Balanced Score Card in Personal Life

Vancouver Community College ID 3102
Provincial Instructor Diploma Program Instructional Techniques

PIDP ID 3102

Balanced Score Card

Marko Wolf-Pany, P.Eng.
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Vancouver Community College
Provincial Instructor Diploma Program
Tuesday, October 28, 2008

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VCC – PIDP – ID 3102
0
Process Improvement Consultant – Project Management Consultant

Marko Wolf Pany, P.Eng.

 Professional Engineer (P.Eng.), Ontario
 B.Eng. Honours, Electrical Engineering, Carleton University
 Software Engineering Institute (SEI) Software Capability Evaluation (SCE)
Evaluator
 CMMI / ITT Senior Manager, TELUS / Accenture / Vancouver
 Program / Project / Process Improvement Management Consultant
 Director, Software Engineering Management
 Program Manager -SEI CMM based Software Process Improvement (SPI) Programs
 Member of the company’s Baldrige National Quality Program Steering Council
 Director, Systems Engineering -Technical Authority responsible for all
Information Technology (IT) Projects in Latin America
 Project Manager / Technical Manager, Land (Army) Software Engineering
Centre (LSEC), Department of National Defence (DND)
 Member of the Software Engineering Process Group (SEPG)

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Process Improvement Consultant – Project Management Consultant 1
Tuesday, September 28, 2008

Process Improvement Consultant
Project Management Consultant Tuesday, October 28, 2008 - 1


History of the Balanced Scorecard

 In 1992, an article by Robert Kaplan and David Norton entitled quot;The Balanced
Scorecard - Measures that Drive Performancequot; in the Harvard Business Review
caused a lot of attention for their method, and led to their business bestseller,
quot;The Balanced Scorecard: Translating Strategy into Actionquot;, published in 1996.

 The Balanced Scorecard (BSC) is a performance management tool which
began as a concept for measuring whether the smaller-scale operational
smaller-
activities of a company are aligned with its larger-scale objectives in terms of
larger-
vision and strategy.

 By focusing not only on financial outcomes but also on the operational,
marketing and developmental inputs to these, the Balanced Scorecard helps
provide a more comprehensive view of a business, which in turn helps
organizations act in their best long-term interests.
long-

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History of the Balanced Scorecard

 The financial performance of an organization is essential for its success.
 Even non-profit organizations must deal in a sensible way with funds they
non-
receive.
 However, a pure financial approach for managing organizations suffers from two
drawbacks:
 It is historical.
 Whilst it tells us what has happened to the organization, it may not tell us what is currently happening.
 Nor it is a good indicator of future performance.
 It is too low.
 It is common for the current market value of an organization to exceed the market value of its assets.
 Tobin's-q measures the ratio of the value of a company's assets to its market value.
Tobin's-
 The excess value is resulting from intangible assets.
 This kind of value is not measured by normal financial reporting.

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The 4 perspectives of the Balanced Scorecard

 The Balanced Scorecard method of Kaplan and Norton is a strategic approach,
and performance management system, that enables organizations to translate a
company's vision and strategy into implementation, working from 4
perspectives:
 Financial perspective.
 Customer perspective.
 Business process perspective.
 Learning and growth perspective.
 This allows the monitoring of present performance, but the method also tries to
capture information about how well the organization is positioned to perform in
the future.

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Benefits of the Balanced Scorecard

 Kaplan and Norton cite the following benefits of the usage of the Balanced
Scorecard:
 Focusing the whole organization on the few key things needed to create breakthrough
performance.
 Helps to integrate various corporate programs. Such as: quality, re-engineering, and
re-
customer service initiatives.
 Breaking down strategic measures towards lower levels, so that unit managers,
operators, and employees can see what's required at their level to achieve excellent
overall performance.

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Kaplan and Norton's Balanced Scorecard

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6

1. The Financial Perspective

 The financial perspective examines if the company’s implementation and
execution of its strategy are contributing to the bottom-line improvement of the
bottom-
company.

 Key Financial Performance Indicators
 Cash flow
 ROI
 Financial Result
 Return on capital employed
 Return on equity

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2. The customer perspective

 The customer perspective defines the value proposition that the organization will
apply in order to satisfy customers and thus generate more sales to the most
desired (i.e. the most profitable) customer groups.

 Key Customer Performance Indicators
 Delivery Performance to Customer - by Date
 Quality Performance to Customer - by Quality
 Customer satisfaction rate
 Customer Loyalty
 Customer retention

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3. The Business Process perspective

 The internal process perspective is concerned with the processes that create
and deliver the customer value proposition.

 Key Internal Business Processes Performance Indicators
 Number of Activities
 Opportunity Success Rate
 Accident Ratios
 Overall Equipment Effectiveness

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4. Learning and Growth perspective

 The Innovation & Learning Perspective is concerned with the jobs (human
capital), the systems (information capital), and the climate (organization capital)
of the enterprise.

 Key Learning & Growth Performance Indicators
 Investment Rate
 Illness rate
 Internal Promotions %
 Employee Turnover
 Gender Ratios

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Balanced Score Card

$ QUALITY
(Profits, (Products &
RoI, etc.) Services)
CUSTOMER EMPLOYEE
SATISFACTION SATISFACTION

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Personal Balanced Score Card

$
FINANCIAL QUALITY
BALANCE OF LIFE
FAMILY & PERSONAL
FRIENDS SATISFACTION
SATISFACTION

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Is Your Life Balanced ?

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13


Balanced Score Card in Personal Life

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