1. Book Review by Manjari Agrawal
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20th June 2012

2. About the Authors
Translating Strategy into Action
David P. Norton Robert S. Kaplan
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3. Definition
Balance Scorecard is a
management tool that
provides stakeholders with a
comprehensive measure of
how the organization is
progressing towards the
achievement of its strategic
goals.
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4. Why Do We Need a Balanced Scorecard?
“Business Strategy is now the
single most important issue…
and will remain so for the next
five years”
Business Week
“Less than 10% of
strategies effectively
formulated are
effectively executed”
Fortune
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5. The Vision Barrier
Only 5% of the work force
understands the strategy
The Management Barrier
85% of executive teams
spend less than one hour per
month discussing strategy
60% of organizations don’t
link budgets to strategy
The Resource Barrier
9 of 10 companies
fail to execute
strategy
The People Barrier
Only 25% of managers have
incentives linked to strategy
Four Barriers to Strategic Implementation
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6. Balanced Scorecard Pyramid
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7. Translating Vision and Strategy: Four Perspectives
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8. Implementation Steps
1. Initiative must start at the top
2. Requires teamwork, collaboration
3. Interview senior managers
4. Gain consensus
5. Expand consensus
6. Selection of metrics
7. Roll-out
8. Periodic reviews
9. The scorecard evolves with the organization
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9. BSC Team Roles
• Assumes ownership
• Provide Information on strategy and methodology
• Commit resources
Executive
Sponsor
Champion
Team
Members
Organization
Change
Expert
• Ensure all relevant material is available to team.
• Facilitates the development of an effective team
through coaching and support.
• Provide knowledge of business unit/ function
• Act as BSC ambassadors within their business
units.
• Increase awareness of organizational change
issues.
• Investigates change affecting the BSC project.
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10. Selection Criteria for Performance Measurements
Relevant
Measurable
Actionable
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11. How many measures on a Balanced Scorecard ?
Between 4 to 7
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12. Seven ingredients of successful Balanced Scorecard
1. A Process to Mobilize the Organization and Lead Ongoing
Change
2. Scorecards That Describe the Strategy
3. Linking Scorecard to Create an Organization Alignment
4. Continuous Communication to Empower the Workforce
5. Aligning Personal Goals, Incentives, and Competencies With
the Strategy
6. Aligning Resources, Budgets and Initiatives With the Strategy
7. A Feedback Process That Encourages Learning and
Experience Sharing
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13. The Road to Disaster
1. Senior management not
committed
2. Lack of consensus
3. Consultants
4. Failure to communicate
5. Lack of “push-down”
6. Only few individuals involved
7. Static not dynamic
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14. Sample Metrics for an ITES Company
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15. Company Strategy – Sample Scorecard
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16. 16
Success Stories
Commercial
Vehicle Business
Unit
2000
to
2002
# 40% Increase in Revenue
Lakshmi
Machine
Works Limited
2004
to
2008
Revenue Profit
$120M
to
$504M
$8.8M
to
$84.8M
TNT Express
Services
UK & Ireland
2007
to
2009
# On time delivery increased by 5%
# Market share increased by 14%%
# Employee retention increased by 66%

17. Companies which Implemented Balanced Scorecard
About 50% of Fortune 1000 companies in North America and about 40%
of those in Europe use the Balanced Scorecard (Fortune 2002)
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