1. BALANCED SCORECARD TEAM A2 Bo Kongthaisereekul Janet Ho Veronica Mwikwabhi Edelen Melo-Ortega Cresna Ponthy James Byrne 2 b. Winning strategies part 1

2. WaveRider’s BSC Deployment Conclusion Fundamental Theory of BSC Advantages and Disadvantages (Mitigating actions) Comparison of other deployment method Assumptions (people & operation way) Wave Rider’s Vision Deployment Plan recommendation (Five years) Conclusion

3. Balanced ScoreCard – BSC (1990) BSC is tool for leader to communicate strategy to employee and external stakeholders the outcome and performance drives by which the organization will achieve its mission & strategy objectives Measure Performance and Set Strategy: Effective organizational performance management Effective implementation strategies (Removing barriers for Financial measurement and Strategy Execution) Niven, P. (2002). Balanced Scorecard Maximizing Performance and Maintaining Results. New York: Jonh Wiley & Sons, Inc. Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5.

4. Learning & growth perspective. As enablers to other 3 perspectives (fundamental vehicle). It helps to close the gap to ensure sustainable performance in the future. 1.Employee skills 2. Employee satisfactions 3. Availability of information 4. Alignment Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5. BSC – LEARNING AND GROWTH PERSPECTIVE

5. Internal business process. Efficient the process via: 1. Product development 2. Production excellence 3. On time delivery 4. After sales services Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5. BSC – INTERNAL BUSINESSS PROCESS PERSPECTIVE

6. 1. Operation excellence 2. Product leadership 3. Customer intimacy (Customer satisfaction, customer loyalty, market share & customer acquisition) Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5. BSC – CUSTOMER PERSPECTIVE

7. Financial measures. Result focus on bottom-line, indicators: 1.Profitability 2. Revenue growth 3. Economic value added. Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5. BSC – FINANCIAL PERSPECTIVE

8. Advantages Strategy alignment with 3 primary stakeholders: Shareholders, Customers and Employees Both financial and non-financial criteria Allows review the past financial situation in an ongoing consistent manner. Engagement of employee voice through learning and growth able to assess whether any strategic action implemented will match desired outcome Acts as an excellent education tool for staff Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5.

9. Disadvantages The concentration on three primary stakeholders has the converse effect of neglecting other stakeholder Requires a long thought process to develop Trade-offs between different measures is ignored even when in direct confliction Should not be taken as full comprehensive delineation of the company Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5.

10. Mitigating the negative effects Primary stakeholder must be clearly recognised Empowerment to the team members (flexible and freedom to achieve strategic priorities) Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5.

11. Hoshin & BSC (Main differences) Comparison of other deployment method Hoshin & BSC (Main differences) Witcher, B.J. and Butterworth, R. (2001), “Hoshin kanri: policy management in Japanese-owned UK subsidiaries”, Journal of Management Studies, Vol. 38 No. 5, pp. 651-74. Yang, T.M. and Su, C. T., (2007), “ Application of hoshin kanri for productivity improvement in a semiconductor manufacturing company.”, Journal of Manufacturing Technology Management, Vol. 18 (6), pp.761-775 Witcher, B., (2002), ”Hoshin kanri: a study of practice in the UK”, Managerial Auditing Journal, Vol. 17(7), pp.390-396 Hoshin focuses on selecting and monitoring the right measure to drive change (an “ends justifying the means” approach) BSC centered primarily on the capability of company’s process for delivering value to customer (means contributing toward end) Flexibility BSC strongly emphasized the goal must to be achieved (does not provide clearly approach of how) Hoshin does with short (annual)/middle (3-5y.) and long-term plan (5-10y.) Change BSC does not cover review and monitoring system (closed-loop) to modify plan (change) Hoshin emphasized PDCA cycle. Hoshin deployment method sometimes neither delayed nor allowed the process(review) Communication Hoshin integrates people together from top-down and bottom-up deployment. Although, it is difficult to achieve the involvement of everyone.

12. Assumptions… The research Market is not yet concluded, but the correct approach seems to be to open the distribution channels to the European market. Better negotiation strategy in terms of sourcing to foster competitive advantages.

13. ViSiON (Direction) (Niven, 2002), The vision s tatement provides a word picture of what the organization intends ultimately to become in next 5,10,or 15 years. By not having appropriate vision statement, organization might has a problem to guide the actions of employees which result lack direction and eventually unable to take benefits from any strategy that put on place. Thus there are several key points in order to create effective vision:

14. ViSiON Key points (Niven, 2002), · Concise (should be simple, powerful and compiling) · Appeals to all stakeholders · Consistent to mission and values · Verifiable · Feasible · Inspirational

15. WaveRider’s Strategic Objectives The VISION Strategy 6 (Key Words) Customers Delightment Safety Innovation (R&D) Continuous Improvement Service FINANCIAL CUSTOMER INTERNAL GROWTH To be the preferred boats provider in our market(s) achieving a large market share by providing: Exceptional value- Safe and Innovative products Customer Service Post-sale A fun, positive and profitable experience for all stakeholders Pal's Sudden Service. (2001 ). Retrieved February 10, 2011, from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf Kaplan, R., & Norton, D. (1993, September-October). Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW, p.5.

16. Wave Rider - BSC Financial IB Process CustomerL & G

17. Learning & Growth Deployment ObjectsMeasuresTargetsInitiatives Y1Y2Y3Y4Y5 Staff traininglength of time for training (hours)150 120 Training Program Employee satisfaction% of satisfied employee60%70%80%90%95%Welfare & Benefits collect by interviews and surveys R & D and Innovation number of patents compared with competitors 23345 Research on new product

18. Internal Business Process Deployment ObjectsMeasuresTargetsInitiatives Y1Y2Y3Y4Y5 Production efficiency of New ProductLead time Staff Training Production Level SeaHorse ↓ 20% 15% 12% Reorganise Production Plan SeaSpray ↓ 60%50%45%35%33% SailAway ↑ 20%30%40%50%55% (% of each product) Reduce stock level of Current Products stock/ amount of total products produced 27%25%20%18%15%Reorganise Production Plan Improve Finance and HR Departments Reorganise Finance and HR Department

19. Customer Deployment ObjectsMeasuresTargetsInitiatives Y1Y2Y3Y4Y5 Quality of new product (Sailaway) DPMO No. of Defects relative to total products produced 5.00%2.00%1.00%0.5%0.1%Six Sigma Customer Delightment % complaints relative to total sales unit 10% 8%5%2%Membership Program Increase No. of Customers % number of new customers relative to total current customer 10%15%20%30%40%Marketing Campaign Competitive pricecompare with competitors8% 5% Benchmark Shipment (Delivery to Customers) Sale Growth10%12% 15%18%Promotion, Discount Increase Market share of New Product % of market share5%10%15%20%30% Find more distribution channels and customer base

20. Financial Deployment ObjectsMeasuresTargets Y1Y2Y3Y4Y5 Profitable growth Gross Margin46.47%48%49%50%51% Return on Sales5.46%6%6.50%8%10% Maximise returnsROCE7.99%8%9%11%14% Manage operating costs Administration costs (admin. cost/GP) 57% 55%53%50% Material costs51%50%49%46%45%

21. Cause & Effect Financial Perspective Gross MarginReturn on Sales Return on Capital Employed Administration CostsMaterial Costs Customer Perspective New product Quality-Sail Away Customers Delightment Increase No. of Customers Competitive priceShipment (Delivery)Increase Market Share Internal Business Process Productivity EfficiencyProduction Level Marketing-Sales (Efficiency) Reduce Stock Levels of Current Products NPI New Product Introduction Improve Finance and HR Departments Learning & Growth Staff training Education Improve Employee Satisfaction R&D (Innovation )

22. CONCLUSIONS BSC provides a linkage between strategy and vision through four perspectives to achieve organization shared objectives. Yet, it has potential issues in terms of in review mechanism during deployment phase. Therefore, it requires adjustment to maximize its benefits.

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