UCL/APM Principles of Project Management Balanced Scorecard Graham Collins, UCL...
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Transcript of UCL/APM Principles of Project Management Balanced Scorecard Graham Collins, UCL...
©Graham Collins 2003
The Balance Scorecard - Kaplan and NortonThe Balance Scorecard - Kaplan and Norton
Why- managers do not want to select between financial and operational- they want a balanced perspective
4 measures, one financial and three operational (customer satisfaction, internal processes, and the organisation’s ability to learn) i.e. drivers behind financial performance.
Slides based on The Balanced Scorecard, Robert Kaplan & David Norton, Harvard Business School Press,1996
©Graham Collins 2003
Financial Perspective
Goals Measures
Customer PerspectiveGoals Measures
Internal Business PerspectiveGoals Measures
Innovation and Learning Perspective
Goals Measures
What must we excel at?
How do customers see us?
Can we continue to improve and create value?
How do we look to shareholders?
The Balanced Scorecard Links Performance MeasuresThe Balanced Scorecard Links Performance Measures
©Graham Collins 2003
Financial Perspective
Goals Measures
Survive Cash flow
Succeed Quarterly sales growth and operating income by division
Prosper Increased market share and ROE
Balanced Business ScorecardBalanced Business Scorecard
©Graham Collins 2003
Customer Perspective
Goals Measures
New products Percentage of sales from new products
Percentage of sales from proprietary products
Responsive supply On-time delivery
(defined by customer)
Preferred supplier Share of key accounts’ purchases
Balanced Business ScorecardBalanced Business Scorecard
©Graham Collins 2003
The vision‘As our customers’ preferred provider, we shall be the industry leader’
StrategyServices that surpass needs
customer satisfaction
Continuous improvement ...
Financial Return on Capital, Cash flow, project profitability
Customer Value for money, competitive price, innovation
Internal Shape customer requirement, tender effectiveness
Growth Continuous improvement, product and service innovation, empowered work force
Strategic ObjectivesStrategic Objectives
©Graham Collins 2003
What is my vision of the future?
If my vision succeeds, how will I differ? (perspectives)
To my Shareholders
To my Customers
With my Internal Management Processes
The Balanced Scorecard
The critical success factors
What are the critical measurements?
With my ability to innovate and grow
Begin by Linking Measurement to StrategyBegin by Linking Measurement to Strategy
Statement of vision
©Graham Collins 2003
Building a Balanced ScorecardBuilding a Balanced Scorecard
Preparation Interviews: First round Executive workshop: First round Interviews: Second round Executive workshop: Second and third
round Implementation Periodic reviews
©Graham Collins 2003
Vision and Strategy
Financial
CustomerInternal Business Process
Learning and Growth
FinancialObjectives Measures Targets Initiatives
To succeed financially, how should we appear to our shareholders?
Translating Vision and Strategy: Four PerspectivesTranslating Vision and Strategy: Four Perspectives
©Graham Collins 2003
Balanced Scorecard
Translating the vision
Clarifying the vision
Gaining consensus
Feedback and LearningArticulating the shared vision, supplying strategic feedback
Facilitating strategy review and learning
Business Planning
Setting targets
Aligning strategic
initiatives
Allocating resources
Communicating and Linking
Communicating and educating
Setting goals
Linking rewards to performance measures
Managing Strategy: Four ProcessesManaging Strategy: Four Processes
©Graham Collins 2003
1. Clarify the vision
2. Communicate to middle managers
3. Develop business unit scorecards
4. Eliminate non-strategic investments
5. Launch corporate change programmes
6. Review business unit scorecards
7. Refine vision
Building a strategic management systemBuilding a strategic management system
8. Communicate the Balanced Scorecard to the entire company
9. Establish individual performance objectives
10. Update Long-range plan and budget
11. Conduct monthly and quarterly reviews
12. Conduct annual strategy review, link everyone’s performance to the balanced scorecard
©Graham Collins 2003
Further readingFurther reading
The Balanced ScorecardRobert Kaplan & David NortonHarvard Business School Press1996
ISBN 0-87584-651-3
