1. Balanced Scorecard translating strategy into action February 22, 2012

2. 2 “Figuring out the right things to do isn’t nearly as difficult as continuing to do them over the long term.” Our webinar will begin in a few minutes.

3. February 22, 2012 Balanced Scorecard translating strategy into action

4. 4 Our webinar will begin in a few minutes. “Remember: The problem for most of us isn’t knowing what to do… it’s doing it.”

5. February 22, 2012 Balanced Scorecard translating strategy into action

6. 6 Our webinar will begin in a few minutes. “The greatest attribute for any business leader is perseverance.”

7. February 22, 2012 Balanced Scorecard translating strategy into action

8. 8 Our webinar will begin in a few minutes. “All organizations are perfectly designed to get the results they are now getting. If we want different results, we must change the way we do things.” Tom Northup

9. February 22, 2012 Balanced Scorecard translating strategy into action

10. 10 Our webinar will begin in a few minutes. “It’s useful to think of excellence in two broad categories: Customer excellence and business excellence.”

11. February 22, 2012 Balanced Scorecard translating strategy into action

12. 12 Our webinar will begin in a few minutes. “Satisfied customers drive business success – and business success enables investment to satisfy customers.”

13. February 22, 2012 Balanced Scorecard translating strategy into action

14. 14 Our webinar will begin in a few minutes. “ Excellence is not a destination; it is a continuous journey that never ends.” Brian Tracy

15. February 22, 2012 Balanced Scorecard translating strategy into action

16. 16 Our webinar will begin in a few minutes. “ We are what we repeatedly do. Excellence, then, is not an act but a habit.” Aristotle

17. February 22, 2012 Balanced Scorecard translating strategy into action

18. 18 Our webinar will begin in a few minutes. “People go in the direction leadership is walking, not pointing.”

19. February 22, 2012 Balanced Scorecard translating strategy into action

20. 20 Our webinar will begin in a few minutes. “Every job is a self-portrait of the person who does it. Autograph your work with excellence. “ Unknown

21. February 22, 2012 Balanced Scorecard translating strategy into action

22. 22 Our webinar will begin in a few minutes. “Excellence is doing ordinary things extraordinarily well." John W. Gardner

23. February 22, 2012 Balanced Scorecard translating strategy into action

24. 24 Our webinar will begin in a few minutes. “Discipline is the bridge between goals and accomplishments.” Jim Rohn

25. February 22, 2012 Balanced Scorecard translating strategy into action

26. 26 Our webinar will begin in a few minutes. "Measure is the ability to mesh strategy with reality, align people with goals, and achieve the promised results.“ Larry Bossidy

27. February 22, 2012 Balanced Scorecard translating strategy into action

28. 28 Our webinar will begin in a few minutes. “The strategic agenda demands discipline and continuity; its enemies are distraction and compromise.” Michael E. Porter

29. February 22, 2012 Balanced Scorecard translating strategy into action

30. 30 Our webinar will begin in a few minutes. “One of the major barriers to achieving lasting excellence is how little formal effort organizations put into learning how to execute strategy.”

31. February 22, 2012 Balanced Scorecard translating strategy into action

32. 32 Your Presenter Matt Lauth Managing Partner Strategy Execution Advisors Certified Business Coach

33. Balanced Scorecard 33 Join me to find out how the Six Disciplines Program makes creating and managing the business through balance scorecards easy. During this webinar you'll learn: 1. What is a Balanced Score Card? 2. Where does it fit in the overall management of performance in my organization? 3. Why is it important? 4. How do I go about creating one? 5. How do I use it to manage the business? This is 1 hour of your time that will give you the information needed to implement a system to ask for and get candid feedback to help every member of the organization improve their personal performance.

34. 34 Poll Questions

35. 35 What is a Balanced Score Card? The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It’s a performance measurement framework that adds strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. Source: http://www.balancedscorecard.orghttp://www.balancedscorecard.org

36. 36 Balanced Scorecards are created as part of Discipline II – Set Goals that Lead They are used during daily, weekly, monthly and quarterly reviews to manage the execution.

37. 37 SOURCE: Hendricks, K.B. and Singhal, V.R. (1999). What It Takes Is Known Systematic Approaches Grow Assets 135% faster US Research: 600 WW Excellence Programs, 5 years

38. 38

39. A Little Background 39 Industrial Age: Manage “things” Things cost money Primary focus of managing the business was financial Labor was cheap – relative to other costs Information Age: Leading people Importance of process – quality, speed, productivity Customer focus Manage “things” done through managing processes Focus on managing the business needs to be balanced Cost of customer acquisition and labor are often two largest investments

40. The Balanced Scorecard 40

41. 41 © 2004-2007 Six Disciplines, LLC All Rights Reserved.

42. 42 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 42 Measurement is the language that gives clarity to vague concepts. Measurement is used to communicate, not to control. Strategy can be described as a series of cause and effect relationships Financial Perspective "To succeed financially, how should we appear to our stakeholders?” Customer Perspective “ To achieve our vision, how should we appear to our customers?” Internal Process Perspective "To satisfy customers, and stakeholders, which internal business processes are critical? People and Knowledge Perspective "To achieve our vision, how will we sustain our ability to change and improve?” Outcomes Drivers The Balanced Scorecard Provides a Framework to Translate the Vision and Strategy into Operational Terms Across Four Business Perspectives …

43. 43 Balanced Score Card Strategy Map

44. 44 “Natural Cause and Effect Logic” of Business Performance To Build the Strategic Capabilities… Needed to Deliver Unique Sets of Benefits to Customers... To Drive Financial Success... And Realize the Vision Equip Our People... Financial Results Customer Benefits Internal Capabilities Knowledge, Skills, Systems, and Tools

45. 45 Illustrative Example: Southwest Airlines The Balanced Scorecard Should Tell the Story of the Strategy Strategic Theme: Operational Excellence Financial Learning & Growth Lowest Prices Flights On Time Align Ground Crew Add More Customers Use Fewer Planes Increase Profitability Provide Fast Ground Turnaround Customer What will drive operating efficiency? More customers on fewer planes How will we do that? Attract targeted customer segments that value price and on-time arrivals What must the internal focus be? Fast ground turnaround Will our people do that? Educate and compensate ground crew regarding how they contribute to the firm’s success Employee stockholder program Internal

46. 46 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Cascading Scorecards

47. 47 © 2004-2007 Six Disciplines, LLC All Rights Reserved. What are the barriers? Process – how and when to create scorecards; how do they fit into overall management processes of the organization. Expertise – ensuring someone is knowledgeable about the process and can manage to completion. Time – not in our plans, don’t have time. Economics “Money” – starting from scratch makes Balanced Scorecards time consuming and expensive. Human Behavior – “I know I should, but I don’t.

48. 48

49. 49 © 2004-2007 Six Disciplines, LLC All Rights Reserved. BSC - Piece of a Larger Process Where What How Who When This is where balanced scorecards (BSC) fit in.

50. 50 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 50 Six Disciplines adds a new class of document to Outlook – Goals.

51. 51 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 51 Goals are organized by categories to form balanced scorecards

52. 52 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 52 Expanding each section of the scorecard shows goal performance

53. 53 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 53 Clicking on any goal shows detailed activity on plan and performance.

54. 54 © 2004-2007 Six Disciplines, LLC All Rights Reserved. 54 Scorecards can be created (cascaded) for each company, business unit, functional area or team within the organization.

55. 55 © 2004-2007 Six Disciplines, LLC All Rights Reserved. Summary Balance Scorecards are a key tool to effectively managing an organization Scorecard brings a balanced view of people, process, customer/growth and financial perspectives. Supports leading indicators (people & process) And lagging indicators (customer/growth and financials) Cascading of scorecards connect higher-level strategy & goals to functional units.

56. 56 Need Help Putting in Place a Balanced Scorecard for your Organization?

57. 57 Cost per person per hour (based on illustration) $0.38 / $0.56 Minutes per person per day to breakeven 4.99 / 7.48 Investment Model

58. 58 SOURCE: Hendricks, K.B. and Singhal, V.R. (1999). What It Takes Is Known Systematic Approaches Grow Assets 135% faster US Research: 600 WW Excellence Programs, 5 years

59. 59 www.StrategyExecutionAdvisors.com

60. Upcoming Webinars

61. 61 1.February 22 rd : Balanced Score Card 2.March 1 st : Strategy Maps 3.March 8 th : Value Stream Maps 4.March 15 th : Succession Planning 5.March 22 nd : Benchmarking Performance 6.March 29 th : Quarterly Review Process For more information and to register, visit: www.StrategyExecutionAdvisors.com/webinars

62. 62

63. Thank You ! Matt Lauth mlauth@sxadvisors.com (419) 348-8046