We have provided Training and Consultancy services for Balanced Score Card to Tata Projects Ltd, NTPC Simhadri, Unchahar, Auraiya, Vindhyachal, Gulf Oil Corporation, Ispat Industries etc.

We will be happy to provide following Training and Consultancy Services for assisting you in your “Excellence Journey”

• Awareness Programme on DQA/EFQM/DHEA Model
• Gap Analysis workshop for preparing action plan for model implementation
• Facilitation for Application Document Preparation. The process is as below:

1)   Awareness Training to Senior Management and potential Team Members

2)   Formation of Core Team and Formation of Criteria wise Teams

3)   Gap Analysis and Document Writing Workshop for Core Team and Criteria Team Members

4)   Interactions (at least 2 times) with each criteria Team for Guiding to prepare Draft Document

5)   Preparation of Final Document along with Core Team and Document Submission

6)   Site Visit Preparation Trainings/presentations to all executives

7)   Mock Audits before site visit.

• Action Plan Preparation workshop on OFIs to shift the Band
• Designing and conducting Perception Surveys
  • Customer Perception Survey
  • Employees Satisfaction Survey
  • Society Perception Survey
  • Vendor Perception Survey

Strategy Maps are Excellent Tool for Balancing the Strategy / Validation of Existing Strategy . Strategy Maps prepared as per Balanced Sore Card Concept helps in validating your strategies by putting them into the frame work. It asks you to balance your strategies in the BSC perspectives and establish the Cause and Effect relation. This improves the quality of Strategy and helps in better communication and implementation.

Strategy Management:

The word strategy comes from the Greek Strategos, which refers to military general; combines stratos (the army) and ago (to lead).

Strategy is the Means / Game Plan to achieve the Vision and Goals. It is an hypothesis that by adopting this strategy the organization will achieve it’s long-term objectives .

Strategy Management  can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objective. It consists of three stages:

1. Strategy Formulation
2. Strategy Implementation, and
3. Strategy evaluation

In generic Strategy Management approach Strategy is formulated after detailed Environment Scanning (both internal and external environment- Situational Analysis and  SWOT Analysis). In this methodology the strategy formulated is not balanced ie. Focused on Financial Strategies and Technology related Strategies and most of the times the Customer related and Learning & Growth strategies to support Financial and Technology strategies are missing. Mostly the Strategies are imbalanced as below:

• Oil companies Strategies tend to be dominated by the technical and cost focus of the refineries at the expense of marketing
• Consumer goods companies Strategies are dominated by a marketing and sales focus at the expense of technology and innovation
• High tech companies have a strong engineering and technology culture with manufacturing often being a stepchild

I had conducted more than 25 workshops on BSC in which more than 100 teams formulated strategy by doing SWOT analysis and taking into account the different Stakeholders requirements etc, but every team had to identify few more strategies and drop few strategies to Balance it and Prepare Strategy Map

Strategy Maps:

Strategy Map is a pictorial presentation of strategy showing logical sequence and cause and effect relation among the strategies. It provides the visual framework for integrating the organization’s strategies in the four perspectives of a Balanced Scorecard. It provides a single-page view of the strategy. A properly constructed strategy map tells the game plan / strategy story of the organization.

What ever Methodology Company adopts to develop Strategy, but it has to validate it by putting them into BSC perspectives and establish Cause and Effect relation among these Strategies. It should identify and make explicit  the Cause-and-Effect relationships between outcome measures and the performance drivers of those outcomes.

Strategy without Execution (implementation) is like Execution (capital punishment/ the death sentence) for any industry.

Unbalanced Strategy is like Constructing a multi storied building/ monument without proper foundation and alignment.

Whatever Strategy the company adopts it has to be Balanced  Strategy (All important enablers and outcomes/results are addressed) and it has to be Executed across the Organisation (Many company’s fail to get best of their strategies due to failure in execution). The best tool for assessing that the Strategy is Balanced or not is the preparation of Strategy Map establishing the Cause and Effect relation among the outcomes and enablers. The method for Strategy Execution is to “Translate Strategy into Operational terms” and aligning all the “Processes and People” to the Strategy which can be achieved by “Balanced Score Card Concept”.

This paper is addressing the process for preparing Strategy Maps, Translating Strategy Maps into Balanced Score Card of CEO and then aligning Functions/ Departments with Corporate Strategy.

Introduction:

Strategy Maps are Excellent Tool for Balancing the Strategy / Validation of Existing Strategy . Strategy Maps prepared as per Balanced Sore Card Concept helps in validating your strategies by putting them into the frame work. It asks you to balance your strategies in the BSC perspectives and establish the Cause and Effect relation.

Balanced Score Card is the Excellent Tool for Strategy Deployment through Alignment of Processes and People.

Strategy Maps:

Strategy Map is a pictorial presentation of strategy showing logical sequence with cause and effect relation among the strategies. It provides the visual framework for integrating the organization’s strategies in the four perspectives of a Balanced Scorecard. It provides a single-page view of the strategy. A properly constructed strategy map tells the game plan / strategy story of the organization.

In generic Strategy Management approach Strategy is formulated after detailed Environment Scanning (both internal and external environment- Situational Analysis and  SWOT Analysis). In this methodology the strategy formulated is not balanced ie. Focused on Financial Strategies and Technology related Strategies and most of the times the Customer related and Learning & Growth strategies to support Financial and Technology strategies are missing. Mostly the Strategies are imbalanced as below:

• Oil companies Strategies tend to be dominated by the technical and cost focus of the refineries at the expense of marketing
• Consumer goods companies Strategies are dominated by a marketing and sales focus at the expense of technology and innovation
• High tech companies have a strong engineering and technology culture with manufacturing often being a stepchild

Whatever Methodology Company adopts to develop Strategy, but it has to validate it by putting them into BSC perspectives and establish Cause and Effect relation among these Strategies. In this process company has to identify new strategies (The author has conducted more than 25 workshops on BSC in which more than 100 teams formulated strategy by doing SWOT analysis and taking into account the different Stakeholders requirements etc, but every team had to identify few more strategies and drop few strategies to Balance it and Prepare Strategy Map)

A Sample Strategy Map:

Balanced Score Card

The Strategies are mostly stated in the words/statements and the meaning/ intent of the strategy are not translated into operational language. Different Executives/ Employees interpret it in their own way, which may lead to miss alignment. Hence the Strategy has to be translated into operational language as Strategic Measures/ Key Performance Measures.

These SMs/KPMs should become the parameters in CEOs BSC. For each SM/KPM the organisation has to identify the Targets, Comparisons/Benchmark and the process owner.To achieve the targets the organisation has to identify the initiatives.

A Sample Partial Balanced Score Card to show how Strategy Translated into Operational Terms:

Aligning Processes  and People:

For the successful implementation of Strategy, every Function /Department has to align their Strategies/ Processes in line with corporate BSC.

A critical analysis of existing processes/sub-processes, their desired/expected output and Performance Indicators/Measures has to be conducted. Then analyse these measures to asses impact/ linkage to SMs/KPMs in CEOs BSC. By selecting the measures that have high impact on SMs/KPMs of CEOs BSC the Functional/Departmental BSC will be prepared. Again the Functions/Dept.s have to check for the gaps in their BSC and identify new Processes/KPMs in their Function/Dept. and prepare final Functional/ Deptl. BSC.

Once the Departmental BSCs’ are prepared the Individual Score Cards (ISCs) of executives/officers in each department are to be prepared in line with individuals responsibilities/activities.

Review

The daily, monthly and Quarterly review systems are to be integrated with BSCs/ISCs. Organisations can use BSC Softwares deveoped in line with BSC methodology.

A Sample of Partial Functional/ Deptl. BSC.


References:

Translating Strategy into action “The Balanced Scorecard”  and Strategy Maps books by Robert S. Kaplan and David P.Norton.

Authors experiences in TISCO, Tata Projects, NTPC and Gulf Oil Corporation.

About Author:

A.Ajaya Shankar Gupta

B.E (Mining) from Osmania University passed out in1981, in First Division with Distinction.

MBA (Technology Management) from Osmania University during 2005-2007.

Presently Research Scholar (part time) in SMS,HCU under the guidance of Dr. V Sita

Balanced Score Card is the Excellent Tool for Strategy Deployment through Alignment of Processes and People. Harvard Business School Professor, Robert Kaplan and Management Consultant, David Norton conceived the concept of Balanced Score Card (BSC) in 1991. Harvard Business Review quoted that “The Balanced Score Card is one of the most important management practices of the past 75 years”.

It was revealed through different surveys that the companies having Excellent Strategy failed to get benefits of their strategies,due to failue in deployment. For effective deployment of Strategy, it has to be Translated into Operational Language and clearly understood by the every one in the organisation.

BSC Concept also helps in validating your strategies by putting them into frame work of Strategy Maps. It asks you to balance your strategies in the BSC perspectives and establish the Cause and Effect relation. This becomes a power full tool to put the Strategy in one page, pictorially.

BSC Concept:

The Balanced Score Card is a multidimensional framework that gives top managers a fast but comprehensive view of the business. The BSC allows CEO’s to look at the business from four important perspectives:

1. Financial Perspective- To satisfy shareholders, what financial objectives must we accomplish.?

2. Customer Perspective-To achieve Financial objectives, what customer needs must we serve? General mission statement on customer service to be translated into specific measures that reflect the factors that really matter to customers, like lead time measures, quality measures, performance and service measures etc.

3. Internal Process Perspective- To satisfy shareholders and customers in which internal processes must we excel? The internal measures for BSC should stem from business processes that have the greatest impact on customer satisfaction like process capability, cycle time, quality, productivity, cost, etc.

4. Learning and Growth Perspective- To achieve our goals, how must our organisation learn and innovate? Intense global competition  requires that companies make continual improvements to their existing products, processes and have the ability to introduce entirely new products with expanded capabilities.

Though the concept initially was talking about 4 perspectives stated above, the organisations started having 5^th / 6^th perspective depending on their focus/strategy. Some companies have taken Safety, Corporate Social Responsibilty etc. as fifth perspective.

Implementation:

Step 1: Training and getting executive commitment:

For the successful implementation of any Concept the minimum requirement is the Clear Understanding of the Concept and Top Management Commitment & Drive.  If there is no proper understanding of the concept, it is implemented in wrong way and also it sends wrong signals.

Many companies by modifying their PMS to cover Financial and Non Financial Measures claim that they have implemented BSC. People should understand that BSC is much above PMS and PMS is by product of BSC implementation or you can say BSC Methodology can be used to develop PMS.

A Core Group consisting of Senior Executives from all Departments/ Functions to be formed with MD as Chairman and Strategy Officer/ TQM Head as Project Manager(full time initially for 1 year).This Team has to prepare the detailed plan.

Step 2: Strategy Map Finalisation

There is fixed structure to present Financial information/ Balance Sheet, but there is no such structure to present Strategy. This concept has provided a structure to present the strategy in one page as a Strategy Map.

What ever Methodology Company adopts to develop Strategy, but it has to validate it by putting them into BSC perspectives and establish Cause and Effect relation among these Strategies. In this process company has to identify new strategies (The author has conducted more than 25 workshops on BSC in which more than 100 teams formulated strategy by doing SWOT analysis and taking into account the different Stakeholders requirements etc, but every team had to identify few more strategies and drop few strategies to Balance it and Prepare Strategy Map)

A Sample Strategy Map:

Step 3: MDs Balanced Score Card Preparation

The Strategies are mostly stated in the words/statements and the meaning/ intent of the strategy are not translated into operational language. Different Executives/ Employees interpret it in their own way, which may lead to miss alignment. Hence the Strategy has to be translated into operational language as Strategic Measures/ Key Performance Measures.

These SMs/KPMs should become the parameters in CEOs BSC. For each SM/KPM the organisation has to identify the Targets, Comparisons/Benchmark and the process owner.

To achieve the targets the organisation has to identify the initiatives.

Step 4: SBU and Deptl. BSC preparation

For the successful implementation of Strategy, every SBU /Department has to align their Strategies/ Processes in line with corporate BSC.

This is a very critical and time consuming activity in whole BSC implementation process. The author suggests a critical analysis of existing processes/sub-processes, their desired/expected output and to identify the potential performance measures. Then analyse these measures to asses impact/ linkage to SMs/KPMs in CEOs BSC. By selecting the measures that have high impact on SMs/KPMs of CEOs BSC the SBUs/Departments draft BSC will be prepared. Again the SBUs/Dept.s have to check for the gaps in their BSC and identify new processes/KPMs in their SBU/Dept. and prepare final SBU / Deptl. BSC.

A Sample BSC of a  HR Department in Mines:

Step 5: Individual Score Cards preparation

Once the Departmental BSCs’ are prepared the Individual Score Cards (ISCs) of executives/officers in each department are to be prepared in line with individuals responsibilities/activities.

Step 6: Gap Analysis and Stretching Targets

The targets in BSCs/Individual Score Cards are to be fixed in a logical/ systematic manner. Many times it is a GOLY process (Growth Over Last Year – Production Target at 5% higher than last year/ Cost Target  2 % reduction over last year etc.). The author suggests for GAP Analysis process to stretch the targets. In this process one has to analyse different gaps like Gap Over Standard, Gap Over Internal Best Performance, Gap over Benchmark, Gap over Customer requirement etc and stretch the target around these gaps.

Step 7: Review Process

The effectiveness/ real benefit of BSC is achieved through efficient review process. The review process helps in fine tuning the SMs/KPMs and initiating corrective actions/ new initiatives. The author rates the BSCs/ISCs quality at 40% to 50% in first go and the quality will improve to 60% after 3/ 4 reviews and finally to 80% at the end of the annual review.

The daily, monthly and Quarterly review systems are to be integrated with BSCs/ISCs. Organisations can use BSC Softwares deveoped in line with BSC methodology.

References:

Translating Strategy into action “The Balanced Scorecard” by Robert S. Kaplan and David P.Norton.

Authors experiences in TISCO, Tata Projects, NTPC and Gulf Oil Corporation.

About Author:

A.Ajaya Shankar Gupta

B.E (Mining) from Osmania University passed out in1981, in First Division with Distinction.

MBA-Technolgy Management from Osmania University 2005-07

FIRST CLASS MANAGERS’ CERTIFICATE OF COMPETENCY (REST.) DGMS, Lead Auditor ISO9000:2000

Lead Auditor OHSAS 18001

Assessor for JRDQV award 1999 (Tata Group’s Award based on Malcom Baldrige National Quality Award of USA.)

Assesor for CII-EXIM AWARD (EFQM AWARD MODEL)

Best Quality co-ordinator for the year 1999-2000 in Tata Steel.

Worked in Tata Steel for 19 Years.

Since last 6  Years:

Consultant in the areas of TQM, Implementing Business Excellence Models( Tata Business Excellence Model, CII EXIM Award Model),Balanced Score Card Concept,ISO9001, OHSAS18001 etc.

Extended Training and ConsultancyServices  for CII EXIM AWARD Business Excellence Model to L&T AP Cement Works, NTPC Simhadri,TECUMSEH INDIA, NTPC Kahalgaon, NTPC Korba, Tata Business Excellence Model consultancy to Tata Projects Ltd., IQRS for ITCLtd.-ILTD Anaparthy and for Dubai Holding Excellence Award to Sama Dubai. Assessor Team Member for “People Management Award” of JK Group.

Provided Balanced Score Card consultancy to  Tata Projects, NTPC-Simhadri , NTPC-Vindhyachal, NTPC- Unchahar, NTPC- Auraiya, GULF Oil Corporation. Trained more than 700 executives on Balanced Score Card at Power Management Institute of Delhi, FORE School of Management Delhi ,VST Hyderabad, NTPC Simhadri, Rihand, Talcher, Kahalgaon, Auraiya, Vindhyachal and GULF Oil Corporation Hyderabad, Rourkela etc.. Also  Open programmes at  New Delhi, Hyderabad, Pune, Bangalore , Hyderabad and Visakapatnam, Prepared more than 350 Score Cards.

Mr Gupta can be contacted at  ajaygupta@ainapur.com or ajay2521960@rediffmail.com.