Bsc european persp

t:m tyler mangan
clear thinking:decisive action

The Balanced Scorecard: A European Perspective
Jonathan Chocqueel-Mangan
26th September 2001

© 2001, Tyler Mangan Limited

t:m

My objective today is to examine the Balanced Scorecard phenomenon from a European perspective
• How has the Balanced Scorecard evolved in Europe compared to the US? • Why have some differences come about? •What are the Critical Success Factors for Balanced Scorecard implementation in Europe? • How might the Balanced Scorecard evolve in Europe over the next few years? t:m

© 2001, Tyler Mangan Limited

2

Early Balanced Scorecards focused on measurement
Causality is shown between perspectives
Financial Objectives
F1 - Increase return on spending F2 - Achieve profitability F3 - Shift frominterest income F4 - Maintain moderate growth

Customer Objectives
C1 - Provide Meaningful value proposition C2 - Have knowledgeable people C3 - Offer convenient access C4 - Serve with reliability/availability C5 - Be responsive C6 - Execute with no defects/errors

Internal Objectives
I1 - Segment and target customer base I2 - Create offerings to satisfy customer needs I3 - Cross-sell ourproducts I4 - Provide service & quality excellence I5 - Focus resource allocations

Learning & Growth Objectives
L1 - Create a sense of urgency L2 - Link accountability & reward to business objectives L3 - Build customer information into an asset L4 - Develop marketing & sales skills & competency

Banking Example
© 2001, Tyler Mangan Limited

3

t:m

Insights rapidly led to the alignmentof measures
Strategic Objectives • Return on Capital
Financial ROCE Project Profitability Forecast vs Budget Backlog

FINANCIAL

• Cash Flow • Project Profitability • Reliability of Performance • Competitive Price (Tier II) • Value for Money (Tier I)

Cash Flow

Customer

Customer/ Market Rating Customer Satisfaction

• Hassle Free Relationship • High Performance Professionals •Innovative • Shape Customer Requirement • Tender Effectiveness
Project Performance Index Rework Safety/ Loss Control Tender Success Rate

Market/ Account Share

Causality is shown by linkages between the CUSTOMER selected measures

Price Index

INTERNAL
# Hours w/Prospect

Internal

• Quality Service • Safety/Loss Control • Superior Project Mgmt. • Continuous Improvement

CloseoutCycle

Strategic Objectives are Product developed from •a & Service Innovation Strategy based onEmpowered Workforce • a corporate vision
Growth

Revenue per Employee Continuous Improvement Index Staff Suggestions Staff Attitude Survey New Product Revenue

LEARNING

Engineering Example
4

© 2001, Tyler Mangan Limited

t:m

The next step was the increasing importance of the ‘StrategyMap’
Financial
Capture maximum share of non-pharma health care savings

Meet earnings targets

Minimise aggregate forward liabilities Achieve acceptable net margins Meet investment criteria on project basis

Be supplier of choice

Customer
Establish and promote acceptable corporate image Be perceived as capable of delivering DM in market Market desirable product/service offeringCausality is shown by linkages between the objectives

Internal Processes

Develop and manage BIoN image

Develop service offerings

Demonstrate robust proof of concept

Build relationships

Understand customer needs

Develop negotiations/pricing facility

Align organisation as distinct entity

Identify, select and run pilots

Risk management

Learning & Growth

Clarifyorganisational structure

Build/support entrepreneurial/ service culture

Develop knowledge sharing mechanisms

Develop core skill set

Healthcare Example
© 2001, Tyler Mangan Limited

5

t:m

More recently we have started to break the strategy map into themes
Financial
Maximize returns Grow Revenue Leverage asset base Manage operating costs

Customer Business, Residential
Innovative...