEMS reports on its BSC, the Digital Cockpit is linked to Motorola’s knowledge managementrepository, known as Compass. GEMS also populatesthe Cockpit with performance measurement informa-tion, using various off-the-shelf business-view andproject-management applications as well as its owndata warehouse.

The Digital Cockpit is a standalone application that is implemented throughout GEMS. Roughly 400 peoplein GEMS (including the leadership team’s staff mem-bers, measure owners, and assistants) currently moni-tor their performance, provide commentary, and usethe information to govern the business. All employ-ees have access to the performance data relevant totheir work. The Cockpit offers many different viewsand contains 500 measures. It provides customizedreports and Web links for users.

Using the Cockpit, measure owners can create personalized “briefing books” that quickly depictwhere the organization stands on key goals. Moreover,color codes indicate performance on each measure:

• Blue indicates “achieving year-to-date stretch/benchmark goal and/or on track to achievestretch/benchmark plan.”

• Green means “achieving year-to-date plan and/oron track to achieve or better the annual plan.”

• Yellow signifies “not achieving year-to-date planbut it is still possible to achieve the annual plan.”

• Red symbolizes “not achieving year-to-date plan,and achieving the annual plan is unlikely.”

By clicking on each measure, objective owners can “drill down” to see performance on initiativesspecifically related to that measure and/or sub-measures that have contributed to good performanceon a higher-level measure.

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GEMS monitors scorecard performance throughoutthe year. Recipients of its performance updatesinclude Motorola’s CEO, GEMS’s extended leadershipteam, and employees. Organizational performanceupdates include current-year initiatives related to the “Grow the Core,” “Extend the Core,” “Double theScore,” and “Improve and Do More” themes—codedblue, green, yellow, or red to indicate year-to-dateand forecasted performance on each initiative. Undera section titled “Performance Measurement,” year-to-date and forecasted business results are listed—including orders, sales, operating earnings, operatingcash flow, cost reductions, and customer satisfaction.

Linking Personal Goals and Incentives to BSC Performance

At GEMS, each employee’s goals are linked to BSCperformance through the business’s employeePerformance Management process. During the firstquarter of every year, managers meet with each of their employees to define the top five individualgoals that would best enable that person to executeon the scorecard of the organization (the group,region, market, function, support function, or busi-ness unit) that he or she most directly supports. At this time, employees also define the top fivebehaviors they need to improve in order to progressalong the professional path they’ve defined. Forexample, an employee may decide that he needs toimprove on his ability to “develop talent by coachingpeople or providing them with challenging work,”which would fall under the “energize” category ofleadership behaviors.

At the end of the second and third quarters, managers and employees assess progress towardthese defined goals and behavioral improvements. At

the end of the fourth quarter, managers determinewhich employees have met or exceeded their personal strategic and behavioral goals. Those individuals receive incentives, stock options, andother rewards following the close of the fiscal year. (A portion of each employee’s compensation is also based on Motorola’s companywide results.)First-level supervisors make decisions about rewardsbased on individual strategic performance and their overall contribution toward both team and organizational performance. Those decisions are then reviewed and approved by senior management,senior HR leaders, and senior compensation managers.This review process helps ensure that reward decisions are made within proper guidelines andwithin budget.

Mark Hurlbert notes that GEMS also adapts rewardssystems established throughout Motorola. For example,through the Bravo Award, employees who score significant achievements in performance—such as a major engineering innovation or an important set of patents—receive financial rewards. “These kinds of programs enable us to keep our top talent andattract new talent,” Hurlbert explains, “as well asensure that we have the right people in the rightpositions in the business.”

Refreshing Strategy, Managing Initiatives

GEMS refreshes its strategy through an annualtrimester review cycle. From January through April,business leaders assess leadership bench strength and overall organizational performance. Between May and August, they evaluate the current strategy,make refinements as necessary, discuss the followingyear’s key issues, and clarify linkages to the organiza-tion’s long-range plans. From September throughDecember, they begin implementing new strategicinitiatives, finalize both the business models andbudgets for the following year, and communicatestrategic changes to all associates.

At these strategy review sessions, leaders discussimportant emerging developments in customers, markets, and competitors. They also analyze threatsemerging in the business environment and take stock of technological advances, supplier and partnerrelationships, and changes in functional areas such as HR, IT, and legal.

GEMS uses a Strategic Balance Sheet, a table that lists assets and liabilities across numerous categoriessuch as leadership, markets/customers, and strategicrelationships. Leaders identify gaps between targeted

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GEMS uses a Strategic Balance Sheet, a table that lists assets and liabilitiesacross numerous categories such as leadership, markets/customers, andstrategic relationships. Leaders identifygaps between targeted and actual performance, and then generate ideasfor initiatives to close the gaps.

and actual performance, and then generate ideas forinitiatives to close the gaps. Anyone proposing an initiative must present a business case thatdemonstrates how the initiative would fill the gapand help advance GEMS’s strategy. The business case for an initiative must set forth the goal of theinitiative, provide a program or project plan, anddescribe the opportunity the initiative presents. Inaddition, it must forecast the expected return oninvestment in the program, and define the projectscope and the project team structure—includingsponsor, champion, black belts, and team members.

In making the business case for an initiative, executives and managers focus particularly on howthey expect the project to affect Motorola’s “Big Y’s.”For example, the proponents of one project designedto increase market share in a particular region docu-mented the effort’s potential impact on the Big Y“operating earnings” by depicting anticipated changesin sales; manufacturing costs; research and development(R&D) costs; and selling, general, and administrative(SG&A) costs.

GEMS’s approach to initiative rationalization reflectspractices applied at the corporate level withinMotorola. A Corporate Initiatives Group works acrossall of Motorola’s businesses to ensure synergy amongmajor programs—and to ensure that the knowledgecreated in each of the company’s businesses is leveraged across the entire organization. IndividualMotorola businesses are also free to develop theirown approaches to documenting the merits of strategic initiatives.

Establishing a Strategy Management Office

A key step in the evolution of an organization’s BSCprogram is the creation of a strategic managementoffice. For GEMS, this governing body takes the formof the Office of Business Excellence (OBE), estab-lished in 1999. The OBE leads the business planningprocess and organizational performance managementeffort, and ensures strategy execution. The OBE notonly helps define “the right things to do” but alsoensures that “the right things get done right.” Through2004, the office reported to the president; today,while still accountable to the president for the BSC, it is also accountable to the entire supply chain.

Thus the OBE helps the Performance MeasurementCouncil team “bridge the linkages between functionsthat exist in many organizations which no one reallyowns,” maintains Swarbrick.

Scoring Successes

The BSC has helped GEMS manage change whilealso generating admirable results on both the financialand nonfinancial fronts. The return on net assets (for the then-Commercial, Government & IndustrialSolutions Sector [CGISS]) skyrocketed from about16.8% in 2000 to 139.2% in 2004, while sales rose 11%annually from 2002 to 2004. During those same years,GAAP operating earnings as a percentage of salesrose from 8.7% to 16.4%. Meanwhile, the business’scall centers have achieved world-class performanceresults. For example, they enjoy answer rates of lessthan 7 seconds and an abandonment rate of less than2%. Moreover, employees’ job satisfaction, strategicawareness, and understanding of their contributoryroles have all risen significantly since 2001, as measured by employee engagement surveys.

Customer satisfaction results have proved equallyimpressive:

• 49.6% in “top-box” results (five points on a five-point Leickert scale) and 92.5% in “top-two-box” results (four- and five-point scores) world-wide on GEMS’s customer satisfaction surveys.

• 83% of GEMS’s customers would recommend thebusiness, and 81% would repurchase its products.

• 97.2% of the time, GEMS delivers its large-systemimplementations on time.

Starting in 2003, after GEMS won the covetedMalcolm Baldrige National Quality Award in the manufacturing category, the business became anambassador for the Performance Excellence frame-work. GEMS has described its strategy managementexperiences and business results at conferences and venues around the world and to well over10,000 participants—including the Quest forExcellence conference hosted by the U.S. Departmentof Commerce.

GEMS has also shared the BSC methodology as a best practice with other Motorola businesses.According to Mark Hurlbert, “most of the other businesses in Motorola have been using a BSC since2000. Each of them is at a different point in theirdeployment of the methodology and using the score-card for organizational performance management.We’ve shared our best practices with all of them,including explaining how we’ve operationalized the scorecard.” Hurlbert says that many of these businesses have adopted elements of GEMS’sapproach to the BSC and that “GEMS is acknowledgedoutright as the leader in these sets of capabilities.”

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Finally, GEMS’s use of the scorecard has enabled thebusiness to streamline and accelerate major changeprocesses—such as acquisitions. In January 2005, for example—the time of year devoted to finalizingstrategy and deciding how to deploy it during theyear—GEMS absorbed several Motorola organizations,including the automotive unit. “In just two weeks,”Hurlbert says, “we integrated the new organizations’strategic plans into GEMS’s plans, and we reconfiguredthe corporate scorecard in our Digital Cockpit byFebruary.” This achievement represented a hugeimprovement over previous integrations, which typically required more than three months.

An Eye to the Future

In 2005, Motorola restructured its businesses to further drive its seamless mobility strategy. It had divested its former semiconductor business (now the independent, publicly traded FreescaleSemiconductor) in 2004 and then realigned itsremaining five businesses into four—including GEMS.

According to Russ Robinson, Director of HumanResource Strategy and Communications, the organiza-tion’s leaders recognize that competition for bestpractices in all facets of business performance willconstantly escalate. To continue to thrive, GEMS must work relentlessly to improve—simultaneously—all processes that create value for the business. Inaddition, Robinson explains, “the alignment amongintangible assets and business strategy is critical forthis business, as we look forward to our human,organization, and information and other capital assetsto differentiate us from our competitors in achieving

success for customers and shareholders alike.”

Through its thoughtful use of the BSC methodology—coupled with the disciplines of Six Sigma and theBaldrige principles—GEMS has positioned itself tostrive for ever-higher levels of value creation and to continue scoring big successes in the global marketplace. In Martin Swarbrick’s words, “We view our BSC implementation as a core competencyand a strategic weapon. Our people, who are ourcompetitive advantage, are using tools such as this in ways that have enabled GEMS to experience thebest business results and organizational performancein its 76-year history.”

1 Demonstrating the highest level of technical and organizationalproficiency, Master Black Belts are in-house experts in Six Sigmatools and methodology. Their roles include providing coachingon Six Sigma projects, developing and delivering Six Sigmatraining, partnering with Six Sigma champions, and identifyingand deploying best practices.

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• Return on net assets (for the then CGISS business) skyrocketed from 16.8% in 2000 to 139.2% in 2004.

• From 2002 to 2004, sales rose 11% annually, and GAAP operating earnings as a percentage of sales jumped from 8.7% to 16.4%.

• GEMS has sustained its position as the number-one supplier of radio communications solutions worldwide.

• The business’s call centers have achieved world-class performance results, as measured by scoring consistently around 93% in “top-two-box” results on transactional customer surveys.

• Employees’ job satisfaction, strategic awareness, and understanding of their contributory roles have soared since 2001, as measured by increasingly favorable responses to survey questions assessing workers’ understanding of what the business’s goals are, how their personal goals support GEMS’s goals, and how clear their personal performance goals are.

• Employees’ confidence in GEMS’s senior management team rose 12% during 2004, as measured by favorable responses to the survey question, “My sector/organization is effectively well managed and well run.”

• Workforce retention has risen steadily since 2000, as measured by employees’ expressed intentto stay with the business until retirement.


KEY RESULTS


• Build cross-organizational teams with representation from every region, department, function, and support area to ensure all needs, processes, and issues are addressed in BSC development and deployment—and in strategy execution.

• With rigorous improvement and performance management processes already in place, the benefits of a BSC program will be even more pronounced. And the BSC can enhance the effectiveness of those processes, in part through the cause-and-effect relationships it highlights and the feedback mechanism it provides.

• If human capital is a particularly crucial strategic asset to your organization (if your organization, for example, is an industry innovator), consider giving HR alignment specialemphasis in the strategy map, beyond its place within the learning and growth perspective. By doing so, Motorola’s GEMS, for example, makes its state of strategic readiness more visible.

• Leverage the power of your external communications team, by either integrating it or simply coordinating it with your internal communications team, to help disseminate performance and strategy-related information to the workforce. Use all media, formats, and channels available, fully and often.

TAKEAWAYS

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SFO SPOTLIGHT

All Balanced Scorecard Hall of Fame organizations exemplify the five principles of the Strategy-Focused Organization. Motorola’s GEMS is especially noteworthy as an exemplar of the following SFO best practices:

• Leadership team engaged: GEMS established a 22-person Performance Measurement Council (PMC), drawn from a cross-section of businesses, functions, and support areas worldwide, to lead and oversee the Balanced Scorecard effort. The VP of Business Excellenceand CFO were BSC sponsors. Council members worked to flesh out a high-level strategy thatsupported the business’s vision, mission, and brand promise. They also codified leadershipand ethical standards and developed the enterprise BSC and strategy map. They worked tolink the BSC to the company’s existing, overarching Performance Excellence and Six Sigmamodels. [Principle #1: Mobilize Change Through Executive Leadership]

• Vision and strategy clarified: GEMS had a well-defined vision (to be the trusted integrator and leading provider of innovative communication and information solutions for the public sector and business-critical customers) and mission (enabling customers to achievetheir mission and improve operational performance). Leaders identified four catchy strategicthemes (“Grow the Core,” “Extend the Core,” “Double the Score,” “Improve and Do More”), as well as a brand promise (helping customers move faster, reach farther, and act with confidence). [Mobilize principle]

• Initiatives identified and rationalized: Using its Strategic Balance Sheet, the companyidentified performance gaps every year. From this, it developed a list of potential initiatives,developing a business case for each one and calculating its impact on the strategy.[Principle #2: Translate the Strategy into Operational Terms]

• Accountability assigned: Every member of the senior leadership team—the president’s direct reports—is accountable for a component of the strategy as depicted in the strategy map. These executives must monitor results in their areas of responsibility, as well as applylessons learned to stimulate continuous improvement. [Translate principle]

• Corporate–SBUs aligned: GEMS cascaded the scorecard to every major level within theorganization, including business units/regions, partners, and support functions. To help alignobjectives, the PMC created templates, such as the Alignment Measure Definition OwnershipMatrices and Business/Function Alignment Grids. In addition, it restructured its communicationscenters to integrate the external and internal communications teams. The teams were responsiblefor a new workforce communication process, which today includes disseminating performanceexpectations and updates to employees. The team uses a variety of formats, media, andapproaches. The company’s Digital Cockpit, through which it reports on its BSC, further supports organizational alignment. [Principle #3: Align the Organization to the Strategy]

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SFO SPOTLIGHT

• Strategic awareness created: The Quarterly Communication Cascade to employees includes Motorola’s quarterly earnings release and a “state of the company” address from the president. Also, GEMS’s president conducts a “state of the business” Web cast and issues a related e-mail. GEMS’s leaders around the world conduct town hall meetings every quarter, in which they emphasize the links between their unit’s scorecard performance and GEMS’soverall performance. And group and functional leaders routinely issue other e-mail updates.Other vehicles for building strategic awareness include departmental meetings, articles in the company newsletter, electronic news summaries, and one-on-one discussions betweenemployees and their supervisors. [Principle #4: Motivate to Make Strategy Everyone’s Job]

• Personal goals aligned: Employees’ goals are linked to the BSC through the employeePerformance Management process. In Q1, every employee meets with his or her manager to define the BSC-related goals he or she supports and the top behaviors they need toimprove. At the end of each quarter, employee and manager review progress. At the end ofQ4, managers select an appropriate reward (e.g., praise, incentives, stock options) to thoseemployees who have met or exceeded their targets. [Motivate principle]

• BSC reporting system established: The Digital Cockpit, GEMS’s automated reporting system, is in place throughout GEMS locations. It tracks hundreds of measures and offers multiple views of performance; it also enables users to create personalized briefing books. The system is linked to Motorola’s knowledge management repository. [Principle #5: Govern toMake Strategy a Continual Process]

• Process management linked to strategy: Adopted in 1999, GEMS’s Performance Excellenceframework helps the organization set key initiatives, establish priorities, and align processes,always working toward continuous improvement and best-in-class processes and results. PEalso emphasizes balanced value creation for all key stakeholders. The employee PerformanceManagement process is a component of PE. GEMS’s scorecard is linked to the PE model, aswell as to Motorola’s use of Six Sigma. [Govern principle]

• Strategy management office established: The cross-functional Performance MeasurementCouncil was established in 1999 to conduct performance planning and management (throughthe Digital Cockpit), and to develop and deploy the BSC. From this Council emerged the Office of Business Excellence, also in 1999, which encompasses business and strategic planning, organizational performance management, and strategy execution. Until 2004, theoffice reported solely to the president; today, it is also accountable to the entire supply chain.[Govern principle]

14



MOTOROLA’S GOVERNMENT AND ENTERPRISE MOBILITY SOLUTIONS STRATEGY MAP

Improve shareholder value

Customer value proposition

Employeeperformancemanagement

Changemanagement

Leadershiptalentsupply

High-performance

workforce

Creating ReadinessCreating

HR AlignmentPerspective

InternalPerspective

CustomerPerspective

FinancialPerspective

Revenue growth strategy

Doublethe

score

Extendthe

core

Growthe

core

Productivity strategy

Improvethe business

Availability

QualityPrice

Operational excellence Technology supremacy Customer intimacy

Function

FeaturesSelection SupportService

BrandPartnership

Operations management

processes

Product andchannel leadership

processes

Innovationprocesses

Influencemanagement

processes

Learning& Growth

PerspectiveInformation capital Human capital Organizational capital

• Systems

• Applications

• Networks

• Security

• Values

• Skills

• Behaviors

• Knowledge

• Alignment

• Culture

• Leadership

• Teamwork

* Each key business process in the internal perspective contains several specific objectives.Due to space constraints, these could not be included.

To learn more about Motorola’s GEMS and itsBalanced Scorecard program, see:

• The Balanced Scorecard Report article“Communication and Education to Make StrategyEveryone’s Job,” by Robert S. Kaplan, BSRMarch–April 2000 (Reprint #B0003A)

• Balanced Scorecard Hall of Fame Report 2005,which features a brief profile on Motorola’s GEMS(then CGISS) and the 17 other Hall of Fameinductees from 2004 (Product #9157)

• The BSC library: BSC portal members with accessto the library can search the keyword “Motorola”for a complete list of resources, including conferencepresentations and executive video interviews. (Forinformation on becoming a BSC Portal member, go to www.bscol.com)

• Web site: www.motorola.com

ADDITIONAL RESOURCES

• For more information on the Strategy-Focused Organization (SFO) principles, visit BSC Online. Membership is free. Go to www.bscol.com/bsc_online.

• For additional guidance on the SFO principles, and to learn about best practices in use at otherorganizations that have successfully executed strategy, go to www.bscol.com/toolkits. Here, you’ll find many resources available for purchase,including Strategy Execution Toolkits.

• For access to the largest compilation of published materials on the Balanced Scorecard and the Strategy-Focused Organization, visitwww.sfo.harvardbusinessonline.org.

15



Editorial Advisers

Robert S. Kaplan Professor, Harvard Business School

David P. NortonPresident, Balanced Scorecard Collaborative

Edward D. Crowley Executive Director–HBR Specialty Publications

Publisher

Robert L. Howie Jr. SVP, Balanced Scorecard Collaborative

Director of Research

Randall H. Russell Balanced Scorecard Collaborative

Editor

Janice Koch Balanced Scorecard Collaborative

Writer

Lauren Keller Johnson

Design

Robert B. Levers

About Balanced Scorecard Collaborative

Balanced Scorecard Collaborative (BSCol), a Palladiumcompany, is a global family of professional service firmsthat helps clients use the Balanced Scorecard to successfullyexecute strategy. BSCol offers a wide range of services,including education (conferences, publications, research),training (public seminars, in-house, online), consulting(strategy, performance, change), and technology (“BSCPortal™,” “BSC First Report™,” toolkits). To learn more, visit www.bscol.com, or call 781.259.3737.

About Harvard Business School Publishing

Harvard Business School Publishing is a not-for-profit, whollyowned subsidiary of Harvard University. The mission ofHarvard Business School Publishing is to improve thepractice of management and its impact on a changingworld. We collaborate to create products and services inthe media that best serve our customers—individuals andorganizations that believe in the power of ideas.

Ordering Information

To order additional copies of this profile (in print or bydownload), click here or call HBSP at 1-800-668-6705(617-783-7474 outside the U.S.) and request product #1304. Or visit www.sfo.harvardbusinessonline.org andinsert the product number into the search field, or type in“Hall of Fame.” Here you’ll find a list of all available Hallof Fame profiles and other products for the Strategy-Focused Organization.

© 2005 by Harvard Business School Publishing and Balanced ScorecardCollaborative, a Palladium company. Quotation is not permitted. Materialmay not be reproduced in whole or in part in any form whatsoever without permission from the publisher. Balanced Scorecard Hall of Famefor Executing Strategy™ and Balanced Scorecard Hall of Fame Profiles™are trademarks of Balanced Scorecard Collaborative. The trademarks referenced in this publication are the property of their respective owners.

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