1. “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

2. 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….

3. Performance needs to be judged thru mix of both financial & non-financial measures….
As - non-financial measures are drivers of 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

4. Organizations Often Have A Gap Between Strategy and Action
Strategy Is a Step In a Continuum
MISSION
Why we exist
VALUES
What’s important to us
VISION
What we want to be
STRATEGY
Our game plan
(11) Does a strategic focus make sense in a tactical business world?
STRATEGIC OUTCOMES
Satisfied SHAREHOLDERS
Delighted CUSTOMERS
Efficient and Effective PROCESSES
Motivated & Prepared WORKFORCE

5. The Balanced Scorecard Is A Bridge To Close That Gap
Strategy Is a Step In a Continuum
MISSION
Why we exist
VALUES
What’s important to us
VISION
What we want to be
STRATEGY
Our game plan
BALANCED SCORECARD
Implementation & Focus
STRATEGIC INITIATIVES
What we need to do
STRATEGIC OUTCOMES
Satisfied SHAREHOLDERS
Delighted CUSTOMERS
Efficient and Effective PROCESSES
Motivated & Prepared WORKFORCE
PERSONAL OBJECTIVES
What I need to do
(11) Does a strategic focus make sense in a tactical business world?

7. 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 process perspective

8. Balanced Scorecard History
Measurement and Reporting
Enterprise-wide Strategic Management
Alignment and Communication
1992
1996
2000
Articles in Harvard Business Review:
“The Balanced Scorecard — Measures that Drive Performance” January - February 1992
“Putting the Balanced Scorecard to Work” September - October 1993
“Using the Balanced Scorecard as a Strategic Management System” January - February 1996
1996
2000
Acceptance and Acclaim:
“The Balanced Scorecard” is translated into 18 languages
Selected by Harvard Business Review as one of the “most important management practices of the past 75 years.“

9. Balanced Scorecard Hall of Fame Implemented Strategies and Achieved Breakthrough Results… Fast
Mobil
ATT Canada
Saatchi & Saatchi
Last to first
Cash flow +$1.2b
ROI 6% --> 16%
3 years
3 years
+ $2b
+ $7b
2-5 years
Cigna
Brown & Root
2-5 years
3 years
+ $3b
#1 in growth & profitability
City of Charlotte
Duke Children’s
3 years
3 years
Customer Satisfaction = 70%
Public Official Award
Customer Satisfaction #1
Cost/Case %
Wells Fargo
Southern Garden
3-5 years
3 years
# Customers 450%
Best Online Bank
Least Cost Producer
2 years
UPS
Chemical Bank
3 years
Hilton Hotels
2 years
99% Merged Target Asset Retention
Revenues 9%
Net Income 33%
Customer Satisfaction
Market Revenue Index

10. What is measured gets noticed
What is noticed gets acted on
What is acted on gets improved
Today …
~ 70% of Fortune 1,000 companies utilize a Balanced Scorecard to help manage performance—
because…..

11. Perspectives Encompass all Respective Functional Domains

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

14. 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

15. 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 % yr % yr %
Ground crew training
ESOP
Learning
Ground crew
alignment 17

16. The Complete Balanced Scorecard Strategy Map
Improve Shareholder Value
Financial Perspective: the drivers of shareholder value
Productivity Strategy
Shareholder Value
ROCE
Revenue Growth Strategy
Improve Cost Structure
Increase Asset Utilization
Enhance Customer Value
Create Value from New Products & Services
Cost per Unit
Asset Turnover
Customer Profitability
New Revenue Sources
Market and Account Share
Customer Acquisition
Customer Retention
Customer Satisfaction
Customer Perspective: the differentiating value proposition
Product Leader
Customer Solutions
Customer Value Proposition
Low Total Cost
Product/Service Attributes
Relationship
Image
Price
Quality
Time
Function
Service
Relations
Brand
Internal Perspective: how value is created and sustained
(Processes that Produce and Deliver Products & Services)
(Processes that Enhance Customer Value)
Customer Management Theme
Operations Theme
Innovation Theme
Regulatory and Society Theme
(Processes that Create New Products and Services)
(Processes that Improve the Environment and Communities)
Learning & Growth Perspective: role for intangible assets – people, systems, climate and culture
Human, Information, and Organizational Capital
Strategic Competencies
Strategic Technologies
Climate for Action

17. Mobil NAM&R Strategy Map
Increase ROE to 12%
Financial Perspective
Revenue Growth Strategy
ROCE
Net Margin (vs. industry)
Productivity Strategy
New Sources of Non-Gasoline Revenue
Increase Customer Profitability Through Premium Brands
Become Industry Cost Leader
Maximize Use of Existing Assets
Non-Gasoline Revenue & Margin
Volume vs. Industry
Premium Ratio
Cash Expense (cpg) vs. Industry
Cash Flow
Customer Perspective
“Delight the Consumer”
“Win-Win Dealer Relations”
Share of Targeted Segment
Mystery Shopper Score
Basic
Differentiators
Dealer Profit Growth
Dealer Satisfaction
Clean
Safe
Quality Product
Trusted Brand
Speedy Purchase
Friendly Helpful Employees
Recognize Loyalty
More Consumer Products
Help Develop Business Skills
“Build the Franchise”
“Increase Customer Value”
“Achieve Operational Excellence”
“Be a Good Neighbor”
Create Non-Gasoline Products & Services
Understand Consumer Segments
Improve Hardware Performance
Improve Inventory Management
Improve Environmental, Health and Safety
Internal Perspective
Yield Gap
Unplanned Downtime
Inventory Levels
Run-Out Rate
Best-In-Class Franchise Teams
New Product Acceptance Rate
On-Spec
On-Time
Industry Cost Leader
Environment Incidents
Safety Incidents
Dealer Quality Rating
Activity Cost vs. Competition
A Motivated and Prepared Workforce
Climate for Action
Competencies
Technology
Learning & Growth Perspective
Aligned
Personal Growth
Functional Excellence
Leadership Skills
Integrated View
Process Improvement
Personal BSC
Employee Feedback
Strategic Skill Coverage Ratio
Systems Milestones

18. Capstone's Balanced Scorecard

22. Analyst Report Company Round Analysis
Additional – AFTER-the-FACT Tools for Managing & Assessing Your Performance:
Company Round Analysis
Analyst Report

23. Round Aanalysis
-example

24. Simulation Scoring System