1. © Friedag 2011 How to improve Future with the BSC Strategy development and implementation with the Balanced Scorecard [BSC]

2. © Friedag 2011 They must often change who would be constant in happiness or wisdom. ___________________ Confucius

4. Publications © Friedag 2011 Total number of copies > 75.000 in CZ, D, FIN, PL, RUS 2000, 2002, 2004 1999, 2000, 2002 2001 2003 2005 2004 2002, 2003, 2005, 2011 2009

5. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

6. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

11. © Friedag 2011 The future has many names. For the weak, it is the unreachable. For the fearsome, it is the unknown. For the brave, it is the chance. ___________________ Victor Hugo

12. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

14. Strategy as part of a holistic management Strategic potentialities as i nput-parameters for results and finance/liquidity; the Balanced Scorecard as tool to work out and implement the company‘s strategy. Assets . Strategy Result Finance Potential planning with e.g. Balanced Scorecard etc. Controller as a Strategy moderator / consultant Profit planning with e.g. Contribution margin accounting etc. Controller as a mediator between internal and external accounting Finance planning with e.g. Free Cash Flow- accounting etc. Controller as a manager of the stakeholder interests Logic of the decision Logic of the tools liabilities G D P FA WC Equ Dbt

15. © Friedag 2011 Expenditures Accrual of money Potentials Possibilities + competencies What is strategic, what is operational ? Accrual of potentials to do ? to do nothing ? long-term ? short-term ? develop exploit Orders / Sales Use capacities Quality assurance Employee engagement Safeguarding liquidity Partner engagement Marketing Develop capacities Quality potential HR competences Investor Relations Partnership strategic operational

16. Aspects of the development of potential © Friedag 2011 orientation by objectives financial resources motivation for implementation x x economic force time resources x

17. © Friedag 2011 Only the one who possesses a strategy, can implement it. Therefore: The one who wants a Balanced Scorecard has to start with the strategy! Kaplan/Norton Balanced Scorecard: translate strategy into action!

18. How do we proceed ? Strategy-development Strategy- Use (Integration in the management cycle) Mission* Tasks - strategic challenge Corporate Policy Orientation Strategy- implemen-tation running business middle term planning / Budget / Profit / Liquidity Balanced Scorecard Vision* Closeness => Bearing business idea * long-time Strategic House Strategic projects Business model Reporting Scorecard

21. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

22. What is a Balanced Scorecard ? © Friedag 2011 The Balanced Scorecard is a universal tool to align the acting of a group of people toward a joint objective. subjective: What are we ready to do and will we take over the responsibility? objective: What objectives and tasks do we want to commit ourselves to?

23. Steps to a BSC-development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VI. Arrange the BSC into the process of leading VII. Organize learning process Communication

24. Steps to a BSC- development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VI. Arrange the BSC into the process of leading VII. Organize learning process Communication

29. Vision © Friedag 2011 What do we want to achieve ? We are becoming technological market leader The vision is destined for our company‘s employees. It matches our values that are exemplified through our own life.

30. Mission statement © Friedag 2011 Why shall people be our customers ? We are worldwide leading innovative supplier of rear-view mirrors. The mission statement aims at the memory of our potential customers / partner. With the mission statement we raise expectations that we have to meet.

32. Agreement on objectives © Friedag 2011 worldwide leading innovative supplier of rear-view mirrors We are becoming technological market leader number of jointly (with customers) developed innovations vision mission statement leading indicator

34. © Friedag 2011 When there is no agreement in principle, then it is senseless to scheme. ___________________ Confucius

35. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

36. Steps to a BSC- development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VI. Arrange the BSC into the process of leading VII. Organize learning process Communication

38. Strategic topics © Friedag 2011 Perspectives what shall we do now? extension of local presence entry into chinese market trade volume image jointly developed innovations # of projects higher revenue extension of sales dept. sale potential objective strategic topic Indicator Perspectives worldwide leading innovative supplier we are becoming technological market leader number of jointly developed innovations customer retention Customers new contracts dedication employees CIP-Groups reliability processes error ratio (ppm) reliability partners audits cost consciousness fin. & controlling Cash Flow

39. Perspectives for the stakeholder © Friedag 2011 Perspectives With whom and for whom do we intend to do it ? extension of local presence entry into chinese market trade volume image jointly dev. innov. # of projects higher revenue extension of sales dept. sale potential objective strategic topic Indicator CIP = continuous improvement process worldwide leading innovative supplier we are becoming technological market leader number of jointly developed innovations Perspectives Cost consciousness fin. & controlling Cash Flow reliability Partners Audits dedication employees CIP-Groups Customer retention Customers New contracts

40. Our strategic frame © Friedag 2011 Perspectives extension of local presence entry into chinese market trade volume higher revenue extension of sales dept. sale potential objective Strategic topic Indicator image jointly developed innovations # of projects worldwide leading innovative supplier we are becoming technological market leader number of jointly developed innovations Perspectives Cost consciousness fin. & controlling Cash Flow Reliability Partners Audits dedication employees CIP-Groups Customer retention Customers New contracts

43. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

44. Steps to a BSC- development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VI. Arrange the BSC into the process of leading VII. Organize learning process Communication

45. © Friedag / Lewandowska 2008 It is only through the concrete, daily actions of all the employees in a company that potentials can be developed . © Friedag 2011 Kaplan/Norton Translate strategy into action!

47. Define objective-orientated actions © Friedag 2011 Perspectives extension of local presence entry into chinese market trade volume higher revenue extension of sales dept. sale potential objective Strategic topic Indicator image jointly developed innovations # of projects O bjective: create enthusiasm at the customers A ction: customer visits approx. 8 weeks after first delivery: „Any problems ?" I ndicator: number of visited customers worldwide leading innovative supplier we are becoming technological market leader number of jointly developed innovations Perspectives Cost consciousness fin. & controlling Cash Flow reliability Partners Audits dedication employees CIP-Groups Customer retention Customers New contracts

48. Create objective-orientated actions © Friedag 2011 Perspectives extension of local presence entry into chinese market trade volume higher revenue extension of sales dept. sale potential objective Strategic topic Indicator image jointly developed innovations # of projects O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator worldwide leading innovative supplier we are becoming technological market leader number of jointly developed innovations Perspectives Cost consciousness fin. & controlling Cash Flow Reliability Partners Audits dedication employees CIP-Groups Customer retention Customers New contracts

49. So many OAI´s © Friedag / Lewandowska 2008 © Friedag 2011

50. For each development field of the company there have to be developed actions supporting the achievement of the goals. © Friedag / Lewandowska 2008 Example: customers O bjective: awake enthusiasm among customers A ction: customer visits approx. 8 weeks after first delivery: „Any problems ?" I ndicator: number of visited customers S 1 Work group: OAI © Friedag 2011

52. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

53. Steps to a BSC- development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VI. Arrange the BSC into the process of leading VII. Organize learning process Communication

54. IV Implement strategic projects © Friedag 2011 Perspectives extension of local presence entry into chinese market trade volume higher revenue extension of sales dept. sale potential objective Strategic topic Indicator image jointly developed innovations # of projects O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective A ction I ndicator O bjective P roject I ndicator O bjective P roject I ndicator O bjective P roject I ndicator O bjective P roject I ndicator O bjective P roject I ndicator O bjective P roject I ndicator O bjective P roject I ndicator worldwide leading innovative supplier we are becoming technological market leader number of jointly developed innovations Perspectives Cost consciousness fin. & controlling Cash Flow Reliability Partners Audits dedication employees CIP-Groups Customer retention Customers New contracts

57. Steps to a BSC- development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VI. Arrange the BSC into the process of leading VII. Organize learning process Communication

58. V. Reporting components of the BSC © Friedag 2011 Project- indicators Indicators of the BSC-house strategic and operational indicators for internal control strategic and operational indicators for external reporting Leadership-Scorecard Reporting-Scorecard

59. Reporting with the Leadership-Scorecard – what do we do ? © Friedag 2011

60. Reporting - Scorecard © Friedag 2011 Main corporate indicators (Development and exploitation of potentialities) Early indicators Late indicators Development of potentialities Exploitation of potentialities

61. Steps to a BSC- development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VII. Organize learning process Communication VI. Arrange the BSC into the process of leading

62. VI Arrange the BSC into the process of leading © Friedag 2011 Strategy Leading- Scorecard Team objectives Reporting- Scorecard Operational objectives Sustainable success of the organization Acting Transparency Each area defines for itself how they can support the vision

64. Diffusion of the BSC into the company © Friedag 2011 strategic operational ealry late contribution strategic operational early late contribution strategic operational early late

65. Steps to a BSC- development and -implementation © Friedag 2011 I. Identification of objectives (Mission, vision, leading indicators) II. Develop strategic action frame III. Complete action frame with actions (collect ideas) IV. Bundle actions into strategic projects V. Reporting with the Balanced Scorecard VII. Organize learning process Communication VI. Arrange the BSC into the process of leading

67. © Friedag 2011 The balanced scorecard puts strategy – not control – at the center ___________________ Kaplan / Norton (1992)

68. Strategy development and implementation with the Balanced Scorecard © Friedag / Lewandowska 2008 01 Introduction 02 The bases of securing the company’s future 03 What is a BSC ? 04 Approach for an objective system 05 OAI– strategic actions 06 Organising the work 07 Conclusions Agenda © Friedag 2011

72. © Friedag 2011 Welcome to the Future! Strategydevelopment and -implementation with the Balanced Scorecard [BSC]