1. “A Balanced Scorecard system provides a basis for
executing good strategy well and managing change.”
– Howard Rohm, CEO of Balanced Scorecard Institute
This information is confidential and was prepared by Conjunct Consulting for trainingpurposes; it is not to be relied on by any 3rd Party without our prior written consent.
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2. Agenda
1. Insights from Leadership Retreat
2. Why Balanced Scorecard
3. Introduction to Balanced Scorecard
4. Implementation overview and
timeline
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3. Agenda
1. Insights from Leadership Retreat
2. Why Balanced Scorecard
3. Introduction to Balanced Scorecard
4. Implementation overview and
timeline
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4. We have already achieved broad alignment
on most crew priorities
Crew
External
Affairs
Goal A
Attract right people (students and
profs)currently not in C2 through
media channels
Development Manage coherent training syllabus
across all volunteers (consultants,
leaders and professionals)
Partners
Select right project partners and
prep partner for success
Goal B
Attract right clients through media
channels
Goal C
Attract right donors
(foundations, sustained giving,
public)
Develop content and experiential Manage and train all trainers
learning for both hard and soft skills (internal and external crew)
Oversee and manage project
Ensure long-term, win-win
teams to generate sound
anchor relationships with
recommendations
partners
Finance &
Plan budget, control costs and
Track, project and publish
Ensure charity and IPC financial
Impact
ensure financial documents are in
financials, impact and social return standards
order
on investment
Internal
Innovating by identifiying, building
Structuring and auditing cross-crew Managing and simplifying
Affairs
and refining systems to increase org and in-crew processes for
logistics
effectiveness
efficiency and complexity-reduction
Professionals Filter and match professionals to PA Engage and retain alumni and
Develop and maintain
openings and Hub Leader openings professional members through
partnerships with corporate and
community events
government organizations
Sustainable Unify, improve, and execute on
Coach, nurture and match future
Communicate and align
Leadership
selection criteria and chapter
leaders through feedback loops and volunteers on org vision,
election processes based on org
identification of upcoming and
strategy and values through
values and social impact
current hub leadership gaps
retreats, community events and
mentorships
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5. Insights from Leadership Retreat (Jan 2014)
Desires expressed during Leadership Retreat:
1. Effective communication of strategy and
strategic priorities across the organization
2. Increased alignment of priorities across crews
to facilitate effective collaboration
3. Improved communication and understanding of
how Conjunct is performing (e.g. financially,
operationally)
Implementation of Balanced Scorecard
methodology to address the above concerns
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6. Agenda
1. Insights from Leadership Retreat
2. Why Balanced Scorecard
3. Introduction to Balanced Scorecard
4. Implementation overview and
timeline
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7. Traditional financial-focused models of
performance management are inadequate
• Traditional financial measures report on what happened
last period without indicating how managers can
improve performance in the next.
• Financial measures are the result, not a driver, of
performance
• “If you can’t measure it, you can’t manage it”
Organizations often fail to look at the full range of
activities that result in superior performance.
• Balanced scorecard functions as the cornerstone of a
company’s current and future success
• Serves as the focal point for the organization’s efforts,
defining and communicating priorities to managers,
employees, financial supporters, even customers
Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993)
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8. More executives are focusing on leading
rather than lagging indicators of growth
80 percent
68 percent
of executives believe
innovation is more important
than cost reduction for longterm success.
of respondents believe that
taking care of customers and
employees should come before
profitability.
Executives realize that growth depends on
having happy, productive employees and
satisfied customers. Profits will be the natural
by-product.
Source: Bain and Company, Management Tools and Trends (2011)
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9. Balanced Scorecard methodology (BSC) was
created as a better alternative to traditional
performance management tools
Provides executives with
a comprehensive
framework to focus
strategic vision
Translates a company’s
strategic objectives into
a coherent set of
performance measures
• Aligns priorities across decentralized
organizations
• Maintains focus on the key drivers of growth
Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993)
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10. BSC is a credible and well-researched
strategy implementation tool
• Drs. Kaplan and Norton (Harvard Business School)
developed this approach to strategic management
in the early 1990’s and its use has been tracked at
hundreds of companies worldwide.
• Over 60% of companies in the Fortune 500 use BSC
e.g. Sears, Citicorp, AT&T etc.
• Most widely adopted strategy implementation
framework reported in the 2010 annual survey of
management tools undertaken by Bain and Co:
among 11,000 respondent companies, 65% of
respondents use the tool
• Not-for-profits are the largest growth segment of
companies beginning to adapt the approach
Source: McArdleRamerman Center, The Balanced Scorecard Discipline
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11. Companies that use the BSC report higher
effectiveness and better results
• Organizations that use a Balanced Scorecard approach
tend to outperform organizations without a formal
approach to strategic performance measurement
• World-class companies are 159% more likely to have
mature BSC in place than less successful organizations
• Among 164 publicly traded companies, those with welldeployed BSC outperformed the control group by nearly
30% (Advances in Accounting, 2008)
• Organizations using BSC outperform the other
companies by about 100 percent in having everyone in
the organization understand what the organization's
strategy is (Norton, The Strategy-Focused Organization,
2000)
Source: Advanced Performance Institute: What is a Balanced Scorecard? (2014),
The Advisory Board Company (2013), Norton, the Strategy-Focused Organization
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12. Agenda
1. Insights from Leadership Retreat
2. Why Balanced Scorecard
3. Introduction to Balanced Scorecard
4. Implementation overview and
timeline
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13. BSC focuses on 4 aspects: Financial, Customers,
Learning & Growth, Internal processes
Leading
How will we sustain
our ability to change
and improve?
Learning
& Growth
Internal
processes
What
business
processes
must we
excel at?
Leading
Source: Kaplan and Norton, The Balanced Scorecard (1996)
Initiatives
Vision &
Strategy
For each aspect, the
following table is used
to drive continuous
improvement
Targets
Customers
Financial
How should we
appear to our
financial supporters?
Lagging
Objective
s
Measures
Leading
How should
we appear
to our
customers?
1
.
2
.
3
.
4
.
5
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14. The BSC Strategy Map outlines how the four
perspectives support each other
Source: Advanced Performance Institute: What is a Balanced
Scorecard? (2014)
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15. BSC Strategy Map adapted for the nonprofit
sector
Format 1
Format 2
1.
2.
3.
Format 3
BSC strategy map has found
widespread use in the public and
not-for-profit sector
It is important to make a few
changes, esp. moving the financial
perspective from top spot on the
strategy map template since,
while finance is important, it is
usually not the overall reason why
the organization exists
Instead, the main objective of
public sector, government and notfor-profit organizations is to deliver
services to their key stakeholders.
This perspective usually sits at
the top of the template to
highlight the key stakeholder
deliverables and outcomes
Source: Advanced Performance Institute: What is a Balanced
Scorecard? (2014)
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16. Agenda
1. Insights from Leadership Retreat
2. Why Balanced Scorecard
3. Introduction to Balanced Scorecard
4. Implementation overview and
timeline
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17. To implement the BSC effectively, a
structured approach must be taken
1.
2.
3.
4.
5.
6.
7.
8.
Articulate the business’s vision and strategy
Identify the performance categories that best link the business’s
vision and strategy to its results (such as financial performance,
operations, innovation, employee performance)
Establish objectives that support the business’s vision and
strategy
Develop effective measures and meaningful standards,
establishing both short-term milestones and long-term targets
Ensure companywide acceptance of the measures
Create appropriate budgeting, tracking, communication and
reward systems
Collect and analyze performance data and compare actual results
with desired performance
Take action to close unfavorable gaps
Source: Bain and Company, Management Tools and Trends (2011)
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18. A structured approach must be taken to ensure
companywide acceptance of the measures
1. Obtaining manager sponsorship and employee
commitment at all levels
2. Involving a broad base of leaders, managers and
employees in scorecard development
3. Agreeing on terminology and process for the
organisation
4. Choosing influential balanced scorecard champions at
each level
5. Starting with and maintaining good two-way
communication
6. Working through vision, mission, values and strategy
mapping before rushing to measures and initiatives
Source: Stellar leadership: Introduction to the Balanced Scorecard for
the Nonprofit sector
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19. Benchmarking helps to put key performance
metrics in context for strategic management
1.
2.
3.
4.
5.
Select a product, service or process to benchmark
Identify the key performance metrics (BSC)
Choose companies or internal areas to benchmark
Collect data on performance and practices
Analyze the data and identify opportunities for
improvement
6. Adapt and implement the best practices, setting
reasonable goals and ensuring companywide
acceptance
Source: Bain and Company, Management Tools and Trends (2011)
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20. Immediate action steps to effective
implementation of the BSC Strategy Map
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Articulate the business’s vision and strategy – DONE?
Agree on scope, terminology and ownership of processes – DONE?
Obtain management commitment to implementation of the BSC
Identify an influential BSC sponsor in each crew. Together, these will form the BSC Steering
Committee who will champion and develop the Balanced Scorecard
BSC SteerCo to develop the strategy map
Obtain management commitment to the strategy map
Communicate strategy map across the organization
BSC SteerCo to develop objectives
Obtain management commitment toobjectives
Communicate objectives across the organization
BSC SteerCo to develop key performance measurements
Obtain management commitment tokey performance measurements
Communicate key performance measurements across the organization
BSC SteerCo to develop targets for key performance measures
Obtain management commitment to targets for key performance measures
Communicatetargets for key performance measures acrosstheorganization
Gather data on current key performance measures
Communicate data on key performance measures with management
Management to develop initiatives to close the gap between current performance and targets for key
performance measures
Communicate initiatives across the organiztion
Source: Bain and Company, Management Tools and Trends (2011)
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21. Case Study: Apple Computer, Inc.
• Developed BSC to focus senior management on
a strategy that would expand discussions
beyond gross margin, return on equity, and
market share
• Formed a small steering committee intimately
familiar with the deliberations and strategic
thinking of Apple’s Executive Management Team
• The five performance indicators at Apple are
benchmarked against best-in-class
organizations. Today they are used to build
business plans
Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993)
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22. Case Study: Apple Computer, Inc. – 5
Balanced Scorecard priorities, in order
1. Customer Satisfaction
• Historically, Apple had been a technology- and product-focused company that competed by designing
better computers. Customer satisfaction metrics were introduced to orient employees toward
becoming a customer-driven company
2. Core Competencies
• Company executives wanted employees to be highly focused on a few key competencies: for example,
user-friendly interfaces, powerful software architectures, and effective distribution systems.
3. Employee Commitment and Alignment
• Apple conducts a survey every two years to understand how well employees understand the company’s
strategy as well as whether or not they are asked to deliver results that are consistent with that
strategy
4. Market Share
• Achieving critical threshold of market share was important not only for the obvious sales growth
benefits but also to attract and retain software developers to Apple platforms.
Shareholder Value
• Included even though this is a result – not a driver – of performance. Intended to offset the previous
emphasis on gross margin and sales
Source: Harvard Business Review, Putting the Balanced Scorecard to Work (1993)
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