“Money isn’t Everything” - I knew we were in trouble As soon as he said- “Money isn’t Everything” - I knew we were in trouble

It is important to focus on the means used to achieve the ends … … It is important to focus on the means used to achieve the ends … …..not just on the ends themselves… To only focus on traditional financial accounting measures (such as ROI, ROE, EPS…) …..does not give mgt the whole picture….

Performance needs to be judged thru mix of: financial measures…. & - non-financial measures …which drive financial outcomes Will Make $$$ - if sell product Will sell product if consumer wants, knows about , can get, & LIKES product To achieve “above’ everyone must effectively do their job To effectively do job must know what to do

Strategic Thinking- the ten big ideas 9 9. Metrics that matter Balanced score card- a system that attempts to balance financial performance w/ consideration of: customer's perspective learning & growth perspective & internal business processes perspective

What is measured gets noticed What is noticed gets acted on What is acted on gets improved Today … Vast majority Fortune 1,000 Companies utilize a Balanced Scorecard to help manage performance— because…..

Customer… Business Processes…Learning & Growth For Each Perspective: Financial… Objectives Measures Targets Initiatives Responsibility Budget 1. 2. 3. Customer… Business Processes…Learning & Growth

Basic Scorecard Terminology (Southwest Airlines Example) Strategy Map Strategic Theme: Operating Efficiency Measures How performance is measured against objectives Targets The level of performance or rate of improvement needed InitiativesKey action programs required to achieve targets Objectives: What the strategy is trying to achieve Profits and RONA Financial Grow Revenues Fewer planes Attract & Retain More Customers Customer On-time Service Lowest prices Objectives Fast ground turnaround Measures Targets Initiatives Internal Fast ground turnaround On Ground Time On-Time Departure 30 Minutes 90% Cycle time optimization Learning Ground crew alignment 17

A Complete Scorecard is a Program for Action Strategic Theme: Operations Excellence Objectives Measures Targets Initiatives Strategic Theme: Operating Efficiency Profits and RONA Financial Profitability Grow Revenues Fewer planes 30% +/yr 20% 5% Grow Revenues Fewer planes Attract & Retain More Customers More Customers Flight is on -time Lowest prices # Customers FAA On Time Arrival Rating Market Survey 12% growth Ranked #1 Customer loyalty program Quality management Customer On-time Service Lowest prices Internal Fast ground turnaround On Ground Time On-Time Departure 30 Minutes 90% Cycle time optimization Fast ground turnaround Ground crew alignment % Ground crew trained % Ground crew stockholders yr. 1 70% yr. 3 90% yr. 5 100% Ground crew training ESOP Learning Ground crew alignment 17

Partnering & the Balanced Scorecard

Capstone's Balanced Scorecard

  Video How to use The Capstone Balanced Scorecard

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