1. SLAM ER
SLAM
F/A-18C/D
Boeing
Aircraft &
Missile Systems
C-17
Harpoon

2. The Balanced Scorecard Roadmap for Achieving Business Performance Excellence

3. Elements of Strategy Development
Supplier
Partnerships
Competitive & Market Assessment
Customer Satisfaction
Strengths
Weakness
Opportunities
Threats
Core Competencies
Counter Intelligence
Regulations
Competitive Intelligence
Environment
Risk Assessment
R&D
Internal Assessment
Previous Planning Period Performance
Vision & Mission
Performance Measurement
Benchmarks
Stakeholders

4. A Fundamental For Strategy Development
Vision & Mission of the Organization
Four Perspectives
The Purpose of the Organization
The Strategy by Which the Purpose will be Achieved
What the Organization Values
The Standards of Behavior

5. The Andrew Campbell Mission Model
Balanced Business Direction Leads to a Balanced Performance Management System and Strategy Deployment
The Andrew Campbell Mission Model
Strategy that
enables the
purpose to be
realized
Values that
link with the
purpose
PURPOSE
Values resonate
with strategy
STRATEGY
VALUES
STANDARDS
&
BEHAVIORS
Behavior
patterns that
support the
strategy
Behavior patterns
that are value-laden
(i.e. seen to be good
in themselves)

6. Performance Management Alignment is a Key to Performance Excellence
Financial
Lag
Drivers
Lead
Customer
Product/Service & Process
People

7. History of Performance Measurement
1950
1990s
Success measured by size of operation
Accounting was a “bean counter” activity
Profit & Loss Statement
Standards
Statistical Measures
Process Management &
Measurement
EVA
Shareholder Value
Lead indicators
Survey & Soft Measures
MBNQA
The Balanced Scorecard Ties Together
Our Past, Present & Future

8. The Boeing Experience In Search of A Performance Management System
1993
1994
1995
Performance by Process
Earnings
Revenues
RONA
Working Capital
Backlog
Personnel
Cash Flow
Learned about the Balanced Scorecard
Presentations made to various division heads.
Senior leadership ready to embrace balanced scorecard
Initial architecture used MBNQA approach. Result = Effort stalled.
Changed approach based on the Norton-Kaplan Balanced Scorecard.
Disconnected Metrics! Too Many Metrics!

9. Our Business Culture Prior To 1996
Performance Management System Designed Around a
Short-term Control-oriented Financial Framework
Budget Planning
Capital Allocation
Manage & Modify Based
on Budget Performance
Personal Incentives Based
on Budget Management

10. A Corporate Agreement to Pursue A Balanced Scorecard
1996: The Search is Over!
A Corporate Agreement to Pursue A Balanced Scorecard
MBNQA Internal Assessment Special Initiatives

11. How to Implement the Scorecard was Unclear?
Major Changes
Organizational
Operational
Company direction
Vision and Strategy not Clear

12. Balanced Scorecard Development Process
Vision/Mission
Enterprise Business Challenges
Elements of Strategy
Key Business Drivers
Company/Program Goals
Performance Measures
Performance Review Process
A Balanced Scorecard Translates the Mission and Vision into a Systematic Review of Key Actionable Performance Measures

13. An Implementation Idea: Reverse Engineer the Scorecard Implementation
Develop template to document VP/GM goals (250).
Cross-cutting issues identified and linked to Key Business Drivers and Challenges.
Corporate initiatives.
23 goals and metrics identified at the enterprise level.

14. Boeing Aircraft & Missile Systems Balanced Scorecard Metric Hierarchy Approach
BU/RSU (Divisional) Level Measures:
Unique Plus Lower Level Aggregates
A&M Level Measures:
Lower Level(s) Measures:
Unique Plus Lower Level Aggregates

15. 1996 Enterprise Balanced Scorecard
Financial
Business Base
Strategic Capability
Supplier Relations
Workforce Capability
Affordability

16. First Improvement Cycle
Leadership Offsite Meeting
High Level Strategies Discussed
Key Perspectives Which Captured Strategies Determined

17. The Balanced Scorecard “Cockpit”10 20 30 40 50 60 70
Operating
Plan
Customer
Satisfaction
People
In-Plant
Quality
Backlog

18. Customer Satisfaction Scorecard Tree
Life Cycle Costs
Unit Cost
Affordability
Maintenance
Unit Price
Spares
Assy Touch Hrs/Unit
$ Per Flight Hours
ROR
Operating Cost
Depot
Fuel
... etc.
Data Costs (Pubs)
Acknowledging Problems
Customer
Satisfaction
Customer Satisfaction Issues
Responsiveness to Requests
Availability of Personnel
Responsiveness of Personnel
Accuracy & Completeness of Proposals
Contracting Process
Flexibility of Terms & Conditions
Length of Contracting Process
Ease of Negotiations
Innovation Using Leading Edge Technology
Aircraft/Missiles
Other Hardware
On-Time Delivery
Spares
ROR
CDRLs

19. Quality Organization Performance Matrix
(Representative Example)

20. USN/USMC Programs Performance Matrix (Representative Example)

21. Balanced Scorecard Focus Leads To Bottom Line Results
Quantitative:
Record earnings
Improved RONA
Customer ratings improved (no unsatisfactory ratings)
Programs showed reduction in hardware defects
Contracting cycle time reduced
Qualitative:
Employee Satisfaction Improved
Customer Feedback indicates we are getting more responsive to their requests
Senior leaders like the ability to compare similar and dissimilar financial and non financial data in a glance

22. Lessons Learned Need Top Leadership Support Metrics Be Actionable
Metrics Must Link to Business Objectives
Balanced Scorecard Implementation Can Be Reverse Engineered
A Review Process Is Needed
Challenge Your Legacy Metrics
Be Prepared for Set-backs, but Press On!

23. The Last Word
Invention in the 20th Century "Everything that can be invented, has been invented...so close the patent office." (Charles Duell, Commissioner of the U.S. Office of Patents, 1899) The Aeroplane "Heavier-than-air flying machines are impossible." (Lord Kelvin, physicist and President of the British Royal Society, 1895) Automobiles "The Edsel is here to stay." (Henry Ford II, 1957) Computers "I think there is a world market for about five computers." (Thomas J. Watson, Chairman of IBM, 1943) "What the hell is it good for?" (Robert Lloyd, IBM, 1968, speaking on the microprocessor) "There is no reason for any individual to have a computer in their home." (Ken Olsen, President of Digital Equipment, 1977)