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NHRDN Virtual Learning Session on Integrating Balanced Scorecard and HR Scorecard
- 1. An Introduction to the
BALANCED
SCORECARD
Ravi Parthasarathy
BSc., MHR., MBA (USA)
BSC & OD Expert
©Peopleplus 2010
- 2. Objectives of this Session
• Recap of Strategic Planning Process
• Birth of BSC and what is BSC
• Barriers to Strategy Execution
• Cause and Effect Relationship Model
• Balance in the Balanced Scorecard
• Balance Scorecard and the HR Scorecard
©Peopleplus 2010
- 3. Strategic Planning Process
FUTURE Vision
Mission
Objectives
Key Result Areas
Performance Indicators
PRESENT Strategies Action Program Activities Tasks Resources
S W
O
SWOT Analysis
T
PAST ©Peopleplus 2010
- 4. Problems of Strategy The Balanced
Implementation Scorecard is:
You can’t measure A
MEASUREMENT what you cannot Measurement
describe System
+
Alignment
You can’t manage A Strategic
MANAGEMENT what you cannot Management
measure System
Focus
+
You can’t A
COMMUNICATION communicate what Communication
you cannot describe Tool
“Measurement is the foundation of management.”
©Peopleplus 2010
- 5. Who are the different STAKEHOLDERS of
an Organization and What are they
Interested in?
©Peopleplus 2010
- 6. What is the Balanced Scorecard?
PROFITABLE The BSC
GROWTH Retains the
Financial traditional
Perspective financial
New Revenue Current Business Productivity Use of Assets measures
Customer Value Proposition
Customer Best in Best Total Best Total Cost
Perspective Product/Service Solution
The BSC links
the financial
Internal Product Customer Operational measures with
Perspective Innovation Intimacy Excellence the drivers of
future
performance
Learning Skills Technology Environment
and Growth
©Peopleplus 2010
- 7. Vision-Mission Barrier
Only 5% of the work force
understands the strategy
People Barrier
One of 4 managers have
BARRIERS incentives linked to strategy
STRATEGY TO
EXECUTION
Management Barrier
Strategy is not regularly
discussed and prioritized
Resource Barrier
Budgets not linked to strategy
Source: Kaplan & Norton ©Peopleplus 2010
- 8. Vision-Mission Barrier
Only 5% of the work force
understands the strategy
People Barrier
One of 4 managers have
BARRIERS incentives linked to strategy
STRATEGY TO
EXECUTION
Management Barrier
Strategy is not regularly
discussed and prioritized
Resource Barrier
Budgets not linked to strategy
Source: Kaplan & Norton ©Peopleplus 2010
- 9. Vision-Mission Barrier
Only 5% of the work force
understands the strategy
People Barrier
One of 4 managers have
BARRIERS incentives linked to strategy
STRATEGY TO
EXECUTION
Management Barrier
Strategy is not regularly
discussed and prioritized
Resource Barrier
Budgets not linked to strategy
Source: Kaplan & Norton ©Peopleplus 2010
- 10. Vision-Mission Barrier
The BSC overcomes Vision-
Only 5% of the work force Mission Barrier through the
understands the strategy translation of strategy
The BSC is a shared understanding of the Vision-Mission strategy
translated into:
Financial
Customer
Internal
Learning&Growth
©Peopleplus 2010
- 11. Vision-Mission Barrier
Only 5% of the work force
understands the strategy
People Barrier
One of 4 managers have
BARRIERS incentives linked to strategy
STRATEGY TO
EXECUTION
Management Barrier
Strategy is not regularly
discussed and prioritized
Resource Barrier
Budgets not linked to strategy
Source: Kaplan & Norton ©Peopleplus 2010
- 12. People Barrier
„cascading‟ the scorecard
One of 4 managers have overcomes the People Barrier
incentives linked to strategy
STRATEGY TOP-DOWN BOTTOM-UP
Profitable
Growth
employee
Financial
New Increase Efficie
Expand
Sources in nt Use
of
Revenue
Current
Business
Productivi
ty
of
Assets driving the sees his/her
strategy to contribution to
Customer Value
Proposition customer all the strategy
Product Service Image
Customer scorecard employees
at all levels “line of sight”
Understand Total
Efficient Use
New
Products
the
Customers
Solutions
Homebuilder
CRM. Productivity .
of Assets process
Internal scorecard
Increase Employee
Competence
• Employee • Revenue per
Satisfaction Employee personal
Learning& scorecard
Skills Systems Align Personal Goals
Growth alignment and focus
©Peopleplus 2010
- 13. Vision-Mission Barrier
Only 5% of the work force
understands the strategy
People Barrier
One of 4 managers have
BARRIERS incentives linked to strategy
STRATEGY TO
EXECUTION
Management Barrier
Strategy is not regularly
discussed and prioritized
Resource Barrier
Budgets not linked to strategy
Source: Kaplan & Norton ©Peopleplus 2010
- 14. Management Barrier
strategic learning overcomes the
Strategy is not regularly Management Barrier
discussed and prioritized
The Balanced Scorecard translates the vision and strategy into a
coherent set of measures in four balanced perspectives
Strategy Map Objective Measure Target Initiative
• Grow • Annual • Marketing
Financial Revenue Revenue Gross +30% program
Growth from new Sales
products The Balanced
Customer New Products
• Satisfy • Customer • CRM Scorecard
Customer Profitability +20% Program
Needs describes how
Internal World-Class • Fast Time to • Time to from 9 • Cycle Time the strategy will
Product Market Market down to Reengineering
Development 6 months be executed
Learning &
• Acquire, • Staff • Skills
Growth Highly Skilled
Develop Competence 90% Development
Workforce
Skills Program
©Peopleplus 2010
- 15. Vision-Mission Barrier
Only 5% of the work force
understands the strategy
People Barrier
One of 4 managers have
BARRIERS incentives linked to strategy
STRATEGY TO
EXECUTION
Management Barrier
Strategy is not regularly
discussed and prioritized
Resource Barrier
Budgets not linked to strategy
Source: Kaplan & Norton ©Peopleplus 2010
- 16. Resource Barrier
Strategic Resource Allocation
Budgets not linked to strategy overcomes the Resource Barrier
Financial
Customer
Internal
Learning&Growth
Budget
linked to the
strategy
©Peopleplus 2010
- 17. Resource Barrier
Strategic Resource Allocation
Budgets not linked to strategy overcomes the Resource Barrier
Selecting and Managing Initiatives
1 Other CRM SCM
projects
On-going & proposed SRM
CSR
strategic initiatives re- TQM
examined JIT,QDP
Marketing
Projects
2
Screen, assess, and identify
“Linked and Strategic”
CRITERIA:
initiatives
Balanced Scorecard strategies should
be linked to the
3 overall strategic
Select strategic initiative that goals
will grow the enterprise List of Priorities
©Peopleplus 2010